Lars P. Syll — Steve Keen, Noah Smith and heterodox ‘anti-math’ economics

Responding to the critique of his Bloomberg View post on heterodox economics and its alleged anti-math position, Noah Smith approvingly cites Steve Keen telling us there is

a wing of heterodox economics that is anti-mathematical. Known as “Critical Realism” and centred on the work of Tony Lawson at Cambridge UK, it attributes the failings of economics to the use of mathematics itself…

Although yours truly appreciate much of Steve Keen’s debunking of mainstream economics, on this issue he is, however, just plain wrong! For a more truthful characterization of Tony Lawson’s position, here’s what Axel Leijonhufvud has to say:

Lars P. Syll’s Blog
Steve Keen, Noah Smith and heterodox ‘anti-math’ economics
Lars P. Syll | Professor, Malmo University

Brad DeLong — Live from Yellowstone Lake Lodge: WTF!? Daniel Little: The Case for Realism in the Social Realm

Brad gets critical about critical realism. Regardless of who is correct (how can we know?), it is good to see economists dealing with fundamental ontological and epistemological questions.

Grasping Reality
Live from Yellowstone Lake Lodge: WTF!? Daniel Little: The Case for Realism in the Social RealmBrad DeLong | Professor of Economics, UCAL Berkeley

Lars P. Syll — On the value of theoretical models in economics

Constructing simple macroeconomic models somehow seen as “successively approximating” macroeconomic reality, is a rather unimpressive attempt at legitimizing using fictitious idealizations for reasons more to do with model tractability than with a genuine interest of understanding and explaining features of real economies. Many of the model assumptions standardly made by neoclassical macroeconomics – simplicity being one of them – are restrictive rather than harmless and could a fortiori anyway not in any sensible meaning be considered approximations at all. 

If economists aren’t able to show that the mechanisms or causes that they isolate and handle in their “simple” models are stable in the sense that they do not change when exported to their “target systems”, they do only hold under ceteris paribus conditions and are a fortiori of limited value to our understanding, explanations or predictions of real economic systems. 

That Newton’s theory in most regards is simpler than Einstein’s is of no avail. Today Einstein has replaced Newton. The ultimate arbiter of the scientific value of models cannot be simplicity. 

As scientists we have to get our priorities right. Ontological under-labouring has to precede epistemology. 

Lars P. Syll’s Blog
On the value of theoretical models in economics
Lars P. Syll | Professor, Malmo University

How many critics of neoclassical economics have heard of Resource, Events, Agents? 

It is important because it offers a way of doing mathematical modelling in economics that meets the Lawson critique.

Decisions, Decisions, Decisions
Mathematical Modelling in Economics that Meets the Lawson Critique
Andrew Lainton

Lars P. Syll — ‘New Keynesianism’ – neat, plausible and wrong

Econometric fol-de-rol. Or fool-de-rubes?

Lars P. Syll’s Blog
‘New Keynesianism’ — neat, plausible and wrong
Lars P. Syll | Professor, Malmo University

Econometrics Beat: Dave Giles' Blog

Econometrics vs. Ad Hoc Empiricism
Dave Giles

Tony Lawson — The nature of heterodox economics

Tony Lawson on ontology in the philosophy of economics.

ABSTRACT

Heterodoxy serves as an umbrella term to cover the coming together of separate projects or traditions. In answering the question, 'what distinguishes heterodoxy from the orthodoxy?', the author argues that matters of ontology are central. In answering the question, 'how are the various traditions that make up the modern heterodoxy to be distinguished from each other?', the author defends criteria other than varying commitments to specific substantive theories, policy measures or techniques (or basic units) of analysis.

Lawson, T. (2005). "The nature of heterodox economics". Cambridge Journal of Economics 30 (4): 483–505.
(h/t/ Jason Bessey on FB)

Daniel Little — Is ontology an apriori field of knowledge?

The question I am raising here is one of philosophical methodology: what kind of epistemic basis is available for formulating and defending a theory of ontology? How can we claim to know various truths about the nature of reality?

There seem to be three possibilities.

• Apriori philosophical argument: derive conclusions about the necessary structure of the world from apriori philosophical principles. This is traditional metaphysics, and few philosophers would advocate for it today. (foundationalist theory) 

• Transcendental philosophical argument: arrive at conclusions about what the world must consist of, in order to make sense of our cognitive abilities. This is Kantian metaphysics, which attempts to do without foundational assumptions and to derive conclusions from the prerequisites of epistemic achievements we are known to have. (internalist theory)

• Generalized empirical theorizing: all substantive representations of the world are hypothetical, justified by the contribution they make to our ability to formulate good, empirically supported scientific theories. This is the approach taken by naturalistic philosophers, who maintain that there are no apriori truths and the only vehicle we have for discovering the nature of the world is through scientific imagination and observation. (coherence theory)

Ontology appears to be about the world; but equally it might be considered to be about a set of particularly fundamental concepts and conceptual structures. The question, "What does the world consist of?" can also be presented as the question, "What concepts serve best to represent the hypothetical structure of the world underlying observations?" Concepts are the intellectual tools or schemes through which we analyze the world; and if they refer to unobservable entities, they are unavoidably hypothetical constructs.

As "knowing beings", it has been necessary for human beings to use their imaginations to come up with concepts in terms of which to analyze the world. Some conceptual systems are defective because they lead to expectations about the world that are not born out; other systems are more complex than necessary; yet others postulate entities or processes that we may have reason to want to avoid: magical forces, divine intervention, action-at-a-distance. And when we arrive at a conceptual scheme that appears to serve well as a durable basis for a range of scientific theories, we may want to conclude that the world actually has the properties attributed to it by the scheme....  [emphasis added] 

The philosophical debate is not over such approaches but also the final sentence quoted above. When if ever is it justified to conclude that reality has the characteristics attributed to it in a conceptual model? This involves criteria and unless criteria can be adduced that transcend conceptual modeling, how could such criteria be used to decide questions involving more than one model? In essence this is asking whether there are absolute criteria that are universally compelling? But then would not some other criteria be needed to justify the supposedly absolute criteria? Logically, this leads to either an infinite regress, a vicious circle, or postulating.

If the postulation is not to be arbitrary, however, it must be justified. The rationale is a philosophical position. The foundations of knowledge in general are not only at stake but that in various disciplines. Thus, there is a philosophy of each discipline that examines the foundations.

Economics is no exception, although most conventional economists dismiss both philosophy of economics and the study of methodology as already "decided" by the mainstream, since they take their conceptual framework as most suited to economic realities and their preferred methods as best adapted to the subject matter. Here the criterion is agreement, especially among the dominant members of the field.

Those not agreeing are deemed heterodox. And within heterodoxy, there are different foundational assumptions and methodological approaches.

Understanding Society
Is ontology an apriori field of knowledge?
Daniel Little | chancellor of the University of Michigan-Dearborn, Professor of Philosophy at UM-Dearborn and Professor of Sociology at UM-Ann Arbor

This may appear a bit wonkish if philosophy has not been your thing. But it's worthwhile working through this stuff if you want to understand the foundational nature of the much of the debate on key issues in other fields, including politics and policy. It's also fundamental to understanding framing.

Edward Fulbrook — Tony Lawson has changed our conversation

The case for Lawson’s significance that I argued five years ago and appears below seems to me even truer today....

Real-World Economics Review Blog
Tony Lawson has changed our conversation
Edward Fulbrook

I left this comment.

Tom Hickey
November 27, 2013 at 1:40 am | #6
Reply | Quote
Your comment is awaiting moderation.

The history of Western through can be viewed in terms of three shifts. The first was the shift from mythological explanation to ontological at the time of the Presocratics. The fundamental question was, What is there? The solution sought was in terms of first principles involving real causes.

The second shift was from the ontological to the epistemological, effected by Descartes. The question then became, What can we know about what is? Descartes answer was in terms of introspection, reason, and mathematics. Conventional economics is largely pursued in the Cartesian mode of assumptions arrived at through introspection and the application of mathematical reasoning to the assumptions.

The third shift was from epistemological explanation to logical analysis. The fundamental question became, What can we say meaningfully about what we think we know what is? Wittgenstein is often credited with this shift. Wittgenstein held that philosophical problems were analyzable into attempts to push language beyond its limits as in controversies over realism, idealism, and empiricism, or competing theories of ethics or aesthetics.

The search for knowledge must be informed by these three questions. The third to emerge historically is logically prior. We must first inquire into what we can say meaningfully. Then we must inquire into what we can know and how we can know it. There are the boundary conditions of knowledge. What we actually want to know, what is there and how does it function, is the final stage of this process.

Skipping the first two risk landing outside the boundaries of language and cognition. In economics, some economists and Bayesians resist Knightian uncertainty, for instance, as well as what threatens ergodicity, e.g., complexity and emergence. Interestingly in this regard, Cognitive scientist and author of Descartes’ Error, Antonio Damasio, David Dornsife Professor of Neuroscience, USC, was recently the keynote speaker at an INET conference. At the next conference I would suggest also having an analytic philosopher whose specialty is economic discourse.

Of course, I am not implying that Lawson’s ontological approach is misguided. I am just saying that the approach ontology has to be critical because we see through a lens of brain functioning and framing, that is, we are fundamentally ideological and and respectively take our worldviews as reality — which is a reason for cultural and subcultural differences. What you see is not what you get if you are looking through glasses that introduce distortion.