The Misconceived Project of Social Science

  1. SocialScienceIntroduction and Motivation

The deeply and fundamentally flawed nature of modern economic theory arises from two problems. The root cause is a fundamental misconception about the nature of methodology. The secondary cause is major mistakes in the application of this wrong methodology. The second flaw can be fixed by replacing the axioms and the methods of analysis while working within the same wrong methodological framework. Heterodox economists have been content to work in this way. This does create useful alternatives, since even a fundamentally flawed methodological framework can lead to useful truths if applied skillfully. However, failure to understand and remedy the root cause leads to serious weaknesses in the alternatives offered, which is one of the reasons why heterodoxy has been unable to create a successful alternative paradigm.

In a series of posts, I would like to explain the fundamental methodological flaw, so as to clear the path to building a genuine alternative to modern economic theory. The first step is to understand why the entire project of “Social Science” is misconceived. The term Social Science embodies the idea that we can fruitfully apply scientific methodology to the study of human beings and society. This is a fundamental methodological mistake. I have made this point in several papers, but unfortunately, they are all quite complex, reflecting my own rather long and tortuous intellectual journey in arriving at this insight. Now I think I can provide a fairly simple and straightforward explanation, in a sequence of steps. The first step is to understand the nature of science and scientific methodology.

  1. What is Scientific Methodology?

The standard current understanding of scientific methodology is based on positivist ideas, and is deeply mistaken. Even after the collapse of positivism, this understanding has not been revised. The best route to a correct understanding is to look at the historical origins of the scientific method. The first science to develop among the Greeks was Euclidean geometry, with its axiomatic method. It was natural that when the Greeks turned to study of nature, they would attempt to apply this same successful methodology to develop the natural sciences. This was done, but proved to be highly unsuccessful. Let us understand how the axiomatic method would work in the context of natural sciences.

We would start with axioms which were dead certain, and then use logical deduction to build on these solid foundations. Unfortunately, no dead certainties of an axiomatic type can be found for the natural sciences. Many such foundations were proposed, and logic was used to build superstructures upon them, but all such approaches proved to be wrong. Nature is amazingly complex, and our intuitions frequently lead us astray. Just think of all the quantum phenomena for a simple illustration. That the Earth is the center of the universe was patently obvious to all, and used as a central axiom.  Aristotle used logic to conclude that heavy stones would fall faster than light ones. Two different schools of thought used logic to prove the opposite contentions about vision. One set of axioms led to the conclusion that light emanating from the eyes hits objects, while the other set of axioms led to reverse conclusion that light emanating from the object hits our eyes. The conflict could not be resolved on logical grounds for a thousand years.

Why did Aristotle not pick up two stones and drop them from a steep cliff to assess the validity of his theory? It is very important to understand the answer to this question, since Aristotle was one of the smartest men on the planet. His writings are still studied at universities after thousands of years. To answer this question, consider a parallel question. All of us have studies the Pythagorean theorem. Did anyone draw a triangle to assess whether or not it is true? Once something is logically proven, empirical confirmation is not required. Indeed, if we draw a triangle, and it violates the Pythagorean theorem, we would correctly attribute it to mistakes in measurement, drawing or other unknown causes. We would not start to doubt the Pythagorean theorem, even if we could not figure out why our drawn triangle fails to satisfy the theorem. To those who did not understand the proof which convinced us, our acts would appear like an act of faith – a firm belief which cannot be dis-lodged even by witnessing contradictory empirical evidence.  The axiomatic-deductive methodology of Euclidean Geometry leads to certainty. Empirical observations cannot either confirm or disconfirm logical truths.

In an era where science dominates the scene, it is difficult for us to understand the pre-scientific mindset. It seems obvious and natural that we should use experiments and observation to settle scientific questions. So it is important to begin by understanding that the original Greek idea that appropriate scientific methodology should be axiomatic/deductive like geometry, is based on a perfectly sound and coherent logic, which is internally consistent, and provides a reasonable framework for viewing the world we live in. It just didn’t happen to work out, but this does not mean that their logic was wrong.  [Just as the collapse of Russia does not mean that Marxist theories are wrong].

The deep and fundamental problems with the idea of using observations and experiments to build science are almost obvious, and retain their validity today. Suppose that I deduce a scientific law after making a sequence of observations all of which fall into the same pattern – how can I be sure that this law will retain its validity tomorrow? The inherent uncertainty of the scientific method is famously illustrated by the Black Swan. Even though all observed swans in Europe are white, black swans were discovered later in Australia. Large numbers of conjectured scientific laws were later proven false by observations. There are no cases on the record of a mathematical law which was shown to be observationally wrong. Even after a century of experience with regression models to find empirical regularities, we routinely obtain wrong results. For example, in the case of export led-growth, we can find published papers which use regression to prove all of the four possible results. Exports cause growth, growth causes exports, there is bidirectional causality, and there is no causal relation between the two.

Just as a discovered empirical pattern need not persist, so a discovered contradiction may not actually contradict. For example, if Aristotle dropped two stones from a mountaintop, and a chance strong wind created differential speeds of falling, or the shape of the stones created different types of air resistance, the observational failure would not reflect on the logical proof. Just as we would not bother to check the calculations of someone who claimed to find a counterexample to Fermats Last Theorem, so empirical reports of a failure of a physical law which could be proven by an axiomatic deductive methodology would not be relevant evidence.

CONCLUSION: The axiomatic-deductive method leads to certainties. The observational-experimental methods of science do not. This is why the Greeks preferred the former to the latter, and correctly did not trust the latter. This is why the development of the scientific method was delayed for a thousand years. The success of the method is rather surprising given that certainty is not achieved at any point in the chain of reasoning. We are always working with guesses about what might be the causes of observed patterns, and even the observed patterns are guesses.

Subsequent steps in understanding why scientific methodology cannot be used to study humans and societies will be posted later.

PS (added in response to a comment): The first step taken here is to describe the pre-scientific methodology of the Greeks, and explain its virtues, and why these virtues created an obstacle to the emergence of the scientific method. What the scientific method is, and how it emerged, will be described in the next post.

PPS: For posts on a diverse range of topics, see my LinkedIn Author Page. Index to writings and talks: AZProjects

  1. David Chester said:

    Asad–unfortunately your understanding of what science comprises is flawed! Empirical evidence followed by hypothesis does not lead to any cast iron laws of nature. It leads to provisional laws, for which better measurements will inevitably prove the need some revision of the theory. Indeed the empirical evidence is replaced by the design of experiments, which are deliberately made to explore where the previous theory could be wrong! Thus scientific knowledge is not 100% true and never will be. However it is much better than using the empirical result to explain the more-general case.

    In economics we can’t usually manage to do these experiments, but instead we can study past happenings and then develop a non-statistical way for determining our collective behavior that has a semi-mechanical basis. Its time we began to accept that collective human behavior is not arbitrary but follows specific rules. However in order to get this far we need first to have a suitable theory which covers the more basic nature of our social system, and this is what has been lacking. Our models are either too complex to allow us to understand them or too simple so they do not properly represent the functional behavior of the whole shebang. We need to agree on a suitable general model before having to experiment, using it with the simulation of past results.

    • I have not yet explained what is my understanding of scientific methodology. My argument is complex and multi step. The first step taken here is to describe the pre-scientific methodology of the Greeks, and explain its virtues, and why these virtues created an obstacle to the emergence of the scientific method. What the scientific method is, and how it emerged, will be described in the next post.

      • David Chester said:

        Like the cat who ate cheese, I await the next stage with ‘baited breath.

  2. Ernesto Vaihinger said:

    Me gusta la idea. La economía sólo ofrece generalizaciones simbólicas (T. Kuhn) que fragmentan el todo. El problema es saberlas utilizar articuladas en el marco de un sistema que las pueda integrar en su exacta medida de sus alcances.
    Por adelantado pido disculpas por lo que pueda hacer el traductor automático.

  3. jlegge said:

    Pythagoras’s triangle theorem was in practical use to establish right angles long before Pythagoras and still is today. Every carpenter and builder knows that a 3:4:5 triangle contains a right angle. A more important example was the Pythagoreans’ proof of the existence of irrational numbers, forcing mathematics to become a logically incomplete system. Goedel’s proof of incompleteness should have killed the idea that you can use mathematics to “prove” anything about reality. You can’t even use mathematics to prove everything about mathematics.

  4. John Hermann said:

    “The first science to develop among the Greeks was Euclidean geometry, with its axiomatic method ..” The author is conflating mathematics with science. Mathematics (including euclidean geometry) is a very powerful analytical tool, but it is not a science.

    • The use of the word “science” here is in-appropriate — the main point of this post, and the next, is that science and mathematics have radically different methodologies.

  5. In science and engineering there is the well proven principle that any system with positive feedback will be unstable and will oscillate. Only negative feedback systems, with the proper kind of feedback, are stable. This principle applies to purely mechanical systems, electro-mechanical systems, electronic systems and to natural systems. The population of species is a good example; a very unstable system which goes from increasing diversity to decreasing diversity as it is currently doing. The “bandwidth” of this system is very low, eons being required between peak points of diversity and points of minimal diversity. If one looks at the economic system in the same fashion, which has been observed to be unstable giving us booms and busts, they will find positive feedback which causes the instability.Greenspan once indicated how the Fed imposes negative feedback (he did not use those words) when he noted that the Fed’s job was to “take away the punch bowl when the party started to get rowdy, or words to that effect. Unfortunately, it is too late to do it that way and it is the system which must be changed, not just one element as Greenberg indicated.The positive feedback loop in the economic system is not hard to find but fixing it would cause significant political pain.

    • Agreed. Minsky’s Financial Fragility hypothesis describes the positive feedback loop. Steve Keen has been developing this line of argument.

  6. David Chester said:

    charles3000: The analogy to a physical situation is excellent, when your explanation agrees with the associated maths/physics.

    Positive feed-back results in an “unlimited” exponential (hockey-stick) growth. It does not oscillate, but this kind of instability eventually meets with a catastrophic failure, due to the system having a non-linear feature, when the amount of growth or motion exceeds a certain practical value.

    Negative feed-back gives us the oscillation, and this is often associated with some internal damping, so that the motion tends to a stable average value. However, without any damping this motion continues to oscillate and it is also regarded as being unstable.

    So our economics system is a combination of small negative but big positive feed-backs! In complex mechanical and electrical systems the existence of more than one mode of motion is perfectly acceptable, so its OK in economics too.

    Our macroeconomics system is basically unstable, due to the business cycles never being able to become fully damped, and also the motion is non-linear with a catastrophic bust at one point in the 18 year cycle, that we observe. To introduce the necessary damping to our system we need a measure of when the system is trending towards positive feed-back instability. That measure is in the amount of speculation in land values and the growth of bank loans used for their investment. The way to damp out this motion is to apply a tax on the land values, which autonomously controls them (in the same way that an autopilot stops a cruising aircraft from diverging in its motion after meeting a gust), and to eliminate the taxation of everything else so that the rest of our system has less constraint.

    • Correct, David. negative feedback without proper damping will cause oscillation and proper damping is tractable. Bandwidth (how fast things happen in eco) and the gain then determine stability. In the frequency domain, if the gain is greater than -1 when there is a 180 degree phase shift then it will be unstable, less than -1 it is stable. There was a hilarious example of the “bandwidth” being misread sometime ago- maybe it was when Clinton won the presidency- the Fed did some loosening of money to spur up the economy before the election to favor Bush but the lag caused the up turn in the economy to occur after Clinton took office! Clinton got credit for it rather than Bush!

  7. swr22 said:

    Reblogged this on Simon Radford and commented:
    An interesting first post on the problem of economics as a “science” and the failure of positivism.

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