(Please tolerate the long post. Some ideas are not reducible to pithy wit.) (1000 words) (important piece)
If a statement in economics cannot be reduced to a sequence of subjectively testable rational operations, then it cannot be true – it is not existentially possible. If a statement in economics can be reduce to a sequence of subjectively testable rational operations, then whether it is true or not is still open to question.
The philosophical problem (epistemic truth) of correcting pseudoscience (of which mathiness is a subset) in the field of economics is not something that is going to easily be solved by economists, who tend to be good at neither advanced mathematics, nor the ethics of science, nor at the principle problem of truth.
And this is a serious problem. Because, of all the disciplines save psychology, economics is the **most subject** to pseudoscience: the failure to eliminate imagination, bias, error and deceit. And we have the greatest incentive to insert imagination, error, bias, and deceit.
And among all the scientific disciplines, the social sciences have been the most subject to pseudoscience other than perhaps philosophy itself (which in truth is objectively a social science).
We have not yet developed the warranty that the hard sciences have developed, or that psychologists have developed. And this is in no small part because in economics, the warranty that we must give is much broader, and places a much higher burden on authors, because the scope of our statements is much broader in influence than that of our peers in other fields.
Due Diligence Necessary For the Warranty of Truthfulness:
1) Have we achieved identity? Is it categorically consistent?
2) Is it internally consistent? Is it logical? Can we construct a proof(test) of internal consistency?
3) Is it externally correspondent, and sufficiently parsimonious? Can we construct a proof (test) of external correspondence.
4) Is it existentially possible? Is it operationally articulated? Can we construct a proof (test) of existential possibility?
5) Is it fully accounted? Do we account for all costs to all capital in all temporal and inter-temporal dimensions? (Have we avoided selection bias?) Can we construct a proof (test) of full accounting?
6) Is it morally constrained? Does it violate the incentive to cooperate? (Meaning, are all operations productive, fully informed, warrantied, voluntary transfers, free of negative externality of the same criterion?)
If you cannot answer these questions or do not understand them you cannot know if you speak the truth, or if you are polluting the commons with fantasy, bias, error, or deception.
Why is it that the informational commons, and by consequence the political and normative commons, are not – in an age of information – as subject to warranty and liability as pollution (“Abusus”) to physical commons, life, body, and private property?
Truthfulness – testimony that has been subject to due diligence – is a non trivial cost. And economists are too happy (as it appears all social scientists have been) to produce defective products for personal gains, without the warranty that all other products have been subject to.
Why is it that free speech is not limited to free truthful speech? After all, the cost of producing truthful scientific testimony under due diligence and warranty is much higher than the cost of producing untruthful pseudoscientific testimony without due diligence or warranty. Doesn’t mere free speech without warranty of due diligence of truthfulness construct an impossibility under which the production of high cost truth and the production of low cost fantasy, bias, error and deceit must eventually win?
There is a great difference between the terms “empirical” (observable and measurable) and “scientific” of which empirical criticism is but a minor subset of the criterion necessary for the production of warranty of due diligence against fantasy,bias, error, and deceit.
We have had a century of economists running with intellectual scissors, causing inter-temporal externalities of profound consequence. And the Cosmopolitan (freshwater) rationalist’s justification of priors is only more visible than the mainstream Anglo empirical (Saltwater), justification of priors under the pseudoscience of Rawlsian justificationism – itself a fascinating example of the logically impossible, yet pervasively persuasive.
So just as all enlightenment adaptations were plagued with errors – anglo, french, german and jewish – both freshwater and saltwater economics are plagued with pseudoscience. The freshwater try to justify objective morality, by argumentative construction (pseudoscience), and the saltwater try to justify immorality by intentionally failing to account for profound normative, institutional, civilizational, and genetic consequences (pseudoscience).
So it’s one thing for all of us to point the finger of the accusation of pseudoscience one place or another. But it is quite another to realize that the minute you draw the lens of truth upon either freshwater or saltwater economics, you will discover that both are pseudosciences that merely confirm ideological priors.
This is probably the most important remaining problem in the philosophy of science.
I set out to debunk the pseudoscience of libertarianism (cosmopolitan libertarianism, not anglo libertarianism) and to refute the postmoderns as masters of pseudoscience. And I did. But I did not set out to reform economics. And in truth, I have less interest in reforming economics and social science than I do in reforming law and politics – the sciences will merely follow incentives.
But Paul Romer lit the kindling, and perhaps this is the time to solve the remaining problem of science. If we do it will be the most important reformation of thought since the enlightenment. Because our errors – our priors – are all errors of the enlightenment. And that is because the enlightenment was incomplete.
We can complete it.
But only if the utility of truth is more valuable than the utility of pseudoscience. And I am suspicious of that assumption.
The Propertarian Institute