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epistemology

Scientific epistemology is a serious business in economics—as it is in any science. Not surprisingly, therefore, discussions about value-ladeness tend to focus on theoretical and methodological issues within the discipline, while the question of the social consequences of science is approached with more reservation. And for many good reasons, one may say, because it is not entirely up to scientists how will the scientific product be disseminated and interpreted in society, or how will it be used by policy makers. Or, that’s not the job of the scientist, one could reason, to determine and be ready for all possible applicative scenarios.

Since the last few decades, research practices have undergone a far-reaching transformation at the interface between science, policy and society. It involves an increased engagement of science in problem solving and policy advice, and the enhancing role of participatory research methods in problem-based approaches. The social consequences of science become therefore more readily visible, opening up new perspectives on debates about facts and values dichotomy, or the relationship between knowledge, truth, and values (cf. Kitcher, 2001). One way of looking at the transformation of scientific practices focuses on the criteria of scientific rationality with regard to scientific knowledge and the very process of knowledge production, echoing a Weberian contrast between instrumental and axiological rationality of social action (Weber 1968). Specifically, the scientific rationality criteria have been extended in the process from purely (i) internal rationality, that can be defined as a conventional scientific rationality approach focused on disciplinary epistemology and methodology, to (ii) external rationality that pertains to axiological, ethical, and societal elements of knowledge and its production (Kiepas, 2006). 

There are many reasons for including external rationality in scientific practices. For one thing, all applied sciences can be considered as value-laden in virtue of their goal-oriented values (Pullin, 2002). Furthermore, many contemporary problems, as subjects of research, are radically complex. They are laden with systemic uncertainties, meaning that “the problem is concerned not only with the discovery of a particular fact (as in traditional research), but with the comprehension or management of a reality that has irreducible complexities or uncertainties” (see more in Funtowicz & Ravetz, 1994, p. 1882). They also pose future incalculable risks in an unprecedented scope. For example, in the context of complex, adaptive problems such as climate change, uncertainty in science follows (Brown, 2013). Scientific uncertainty regarding the severity and scope of the problem fuels general disagreement about the appropriate actions to undertake. Attempts to accurately assess all the possible climate change impacts and to exhaustingly assign an economic value to alternative courses of action are bound to fail (Jamieson, 2010). That being the case, the policy-relevance of standard economic analysis as the sole knowledge-base for environmental decision making is limited.

In case of economics, the shift in approaches to rationality can be seen in debates about reflexivity in economics, bounded rationality, or performativity of economic models, to name a few topics. But for the most part, ethical- and value-neutrality continue to feature much of economic research, such as in standard normative theories of decision making under uncertainty and risk. The burgeoning of economics as a separate discipline, accompanied by distancing from philosophy, build up strong methodological foundations to prevent any extra-scientific elements to interfere in its analysis (cf. Hausman, 1992).

The classic conceptualisation of uncertainty and risk in economics is very specific and differs from the above-mentioned, sociologically incrusted understanding. Following the paradigmatic distinction formulated by Knight (1921), uncertainty refers to situations of radical uncertainty that cannot be expressed as sets of probabilities, whereas risk is related to situations in which actions do not lead with certitude to specific outcomes, but the alternative outcomes and their probabilities can be discerned. 

The categories of uncertainty and risk, as considered here, lend themselves to complexity of many policy issues, and are associated with the transformation of postmodern societies due to technology, consequences of globalisation, and environmental crises that follow (Beck, 1992; Giddens, 1990). These circumstances, “external” to standard methodological practices, motivate the extension of scientific rationality criteria and rethinking the role of science by researchers themselves. An example of this transformative process is the so-called advocacy science for environmental justice. It represents a socially engaged, multidisciplinary research approach that emerged in response to environmental toxicity movements, and developed an alternative epidemiological paradigm based on participatory research methods (see, e.g., Ottinger & Cohen, 2011).

With regard to the interface between science, policy, and society and the extra-scientific aspects of uncertainty and risk, one can note that the assessment and acceptance of risk are not purely a matter of data analysis or applying the “right” indicators. The perception and interpretation of uncertainty and risk are influenced by a mixture of social, political, and scientific processes that interact with each other. Consider the relationship between environmental pollution and risk. While pollution appears to be solely as a matter of scientific measures, the question of what is an acceptable level of pollution and its risk for a given society, and whether there are cases of unacceptable risks, involves our pre-conceptions and assumptions about what constitutes a good quality of life, wellbeing, and sustainable development (cf. Evernden, 1999).

Why would an individual economist care about the science-policy interface, or about considering extra-scientific elements of her research practice? There are several reasons to seriously reflect on this question. For one thing, transparency about the value content of specific research programs may translate into more careful and accountable approach to complex problems of public policy and the remedying capacity of science and technological progress. Furthermore, Söderbaum (2000) argues that economics should be more properly approached as political economics to make clear the fact that each scientist, as the discipline itself, has an ideological orientation (in the sense of means-ends philosophy) that plays out in the problem-framing, and reflects on the performative features of economic expertise. To the latter point, the analyst’s conclusion that reduces the extra-monetary aspects of a given problem to monetary ones is not without policy consequences; it suggests certain framings and solution-imageries to economic agents and decision makers. Besides, academia itself is not free of subjective interests and rent seeking. But—I haste to add—this does not undermine the value of scientific expertise per se. Neither does it suggest that citizens and policy makers are passive or unreflective recipients of scientific knowledge. It rather suggests a double-edge approach to science that recognises the subjective, cultural, and societal components in scientific practices on the one hand, and the aspiration of scientific community to reach objectivity (understood broadly as a normative objective) on the other hand. Although scientific practices are saturated with theoretical pre-conceptions and cultural perspectives, it does not immediately follow that science has nothing to do with truth and objectivity (a subject that deserves a separate discussion). 

The double-edge approach to science calls for more explicit discussions about the social consequences of science and scientific literacy in society:

  • Concerns about the role of science and scientific expertise in society may facilitate disciplinary reflexivity. It may also feed into methodological approaches. In case of economics, instead of focusing only on expanding the standard framework of economic analysis onto new subjects, concerns about the social consequences of science create a platform for a more direct consideration of methodological alternatives. Especially for contexts in which standard economic tools of analysis display some limits (e.g., cost-benefit analysis in sustainable development planning), alternative approaches that directly accommodate non-monetary impacts and justice concerns are needed (Brown et al., 2017). 
  • According to a political scientist Frank Fischer, in face of technical and social complexity that characterises most of policy issues, citizens and politicians need to display a good level of competence (2009, 1). In this context, an urgent question arises: how to democratise science on the one hand, and how to prevent populism and the spread of fake facts to take the provenience of science (as a source of information about the world) on the other hand? While the aspiration of science to be the absolute truth holder has been widely challenged, it does not immediately follow that there is nothing to scientific knowledge that would make it somehow different from other forms of knowledge. No differentiation at all can give way to anti-science of dangerous kind, in which “facts” are matters of preferences or interests. A caveat here is in order: such differentiation does not imply that scientific knowledge is inherently better than any other form of knowledge.

Certainly there are many challenges to balancing the double-edge approach to science both within and outside of the scientific community, as there are multiple philosophical framings of the role and status of scientific expertise in society. To be continued!

References

Beck, U. (1992). Risk Society: Towards a New Modernity. London: Sage.

Brown, J. Söderbaum, P. & Dereniowska, M. (2017). Positional Analysis for Sustainable Development: Reconsidering Policy, Economics and Accounting. London: Routledge. 

Evernden, N. (1992). The Social Creation of Nature. Baltimore and London: The John Hopkins University Press.

Hasuman, D. M. (1992). The Inexact and Separate Science of Economics. New York: Cambridge University Press.

Fischer, Frank (2009). Democracy & Expertise. Reorienting Policy Inquiry. Oxford: Oxford University Press.

Funtowicz, S. O. & Ravetz, J. R. (1994). Uncertainty, Complexity and Post-normal Science. Environmental Toxicology and Chemistry 13(2), 1881-1885. 

Jamieson, D. (2010). Ethics, Public Policy, and Global Warming. In S. M. Gardiner, S. Caney, D. Jamieson & Henry Shoue (Eds), Climate Ethics. Essential Readings (pp. 77-86). Oxford: Oxford University Press.

Kiepas, A. (2006). Ethics as the Eco-development Factor in Science and Technology. Problems of Eco-development 1(2), 77–86.

Kitcher, P. (2001). Science, Truth, and Democracy. Oxford University Press, Oxford, New York. 

Knight, F. H. (1921). Risk, Uncertainty and Profit. Chicago: University of Chicago Press.

Ottinger, G. & Cohen, B. R. (Eds). (2011). Technoscience and Environmental Justice. Expert Cultures in Grassroots Movement. Cambridge: the MIT Press.

Pullin, A. S. (2002). Conservation Biology. Cambridge & New York; Cambridge University Press. 

Söderbaum, P. (2000). Ecological Economics. A Political Economics Approach to Environment and Development. London: Earthscan/Routledge.

Weber, M. (1968). Economy and Society. New York: Bedminster Press.

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That economics is a value-laden science is not a new idea. Most of the prominent economic thinkers were also philosophers, wary of moral and philosophical content of scientific assumptions, models, and theories. That economics needs philosophy, and the separation between these two cannot be maintained any longer, is gaining recognition, and has become a subject of debates in the field of philosophy of economics that brings together (to various extends) philosophers, mainstream, and heterodox economists. For example, Daniel Hausman (1992) discusses that at an analytic level economists do successfully separate the philosophical and ethical content from economic analysis, albeit this separation is possible only at the analytic level. Karl Polanyi (1957), in his discussion on the entanglement of economic activities in the social totality, gives insights from a different perspective how considering the subject of economic study in social vacuum can in fact lead to thinking that scientific practice indeed has disentangled from society.

Today economists of both mainstream (e.g., Jean Tirole) and heterodox approaches more readily admit: economics is a moral and philosophical science. Yet the meaning and scope of the normative components of economics, the epistemic consequences of the social embeddedness of science, and the social consequences of economics are raising so far inconclusive debates. These issues constitute two-tiered dimensions of scientific rationality: external and internal ones. While the criteria of internal rationality (which constitute the standard approach to scientific rationality) refer to disciplinary epistemology and methodology, the criteria of external rationality involve the axiological, ethical, and societal elements of the process of knowledge production and the social consequences of science.

Interestingly, as Gustav Márquez (2016) points out, even in the field of philosophy of economics, the discussions are often focused on the elements of what I call here internal rationality. Márquez argues that the predominant focus on these issues characterize the mainstream philosophy of economics, while the more normatively-laden issues, such as a broader theoretical reorientation towards more responsive and socially engaged approaches (which I considered as aspects related to the external scientific rationality), are not so much a part of the dominant concerns and discourse.

Why would an external rationality matter? What is the meaning of the social consequences of economics as a science? And how the acknowledgment of the value-laden component of scientific practices plays out in research practices of the scientific community, and of an individual researcher? These questions are not easy to answer, as they involve several complex issues, such as what is the meaning of scientific truth, scientific objectivity, how to account for the normative components of science, or what are the grounds for our confidence in scientific methods and analysis—to name a few. While each of these questions opens a Pandora box by itself, my goal is to simply open up some of the ways these profound issues can be approached for a discussion. My guiding thought is that one of the elements that drastically shapes our take on these questions pertains to the context in which science and the process of knowledge production is considered.

My specific focus will be on the role of science in society and for policy making. In my next entries of the WEA Pedagogy Blog, I am going to consider several issues, problems, and controversies raised at the intersection of economics, society, and policy, with an eye towards their educational and pedagogical challenges. My objective is to problematize, hopefully for a broader discussion with the readers, the fact that the specific philosophical commitments (e.g. ontological and epistemological assumptions about the role of science, function of knowledge, scientific truth, etc.) bear impact on how the epistemic consequences of the value-ladedness of economics are framed, and on the acknowledgment and role assigned to the extra-scientific components of research practices.

References:

Hasuman, Daniel M. 1992. The Inexact and Separate Science of Economics. New York: Cambridge University Press.

Márquez, Gustavo. 2016. A Philosophical Framework for Rethinking Theoretical Economics and Philosophy of Economics. London: College Publications.

Polanyi, Karl, [1944] 1957. The Great Transformation. Boston: Beacon Press.

Friday, 26th Jan 2017: Lecture by Dr. Asad Zaman, VC PIDE to students at University of Cambridge, Center of Development Studies for Religion & Development paper. 40 minute video recording of lecture on you-tube. For related posts, see: An Islamic Approach to Humanities.

Part 1: “What Is Spirituality?”:  Modern Secular thought takes spirituality and religion to be diseases which affect weak minds not properly trained in the scientific method. Part I of this lecture explain why this view, which is based on positivist ideas, is seriously mistaken. OUTLINE of this lecture is given below

Separate Lecture Part 2:“What is Development” focusing on how spirituality affects how we think about development and how to achieve it.

  1. Standard Modern Answer
    1. Spirituality is a literary term, used to spice up poetry and novels.
    2. It is like Phlogiston, Unicorns, Ghosts, Souls, God
    3. It is one among many medieval beliefs, like flat Earth, which have been proven wrong.
  1. Why don’t we understand spirituality?
    1. Because we have been trained to think like Logical Positivists, EVEN though this philosophy has been proven wrong! Key wrong positivist beliefs:
    2. Unobservables do not matter for science
    3. Science explains the observable patterns. It may postulate things like atoms, gravity, but this is just for convenience. Existence of gravity is not part of scientific assertion.
    4. Kant: Thing-In-Itself is not knowable, not relevant for science. Wittgenstein: Wherof one cannot speak, thereof one must be silent. ALSO, The human body is best picture of the human soul (That is, observables matter, unobservables don’t)
    5. SCIENCE is the ONLY source of valid knowledge.

Read More

RFCUBVR

Max Weber wrote that “The fate of our times is characterized by rationalization and intellectualization, and, above all, by the ‘disenchantment of the world.’ Precisely the ultimate and most sublime values have retreated from public life …” The disenchantment of world leads to the modern view of the heart as merely a pump for circulation of blood.  The ancients had deeper understanding; as Pascal said “The heart has its reasons, which reason does not know. We feel it in a thousand things. It is the heart which experiences God, and not the reason. This, then, is faith: God felt by the heart, not by the reason.” Elevation of the head above the heart has led to a loss of wonder at the myriad mysteries of creation which surround us, and also caused deep damage to human lives in many dimensions. As our Poet Laureate Allama Iqbal emphasized: “At the dawn of Judgment, Gabriel told me, Never accept hearts which are enslaved by the mind.” Read More

In accordance with the pedagogical mission of this blog, and also in accordance with the desire to create a canonical heterodox text, which could serve as a focus point for a united opposition to orthodoxy, I am planning create a series of lessons, targeted at students with some minimal knowledge of conventional macro and micro. The first lession is given below:

METHODOLOGICAL PREFACE:

This textbook takes a historical approach to macroeconomics. We will first teach the CLASSICAL ECONOMIC THEORY (CET), dominant before Keynesian economics. Then we will explain the events that created doubts about this theory. Then we will see how Keynes developed a new theory to explain these events. Then we will discuss further developments on this story, about how Keynesian economics was attacked, and something more or less equivalent to CET re-enthroned as the dominant economic paradigm. At all times, the economic theory will be related to actual historical events which were taking place, so that the relation between theory and practice becomes clear. Although we will try to provide the most elementary treatment possible, some familiarity with basic economic concepts will be very useful in following this textbook.

We will start by discussing one of the most basic laws of economics — price determination via equilibrium in supply and demand. This law tells us how prices are determined. As we will see later, this law is false. The student might ask: Why should we study this law, if it is false? To understand the behavior of the economic system, it is essential to understand how human beings react to the events around them. The theory of price as being determined by equilibrium between supply and demand is widely believed. Economists, policy makers, and others use this theory to understand what is happening in the world, and then take actions in accordance with this understanding. To understand how people who believe in these false theories behave, we must understand what these theories are. We will also try to understand how it happened that this false theory came to be widely believed.

The MAIN POINT here is that human beings take actions according to the theories that they believe in. To understand human behavior, we must understand the theories that guide this behavior. Whether the theory is true or false does not matter for this purpose. It is very important to note that in assigning this role to theories, we have already deviated drastically from the conventional methodology of economics. According to the conventional methodology embodied in CET, human beings act to maximize a utility function, regardless of what theories they believe in. Thus, according to conventional methodology, economic theories actually describe human behavior. We are operating at a meta-theoretical level; we consider economic theories as beliefs of some human beings, which guide their behavior. In terms of the framework that we are using here, we can describe conventional economic theory as follows [some of the terms are not defined precisely, because the precise specification does not matter for present purposes.]

Fundamental Axiom of CET: All human beings believe that the goal of life is to maximize lifetime utility of consumption, and they act to try to achieve this goal.

We will refer to people who satisfy this axiom as homo economicus. According to CET, human beings are robots who behave according to the law prescribed by the fundamental axiom. In contrast, our framework gives human beings choice and agency. People chose their beliefs, and can change these beliefs. They are free to act, according to the choices they make about their belief-systems.  We replace the fundamental axiom of CET by the idea that different people may have different goals in life, and they act to try to achieve these goals. The Zen Buddhists believe that desires to have and to not have are the source of suffering, and so the goal of life is to achieve indifference to consuming or not consuming. Muslims believe that moderation in consumption is best; excess consumption is harmful and prohibited, while abstaining from enjoying the gifts of God is also not recommended. Obviously, people with different beliefs would act very differently from homo economicus. More generally, people act in the world according to their belief systems. Thus we study belief systems in order to understand how people act, and not in order to decide whether the belief systems are true or false. Classical Economic Theory (CET) is a particular specialized belief system about the world which has a powerful grip on minds of an extremely powerful and influential group of people. Furthermore, this belief system is widely propagated via textbooks in university, as well as other media, so that various aspects and implications of CET have come to be widely believed. Therefore, it is important to study this belief system, because without knowing it, we would be unable to understand a lot of events which are happening in the world around us.

Published as: Zaman, A (2016)  “Positivist Misconceptions: An Obstacle to Understanding Pluralism” International Journal of Pluralism in Economics Education, Vol 7, No. 1, pp 93-96.

More articles on Logical Positivism and its disastrous impact on economics & human knowledge.

At the heart of the problems we face in the world today is a disastrously wrong theory of knowledge. The vast number of errors within this theory of knowledge have been deeply imbibed by the populace, and have become part of the background assumptions under which we operate. These assumptions are not even open to examination and challenge, because they are buried underground as foundations for our thought structures. I would like to examine some of these misconceptions and explain why these create insurmountable obstacles in the path to our quest for the truth.

A Central Enlightenment Myth: Facts and Logic are sufficient to lead us to the truth.

As a corollary, our opinions do not matter. Human beings, their thoughts, anxieties, concerns, as well as personalities, are all irrelevant in the quest for truth. Subjective elements cannot and should not be part of scientific theories. Also, science, scientific knowledge is all there is – genuine knowledge is impossible outside the realm of what is objective. In opposition to this idea, I would like to put forth the following:

The facts by themselves are never enough to lead to the truth.

Just one among many reasons for this is because causality is not observable, and causality is an essential component of the truth we are seeking. Given a sequence of events – for instance a revolution – we can only guess at causes, because there are multiple factors all of which happened simultaneously, and we cannot isolate the cause or causes from irrelevant observable factors. At the same time, understanding of reality requires isolation of the cause.

Many different ways of analysis all lead to the same conclusion. To learn about causality requires an analysis of “what might have been” – what would have occurred if a particular factor had been changed. This is unobservable by definition. According to standard positivist theories of meaning, such analyses are meaningless, because all references to unobservables are inherently meaningless. Note that this conflicts violently with our intuition that is it perfectly meaningful to contemplate what might have happened if Napoleon had won at Waterloo, and there can be sensible analyses as well as wrong analyses about this hypothetical unobservable. It is this type of analysis about unobservables that leads us to clues about causality, which always remain intelligent guesses, and can never be translated into certainties. Read More

My recent post on RWER Blog asks if there is a “CORE of heterodox economics” which we can all believe in? From the responses to my previous post on whether or not there was a core set of heterodox beliefs, it became clear to me that I have started in the wrong place. Before starting the task of constructing an alternative paradigm, we must clear away the debris of the ruins of the conventional paradigm. Frederic Lee & Steve Keen remarked in the introduction to their article on the “The incoherent emperor: a heterodox critique of neoclassical microeconomic theory” that heterodox economists often come to the defense of conventional economics, because they are ignorant of the vast range of devastating critiques against these theories. To create a revolution, we must change from lukewarm heterodoxy (a partial rejection combined with a partial acceptance of the errors of conventional theories) to a genuinely radical approach requiring a complete rejection. When the errors of the conventional approach become as obvious as the error in “2+2=5”. we will not waste time coming up with new proofs that this is a fallacious calculation.

I would like to put forth a few propositions which provide a clear demonstration of the errors of conventional economic theory. I am hoping that disagreements about these central propositions can be cleared away by discussion, so that we can create consensus about complete rejection of conventional economic theories. After this step is completed, we could move forward to thinking about how to construct alternative foundations.

Propositions: Methodological Mistakes

  1. Logical Positivism is a theory of knowledge. It describes scientific knowledge as being based on observations (facts) and logic. It also excludes huge chunks of human experiential knowledge (such as morality) from the domain of knowledge. As one its early and enthusiastic proponents A J Ayer put it, moral statements are as meaningless as a cry of pain.
  2. In the early twentieth century, foundations of economic theory were revised to put them in line with the ideas of logical positivists about science, in an effort to make economics a “science”. Cooter and Rappoport showed how Lionel Robbins’ definition of scarcity, in line with positivist ideas, drove out earlier definitions of economics based on “material welfare”.
  3. Logical Positivism had a spectacular crash. Even its most enthusiastic exponents admitted to having been wrong. HOWEVER, the foundations of economics (and econometrics) were never revisited. Thus the foundations continue to be based on ideas which have been proven wrong. In my paper Methodological Mistakes and Econometric Consequences, I have shown how positivist foundations for econometrics have led to a seriously defective methodology currently in use.
  4. In my paper on The Normative Foundations of Scarcity, I have explicitly shown that apparently objective concept of “scarcity” conceals within it at least three normative principles. Thus, contrary to a central claim of conventional economic theory, it is a normative theory, and not a positive one.

The above critique is deep and philosophical. There are more obvious and direct approaches to a complete rejection.

Proposition: Empirical Failures of Conventional Economics

  1. Economic theory of consumer behavior is completely wrong as a descriptive theory. The massive amount of evidence is gathered in my paper: Empirical Evidence Against Utility Theory: A Survey of the Literature.
  2. Economic theory of the firm is completely wrong as a description of firm behavior. A massive amount of evidence is gathered in “Debunking the Theory of the Firm” by Steve Keen and Russell Standish
  3. The economic theory of price determination via equilibrium between supply and demand is completely wrong. I have provided a simple example and explanation of its failure in my paper on “Conflict Between General Equilibrium and the Marshallian Cross”. This shows that partial equilibrium supply and demand analysis in one market is in conflict with general equilibrium results, so both cannot be right. Steve Keen and Russell Standish, and perhaps others as well, have gone much further, and provided an alternative theory of price determination.
  4. Once we see that consumer theory, producer theory, and equilibrium theory of price determination are all clearly and obviously wrong, does there remain any further issue to discuss about errors of conventional economic theory? Why should we waste time discussing theories which take all three of these basic building blocks for granted and then construct more complex arguments?

In practice, I have found that to create the courage of conviction required to launch a revolution, it is not enough to just provide a logical argument, or an empirical demonstration, of the fallacies of conventional economic theories. It is so hard to believe that highly intelligent people, capable of mastering the complexities of technical mathematics required for general equilibrium, could go so seriously astray. Thus, in order to make plausible the idea that massive amounts of effort are being poured into completely fallacious theories, one must study the story of the rise and fall of logical positivism. This is the key to understanding why current economic theories are so seriously defective, and also how we can avoid making the same errors which led to this disaster. Instead of answers, I pose the following questions which we must learn the answers to, in order to understand HOW an intellectual tradition became corrupted by logical positivism.

  1. What is the theory of logical positivism? More importantly, why did it become so wildly popular? How is it that some of the most intelligent people in the twentieth century came to believe in its central propositions? It must be the case that the defect in logical positivism is a subtle one, to take in so many innocents into its trap.
  2. Interestingly, a recent survey by Hands, cited in my paper on Normative Foundations of Scarcity, shows that most economists continue to believe in some the key propositions of logical positivism, even though it has been thoroughly refuted by philosophers. Here is the key to the failure of heterodoxy: most heterodox economists also continue to believe in some key propositions of logical positivism. As a consequence, it is impossible for them to construct a sound alternative to conventional economic theories.
  3. FOR STARTERS: we must learn WHY the argument for revealed preference, which deceived Samuelson, is wrong. As per standard positivist ideas, preferences are internal to the heart and unobservable; hence they cannot be used in scientific theories. So Samuelson came up with the idea of using the observable Choices – unobservable preferences are revealed by observable choices. Instead of unscientific arguments about unobservable preferences, we can make scientific arguments about observable choices. Samuelson’s Nobel Prize cites his contributions in making economics a scientific subject. Yet the basic argument is wrong; one cannot eliminate the unobservable preference from economic theories. Understanding this error, which Samuelson failed to do, is the first knot to unravel, in order to clear our minds and hearts of the logical positivist illusions.