From Ikonoclast The essential problem is that heterodox economics needs to develop an agreed ontology and agreed modeling methods, including broad agreements on the likely limits to modeling. Peter Radford has pointed out some of the ways (and reasons why) the economy cannot be modeled accurately in key respects. Orthodox economics has an agreed framework. Orthodox economists mostly agree on their framework and they accept their implied economic ontology, without question or discussion for the most part. Of course, the problem is that their framework lacks an empirically supportable ontology and thus is itself entirely un-empirical. Orthodox economists can’t see it. Every scientist and philosopher of the sciences and social sciences can see it. But while political power supports false
Editor considers the following as important: Uncategorized
This could be interesting, too:
Dan Crawford writes Weekly Indicators for June 7 – 11 at Seeking Alpha
Lars Pålsson Syll writes On the limits of ‘mediation analysis’ and ‘statistical causality’
The essential problem is that heterodox economics needs to develop an agreed ontology and agreed modeling methods, including broad agreements on the likely limits to modeling. Peter Radford has pointed out some of the ways (and reasons why) the economy cannot be modeled accurately in key respects.
Orthodox economics has an agreed framework. Orthodox economists mostly agree on their framework and they accept their implied economic ontology, without question or discussion for the most part. Of course, the problem is that their framework lacks an empirically supportable ontology and thus is itself entirely un-empirical. Orthodox economists can’t see it. Every scientist and philosopher of the sciences and social sciences can see it. But while political power supports false ontologies, they are sociopolitically unassailable until effective rebellion and/or until the structures and systems built on false ontologies collide with real system obstacles and limits.
Economics is not a science and it never will be a science in the hard sciences sense. I think it is better to state this up front and as often as necessary. Economics is a prescriptive discipline. The hard sciences are descriptive disciplines: meaning physics, chemistry, biology and the systems sciences which follow on from them like cosmology and ecology.
Economics, or more properly political economy, is a branch of moral philosophy. Traditionally, this was seen to be the case and value theory or “value philosophy” indicate that this is still the case. Speaking simply, there are two clear categories of values, namely the objective and the subjective. The only values with a claim to objectivity are those measured in the SI base units used by science, which are defined physically and objectively in real dimensions. Here we may take “objective” to mean physically real, dependably measurable and not influenced by human ideas, beliefs or subjective valuations.
We note immediately that economic values are influenced by human ideas, beliefs and subjective valuations in general. Ipso facto, we can reject any notion that an objective discipline can be raised up on that subjective basis. To repeat, conventional economics is a prescriptive discipline. It is based on axioms, not on fundamental laws of nature. It is an entirely axiomatic system. It has a base set of axioms from which one may logically derive its theorems. The “right to private property” is an example of a base axiom of conventional capitalist economics.
This axiom based nature of conventional economics is consistent with all human subjective value systems. This is precisely how all such social value systems operate. They set rules which humans must obey. From that point on, such systems generate “axiomatic” or rather automatic, outcomes IFF they are uniformly or generally obeyed by the actors (the human agents) and IFF behaving according to those rules would not violate any fundamental hard laws of the cosmos (what we would term scientific laws).
A given economic system, as a set of axioms and axiom-guaranteed outcomes (derivable as theorems), is operable socially and objectively provided the human agents are (mostly) obedient to the axioms and provided the fundamental laws of physical reality are not violated, immediately or eventually. This indicates that the axioms of (any) economic system should be subjected to two tests:
(a) Do the axioms break our moral philosophy values either up front or in the axiom-generated sequelae (downstream effects)?
(b) Do the axioms operate the system in such a way as to approach an asymptote where further operations of the axioms break, damage or destabilize fundamental, dependable systems of nature upon which we and the real economy depend (for example the benign Holocene climate)?
If the axioms do not meet either test, it is the axioms which must be abandoned, not our broader ethical values and not the life-sustaining environment which is critical to our survival. Economics must be remolded into a discipline which obeys ethics and the laws of nature. Its invalid circular logic character, whereby it forms its values according to its values, must be abandoned and the discipline re-subjected to (consequentialist) ethical values and to scientific values. Consequentialist ethics, in turn, can be argued to tend to the objective but that is another discussion. Deontologists and consequentialists tend to agree in any case, that we should not wreck the biosphere.
By taking the above ontological and empirical approach certain things become clear. Firstly, basic axioms of conventional economics are just that, namely axioms which are simply base rules created by humans. They are not inviolable laws of nature nor even of deontological law. There are no stone tablets handed down from on high (as opposed to paper based texts handed down by fallible human thinkers) which decree the immutability of the current economic axioms. When an axiom decrees something, it can be, and it should be, tested against empirical reality. In that spirit, how much private property (for example) is enough and how much is too much? Too much is when others don’t have enough AND when the natural environment can’t support it. Empirically, the answer is patently obvious.
With the base ontology correct, and working with the “axiom heap” and “empirical putcomes” heap clearly delineated from each other, we can tweak the axioms surely? Especially if it is a matter of existential survival.