August 1, 2015

Appearances and evidence

Comment on Fredrick Welfare on ‘The Keynes-Ramsey-Savage debate on probability’


There are two types of evidence. Let us call them common sense evidence and theory guided evidence. J. S. Mill had no good word for the first type.

“People fancied they saw the sun rise and set, the stars revolve in circles round the pole. We now know that they saw no such thing; what they really saw was a set of appearances, equally reconcileable with the theory they held and with a totally different one. It seems strange that such an instance as this, ... , should not have opened the eyes of the bigots of common sense, and inspired them with a more modest distrust of the competency of mere ignorance to judge the conclusions of cultivated thought.” (Mill, 2006, p. 783)

Accordingly, I do not naively ‘claim that science is not about evidence’ but that economists apply — more often than not — the wrong type of evidence.

“... it is precisely the task of science to supersede crude common-sense notions by critical analysis, and further that it is the unsatisfactory state of the foundations beneath the common-sense surface which is the most serious and crippling deficiency of contemporary economic science, ...” (Hutchison, 1960, p. 18)

The deficiency of economics consists, in other words, in the lack of sound theoretical foundations. This in turn is due to the fact that the interplay of induction and deduction is generally not well understood.

“Since, therefore, it is vain to hope that truth can be arrived at, either in Political Economy or in any other department of the social science, while we look at the facts in the concrete, clothed in all the complexity with which nature has surrounded them, and endeavour to elicit a general law by a process of induction from a comparison of details; there remains no other method than the à priori one, or that of ‘abstract speculation’." (Mill, 1874, V.55)

Keynes’s problem with regard to inductivism/deductivism was that he eventually hit a wall. “In the early thirties he [Keynes] confessed to Roy Harrod that he was ‘returning to an age-long tradition of common sense’.” (Coates, 2007, p. 11)

It has to be emphasized that, compared to the vacuous green cheese assumptionism of the so-called Classicals, Keynes's common sense was a big step forward. However, methodologically Post Keynesians still have some way to go (2011).

At the moment, Post Keynesians are caught in Bacon's common sense trap. “Bacon, the philosopher of science, was, quite consistently, an enemy of the Copernican hypothesis. Don't theorize, he said, but open your eyes and observe without prejudice, and you cannot doubt that the Sun moves and that the Earth is at rest.” (Popper, 1994, p. 84)

Egmont Kakarot-Handtke

Coates, J. (2007). The Claims of Common Sense. Moore, Wittgenstein, Keynes and the Social Sciences. Cambridge, New York, NY, etc.: Cambridge University Press.
Hutchison, T.W. (1960). The Significance and Basic Postulates of Economic Theory. New York, NY: Kelley.
Kakarot-Handtke, E. (2011). Why Post Keynesianism is Not Yet a Science. SSRN Working Paper Series, 1966438: 1–20. URL
Mill, J. S. (1874). Essays on Some Unsettled Questions of Political Economy. On the Definition of Political Economy; and on the Method of Investigation Proper To It. Library of Economics and Liberty. URL
Mill, J. S. (2006). A System of Logic Ratiocinative and Inductive. Being a Connected View of the Principles of Evidence and the Methods of Scientific Investigation, volume 8 of Collected Works of John Stuart Mill. Indianapolis, IN: Liberty Fund.
Popper, K. R. (1994). The Myth of the Framework. In Defence of Science and Rationality., chapter Science: Problems, Aims, Responsibilities, pages 82–111. London, New York, NY: Routledge.

Refers to 'Stubbornly in the wrong research program' and 'We simply do not know — so let us move on' and  'How to consistently start off on the wrong foot'