Bill Storage — Science vs Philosophy Again

Interesting post and I get a shout out.

The Multidisciplinarian — Bill Storage on engineering, innovation, and interesting problems
Science vs Philosophy Again

Bill Storage | Visiting Scholar in Science, Technology, Medicine & Society, UCAL, Berkeley, and vice-president of LiveSky, Inc.

George Cooper — Kuhn Wins The Piketty Debate

We are now far enough through the cycle of Piketty analysis to know how it will end. There will be no clear victor. Those who were instinctively supportive of Piketty’s thesis before reading his book will be able to ignore any alleged flaws in his data, and challenges to either his mathematical theory of capital accumulation or his narrative theory of capital destruction. This group will conclude what they already knew – inequality is too high and rising and should be addressed with higher taxation. On the other side, those who were immediately sceptical of his thesis will dwell on the discrepancies in his data and the challenges to his mathematics and history. This group will conclude that his thesis can safely be dismissed.

Of the small minority who have the time and patience to delve into multiple layers of argument and counter argument there will be a vanishingly small proportion who are persuaded to materially alter their position, based on what they have learned. A much larger number of people, on both sides, will find reason to consider their prior point of view as vindicated by the Piketty debate. This group will emerge from the affair with more deeply entrenched positions than before. As a result the economic debate will become more polarised and even more dysfunctional. In short, the confusion generated by Piketty’s book will push an already deeply dysfunctional economics further into crisis.

Perversely the deepening crisis in economics is a triumph for Thomas Kuhn and his theory of scientific revolutions.

Isn't this where we started with the orthodox-heterodox divide?

For those of us who enjoy debating macroeconomic issues this is all good entertainment. However, as a process for deciding how best to manage our economies, this sterile, divisive, debate is a dreadful way to proceed. Economics is ultimately responsible for setting the policies which determine the livelihoods of millions of people – we therefore owe it to ourselves and our children to find a better way to conduct the debate.

Fortunately Thomas Kuhn did more than just describe what scientific crises looks like, he also told us what needs to be done to resolve a scientific crisis. Kuhn explained we need to find a way to reconcile the apparently irreconcilable world views of the various competing schools of thought.

On the face of it appears an almost impossible task to find a theory which is able to agree with both the instinctively pro-Piketty crowd with his instinctive opponents. But with a little imagination there may be a way through this impasse.

Cooper's analysis of the design problem and proposal of a design solutions follows. Definitely worth a read.

Kuhn Wins The Piketty Debate
George Cooper

Justin Fox — Will Economics Finally Get Its Paradigm Shift?

Justin Fox reflects on George Cooper's new book.

Then it comes time to offer up his ideas for a new economics paradigm: 

1. Replace utility-maximizing economic man with a Darwinian fellow who simply wants to do better than the next guy.

2. Let this selfish creature fight it out in a macroeconomic model based on the circulatory system. “Capitalism would act to push wealth up the social pyramid,” Cooper writes, “while democracy, and its progressive taxation system, would act in the opposite direction to push it back down, causing a vigorous circulatory flow of wealth throughout the economy.”

So what makes modern capitalism work is not so much the accumulation of capital as its constant flow through the system. It’s an interesting thought. The basis of a new paradigm for economics? Hmmm. Cooper does his best to prep the reader by showing how intuitive and simple the insights of Copernicus, Darwin, and William Harvey (Charles I’s physician, who figured out how blood circulates through the body) were, but I still found his suggestions to be almost laughably crude. Maybe that’s just me. Or maybe it’s the natural initial reaction to a potential new paradigm.

Harvard Business Review — HBR Blog Network
Will Economics Finally Get Its Paradigm Shift?
Justin Fox | Executive Editor, New York, of the Harvard Business Review Group

Lars P. Syll — Economics in need of a re-think

George Cooper, author of the highly praised, The Origin of Financial Crises: Central Banks, Credit Bubbles, and the Efficient Market Fallacy, has a new book, Money, Blood and Revolution: How Darwin and the doctor of King Charles I could turn economics into a science.

Lars P. Syll | Professor, Malmo University
Economics in need of a re-think

Quoting George Cooper

My comment there:

I haven’t read Cooper’s book yet, but based on the passages quoted above, I would agree that economics is in a pre-revolutionary stage, much as classical physics was immediately prior to relativity and quantum mechanics. Nineteenth century physicists actually sounded a lot like today’s conventional economists that dominate the field and have declared the methodological debate over. Perhaps economics will get its Einstein, Bohr and Plank, et al.

And perhaps we see some the early work having already emerged in Keynes, Lerner, Minsky, Tobin, and Godley, as well as in philosophy, life sciences, psychology, and social sciences. I lead with philosophy there with a reason — economics is foundationally normative and economic institutions are not based on nature as much as they are on custom and law. 

The just so stories that economists since John Locke and Adam Smith tell about the origins of property, markets, money, utility, and motivation are just that — made up. There has been little serious examination of these key elements in conventional economics in light of the disciplines that actually study these matters empirically and historically.

A large stumbling block for conventional economists is “lack of formalization” that enables precise predictions. Well, that was a huge stumbling block in the acceptance of quantum theory as well. Even Einstein objected that God does not play dice and he never really accepted the stochastic nature of physical reality at its core. Maybe, just maybe, the subject matter exceeds the degree of precision that economists holding on to traditional econometric models admits — as Keynes, who knew something about probability, told Tinbergen.

Comment by Tom Hickey— 24 March, 2014 #

Bill Storage — Are You Kuhnian?

For the epistemologically inclined:

So let’s take a look at the minimal Kuhn and then some of the main flavors of Kuhnians. Among Kuhn essentials, I see:

1. There is normal science and then revolutionary science, which causes a paradigm shift to the next normal science.

2. Revolutions, originating in crisis, are required for paradigm shifts

3. Inter-paradigmatic communication is impossible (Kuhn’s “incommensurability”).

4. Theories fully pervade observation; observation language that is free of theoretical influence is impossible (Kuhn vs. Popper)

5. Paradigms dictate - not reflect – the world. Reality is constructed, not observed.

6. The ultimate desideratum of truth is solidarity.

The first three claims are what Kuhn and his defenders see as his core material. But he explicitly and repeatedly states points 4 and 5 in unambiguous terms – and point 5 in terms nearly identical to the postmodern constructivists who preceded him. Point 5 is something Kuhn doesn’t state explicitly but is an unavoidable conclusion from his discussion of points one through three.

The Multidisciplinarian
Are You Kuhnian?
Bill Storage

Clarification: "normal science" means doing science within a paradigm. It's what scientists normally do "as a rule" (norm = rule).

Matias Vernengo— Shift happens indeed

Matias Vernengo contrasts Popper's premise that falsification of hypotheses is paramount in science, and Kuhn's view that it is the explanatory and predictive power of theories that is basic. I see them as complementary. Normal science is conducted along Popperian lines, while Kuhnian paradigm shift, in which the normal paradigm is replaced by another, is institutional and pragmatic rather than being based chiefly on testing specific truth-value.

Read it at Naked Keynesianism
Shift happens indeed
by Matias Vernengo