Invisible hand-waving — Is economics a science?

Laktos v. Popper in philosophy of science applied to econ. First on a series on economics as science by two grad students at Oxford.

I think that rather than seeing science as just the sum of all scientific statements, we should view science as a web of research programmes, such as quantum mechanics or evolutionary biology. This is the view put forward by Imre Lakatos. Research programmes are essentially comprised of three parts: certain fundamental views and baseline assumptions which are unfalsifiable (the ‘hard core’), some rough rules of how and how not to go about solving scientific problems (‘positive and negative heuristics’), and a set of hypotheses which scientists use to generate and test predictions (the ‘protective belt’). For example, in the Newtonian research agenda, the ‘hard core’ consists of unfalsifiable baseline theoretical assumptions such as ‘every action has an equal and opposite reaction’. There is a ‘positive heuristic’ towards mechanistic, materialistic explanations of natural phenomena (hence Newton’s problems explaining gravitational forces). The ‘protective belt’ would include hypotheses like the predicted motion of the planets.

For Lakatos, the hallmark of a ‘progressive’ scientific research programme is not whether it is falsifiable. In fact, the ‘hard core’ is unfalsifiable, and much of the protective belt is often falsified as scientists puzzle over how to accommodate various pieces of evidence. Rather, the hallmark of a progressive scientific research programme is whether or not the theory makes successful novel predictions. In other words, is the theory is able to successfully predict new phenomena which it was not originally built to explain?….

Invisible hand-waving
Is economics a science?

ht Mark Thoma at Economist's View

Also

Argues for Friedman's instrumentalism.

I think this grossly overlooks the motivation for pursuing knowledge in the first place. This putting forward the most reasonable explanation of change that answers the questions, how and why. In philosophy, this is based on self-evident first principles, which are called assumptions in economics. In science, the answers are tentative on testing through hypothesis testing. Friedman's instrumentalism is not science but philosophy.

In philosophy, the why question is answered by reasons, e.g., in accordance with the principle of sufficient reason. In science, on the other hand, the answer is expected to be in terms of causes, that is, answering the questions both why and how.

Correlation does not prove causation, and satisfactory explanation is about causation unless one accepts Hume's metaphysical assertion that causation is only constant correlation since human knowledge does not extend to causal mechanism. That is a philosophical position that is dogmatically asserted rather than a scientific one, and it is a contested one in theory of knowledge.

Causation is one of the deep issue of human intellectual history, debated for millennia. It is still unresolved. Friedman's instrumentalism is hand-waving. If this is the best that economists can do, they should just hang it up.

Assumptions, Milton Friedman and wise trees