Knight’s uncertainty concept has an epistemological founding and Keynes’ definitely an ontological founding. Of course, this also has repercussions on the issue of ergodicity in a strict methodological and mathematical-statistical sense. I think Keynes’ view is the most warranted of the two.
The most interesting and far-reaching difference between the epistemological and the ontological view is that if one subscribes to the former, Knightian view – as Taleb, Haldane & Nelson and “black swan” theorists basically do – you open up for the mistaken belief that with better information and greater computer-power we somehow should always be able to calculate probabilities and describe the world as an ergodic universe. As Keynes convincingly argued, that is ontologically just not possible....The difference between unknown unknowns and unknowable unknowns.
To Keynes, the source of uncertainty was in the nature of the real — nonergodic — world. It had to do, not only — or primarily — with the epistemological fact of us not knowing the things that today are unknown, but rather with the much deeper and far-reaching ontological fact that there often is no firm basis on which we can form quantifiable probabilities and expectations at all....
Some unknown unknowns are knowable in principle and this may point toward the need for research. But, Keynes claimed, some are not. The trick is distinguishing them.
Research pursues unknown unknowns, but must avoid pursuing the unknowable as wasteful. How to distinguish them?
Lars P. Syll’s Blog
Sometimes we do not know because we cannot know
Lars P. Syll | Professor, Malmo University
There's always a tug between ignorance and cognitive-affective bias epistemologically. Humans are endowed with neither an all-seeing eye nor an all-knowing mind, although some people seem to think that they themselves have been thus blest.
ReplyDeleteIt doesn’t take a f-ing supercomputer to realize that if you rapidly increase reserve assets you make all depositories insolvent and shut down credit eatablishment...
ReplyDeleteKnowledge is attainable ― even in economics
ReplyDeleteComment on Lars Syll on ‘Sometimes we do not know because we cannot know’
Lars Syll maintains: “To Keynes, the source of uncertainty was in the nature of the real ― nonergodic ― world. It had to do, not only ― or primarily ― with the epistemological fact of us not knowing the things that today are unknown, but rather with the much deeper and far-reaching ontological fact that there often is no firm basis on which we can form quantifiable probabilities and expectations at all. Sometimes we do not know because we cannot know.”
Yes, this is a well-known fact of life since the Stone-Age. There are three ways to deal with the annoying human condition: (i) to repeat the mantra, I know that I know nothing, ad nauseam, (ii) to senselessly speculate about the unknowable which is the business of mysticism/religion/philosophy/journalism, (iii) to put the gray matter between the ears to work which is the business of science: “The object of reasoning is to find out, from the consideration of what we already know, something else which we do not know.” (Peirce)
So, the growth of knowledge in economics has to start with what we know for sure:
• the profit theory, false since 200+ years,#1
• Walrasian microfoundations (in particular equilibrium), are false since 140+ years,#2
• Keynesian macrofoundations (in particular I=S/IS-LM), are false since 80+ years,
• Walrasianism, Keynesianism, Marxianism, Austrianism and all variations/derivatives thereof are axiomatically false and materially/formally inconsistent,
• economists are scientifically incompetent,
• economics is a cargo cult science,
• the Bank of Sweden Prize in Economic Sciences is a fraud,
• economic policy guidance has no sound scientific foundations for 200+ years,
• economists are a hazard to their fellow citizens,
• economics needs a Paradigm Shift,#3
• Heterodoxy is incapable of performing the Paradigm Shift because heterodox and pluralist economists are just as stupid and corrupt as orthodox economists.#4
So, yes, economists know nothing. But it is false to maintain, as Lars Syll does, that this is an ontological fact.#5, #6 No, it is sheer scientific incompetence. Just the opposite holds: “We must not believe those, who today, with philosophical bearing and deliberative tone, prophesy the fall of culture and accept the ignorabimus. For us, there is no ignorabimus, and in my opinion none whatever in natural science. In opposition to the foolish ignorabimus, our slogan shall be: We must know — we will know!” (Hilbert)
Egmont Kakarot-Handtke
# 1 The profit theory is false since Adam Smith
https://axecorg.blogspot.de/2017/11/the-profit-theory-is-false-since-adam.html
# 2 New insight from Meta-Learning: delete economics
https://axecorg.blogspot.de/2018/04/new-insight-from-meta-learning-delete.html
# 3 How to get rid of an obsolete theory
https://axecorg.blogspot.de/2016/08/how-to-get-rid-of-obsolete-theory.html
#4 Economics: 200+ years of scientific incompetence and fraud
https://axecorg.blogspot.de/2017/06/economics-200-years-of-scientific.html
#5 Lars Syll, fake scientist
http://axecorg.blogspot.de/2018/01/lars-syll-fake-scientist.html
#6 Cryptoeconomics ― the best of Lars Syll’s spam folder
https://axecorg.blogspot.de/2018/01/cryptoeconomics-best-of-lars-sylls-spam.html