Scientism: Flawed Foundation of Economic Methodology

This is part D of the first lecture on Gratitude, Contentment, and Trust, part of a free online course on A New Approach to Islamic Economics. Register for course via:

In previous parts of this lecture, we discussed the attributes of gratitude, contentment, and trust, as the behavioral bases for an Islamic approach to economics. This approach flies in the face of widely accepted assumptions about the nature of knowledge and science. These assumptions can be encapsulated under the label of “Scientism“, and are listed below:

  • A: Science is the only valid source of knowledge.
  • B: Science should describe empirical reality.
  • C: Study of human societies can be done by the scientific method.
  • D: We understand what the scientific method is, and how to apply it.

We briefly discuss each of these assumptions, and explain why they are wrong.

A: Is science the only valid source of knowledge? Obviously not. Our knowledge of human behavior is based on our personal experiences and empathetic observations of others. Even though our lives revolve around our knowledge generated by our social interactions, each of them is unique, subjective, and not “scientific” knowledge of external reality.

B: Does Science deal only with observable external reality? Obviously not. Scientific hypotheses often concern unobservables like electrons, gravity, dark matter, electromagnetic forces, strings, and many other entities and forces which are beyond the realm of the observable.

C: Can we study human societies using the “scientific method”? Obviously not. Human beings, individually and collectively, are free to choose between good and evil. Whereas particles and matter are subject to deterministic laws, no mathematical equations govern the behavior of individuals and societies. Because of our freedom, social norms influence us to try to act in certain ways, to gain social approval. Also, human beings shape history by our choices. Knowledge revealed by God to the Bedouin 14 centuries ago changed the course of history. A historical and qualitative approach is essential to understanding the process of social change. However, in the “battle of methodologies” of late 19th century Europe, this natural approach was replaced by the quantitative and mathematical approach now dominant – see Method or Madness? for more details of the major methodological blunder.

D: Do we understand what the scientific method is? No. A popular textbook by Chalmers “What is this thing called Science?” goes through many different ideas, coming to the conclusion that we do not have a clear answer to this question. For centuries, Western philosophers have been attempting to differentiate between scientific knowledge and other kinds of human knowledge, without any success. The latest approach, which enjoyed spectacular success in the early 20th century, had an equally spectacular crash in the late 20th century; see The Emergence of Logical Positivism. All of the four premises of scientism were advocated by Logical Positivism and came to be widely believed. Economists continue to believe in positivist methodology and use it to construct economic theory, even though it has now been discredited. After the collapse of positivism, confusion reigns as to the nature of science and scientific method. Since there is no clarity about what the scientific method is, the question of whether and how it can be applied to the study of human society is moot.

The source of all this confusion about science is the philosophy of Logical Positivism, which emerged in the early 20th Century. This philosophy was based on two misconceptions about science, which became widely accepted:

  • Science is based purely on observations and logic
  • Science is the only valid source of knowledge

Because this became widely accepted, the soft sciences – like politics, economics, etc. — were rebuilt on “scientific” foundations in the early 20th Century. Logical Positivism had a spectacular collapse later in the century, when it was realized that scientific hypotheses often involve unobservable real-world entities and forces, and also that there are many other sources of knowledge, beyond the realm of science. This made rebuilding social science on non-positivist foundations necessary, but this was never done (see: Rebuilding Social Sciences on Islamic Foundations Part 1 and Rebuilding Social Sciences on Islamic Foundations Part 2). Economists continue to believe in, and utilize, flawed positivist methodology as foundations for modern economics. One of the consequences of positivism is the rejection of morality as a branch of knowledge. This is obviously incompatible with Islam. Our new approach to Islamic Economics rejects positivism, and shows how we can rebuild the discipline on explicit moral foundations provided by Islam. It is important to note that all approaches to the study of human society must necessarily be built on moral foundations. Modern economics is built on the toxic moral foundations of greed, competition, and survival of the fittest – morality of the jungle. We aim to replace these with generosity, cooperation, and social responsibility as moral values aligned with Islam.


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