Lars P. Syll — Methodological arrogance

On reductionism.

This is also the case in philosophy where different methods attempt to exclude other methods by reducing the debate to a lower level of data, e.g, sense data only, or lower order of abstraction, e.g., all abstraction must be reducible to first order. These methodological assumptions reduce justification to observations of objects. For example, David Hume used philosophical reduction to sense data to exclude causality, arguing that causality is nothin more than observation of constant correlation.

The idea is that everything at a higher scale must be accountable at a lower scale. This doesn't even apply in physics (yet) as the hardest science, where the scope of quantum mechanics (micro) and cosmology (macro) still fall outside each other, and questions loom about how to reconcile the micro and macro levels.

To insist on reduction to individual psychology and behavior in economics is indeed arrogant, especially when the social unit in sociology is the family and economic considers economic units in terms of households and firms, and neither human psychology nor behavior are well understood (explained) scientifically.

Reductionism is a methodological assumption that is unsubstantiated by rigorous criteria. It is a stipulation and insisting on it as exclusive is arrogant when there are alternatives in the debate. This is the arrogance of dogmatism rather than open inquiry as the basis of gaining knowledge and the origin of scientific method in an environment where theology reigned.

In short, it is not only arrogance, it is dangerous, as Popper recognized. This is the point of the open society he advocated. Freedom of thought and expression is the basis for inquiry, discovery, and creativity. The discipline of economics risks falling into irrelevance if orthodoxy insists on imposing methodological reductionism as "settled."

Lars P. Syll’s Blog
Methodological arrogance
Lars P. Syll | Professor, Malmo University

Russ — The Elemental Falsity of Genetic Determinism

Today the establishment “life sciences” tread as epigones the same path of reductionism and mechanism which physics trode in the 19th century, the path which physics debunked and abandoned long ago. Social Darwinism, biological determinism, genetic determinism, sociobiology, this ideological complex never had any scientific validity and was demonstrably false even prior to its full congealment. Francis Crick’s aptly named “Central Dogma” was already known to be false at the time he promulgated it. The same was true of the foundation doctrine of “one gene = one trait”, which together with the Central Dogma comprised the ideological basis of biological determinism. 

This “science” was falsified in toto and in detail even prior to its full ideological elaboration in the 1970s. It has since continued as the greatest scientific fraud ever perpetrated. It’s not just that determinist theory is completely wrong – almost all of history’s scientific theories were disproven, and almost certainly most of those believed in today will be disproven. It’s that this “theory” has always been known to be wrong by its publicists, and yet they fraudulently go ahead anyway. Crick with his dogma of a one-way information flow from DNA to proteins when it was already known biological information loops back from proteins to DNA is just the most infamous of the countless examples of conscious lies on the part of these charlatan “scientists”..In truth biological determinism is just the transcription of Randroid hyper-individualism and the “genius” delusion to the realm of pseudo-science. This junk science gets such a preponderance of funding and fawning mass media publicity because it’s a potent branch of capitalist propaganda..Even in basic form, biological determinism is not scientific but religious [ideological].…

Volatility
The Elemental Falsity of Genetic Determinism

Russ

Daniel Little — Do we still need microfoundations?

On examining assumptions and avoiding reductionism without invoking magical thinking, and ontological individualism as an overly restrictive reductionist assumption.

Understanding Society
Do we still need microfoundations?
Daniel Little | Chancellor of the University of Michigan-Dearborn, Professor of Philosophy at UM-Dearborn and Professor of Sociology at UM-Ann Arbor

David Glasner — Representative Agents, Homunculi and Faith-Based Macroeconomics

Another fun excursion extending his the analogy of philosophy of mind and reductionism about representative agent modeling. Well played.

Uneasy Money
Representative Agents, Homunculi and Faith-Based Macroeconomics
David Glasner

Daniel Little — Why emergence?

Little argues that emergence is unnecessary to evoke in order to avoid reductionism, methodological individualism, and microfoundations. There is reason to hold that causal explanation stems from the macro (system) level as well as the meso (institutions, sub-systems) level, in addition to the micro (individual) level.

Understanding Society
Why emergence?
Daniel Little | Chancellor of the University of Michigan-Dearborn, Professor of Philosophy at UM-Dearborn and Professor of Sociology at UM-Ann Arbor

Philip Pilkington — Some Personal Reflections on Contemporary Economic and Scientific Indoctrination

The new religion — science. Same as the old religion when used normatively and prescriptively.

However, to the degree that C. P. Snow is  right about the two cultures, science and the humanities, quite a few people read in the humanities rather than science and come to opposite conclusions. I was one of the latter.

One path leads to materialism and reductionism and the other to humanism and holism.

There is no barrier to their integration, however, other than rigid thinking.

Fixing the Economists
Some Personal Reflections on Contemporary Economic and Scientific Indoctrination
Philip Pilkington

Daniel LIttle — Social causation

Good summary of basic issues and alternative theories.

Understanding Society
Social causation
Daniel LIttle

Lars P. Syll — The state of modern macroeconomics – indescribable misery

Lars explains in some detail what is wrong with dominant neoclassical approach to macroeconomics and what needs to be done. It really comes down to Paul Davidson's criticism of assuming ergodicity in modeling a non-ergodic environment, which is akin to trying to sledgehammer a round peg into a square hole.

Unlike physical systems, social systems operate in terms of feedback and so the future does not necessarily resemble the past in a predictable way, no matter how sophisticated the statistical analysis — as Keynes pointed out decades ago in his criticism of econometrics. Economies, being people-based hence reflexive, are organic rather than mechanistic, so mechanistic modeling does not apply. Methodological atomism is a dead-end.

Lars P. Syll's Blog

The state of modern macroeconomics – indescribable misery

Lars P. Syll | Professor of Social Studies and Associate professor of Economic History at Malmö University

Macroeconomics is not a pure science. It is a policy science, or better, an aspect of poli sci, to the degree it can be called a science. It is also normative in addition to positive, in that it is concerned with policy issues to the degree that government is involved, which in modern economies is in a huge way. As such it is a part of policy studies in general and need to be approached as such.

Here is a slightly edited response in an email exchange with Roger Erickson yesterday that speaks to this:

Roger: "How do you get people to explore their options? Clarity of purpose first! Then any and all methods become coincidental, rather than ideological. The same message is enshrined today in OBT&E. However, if left to name only, every named effort is always in danger of becoming it's own form of religion - rather than retaining it's function."

In my view, this requires a meta-disciplinary approach to policy studies. The departmental model of the university is in the way of this. It results in the compartmentalism of knowledge, with the result that knowledge workers end up working in closets instead of forums.

This is being realized in the area of consciousness studies, where a new field is emerging and attracting the whole range of scholars from the sciences, humanities and arts. Realization of the need for this unified approach came about for several reasons.

First, consciousness is foundational to experience, hence our awareness of self and world. It is also involved in our personal and social construction of the "world," which is not merely given but structured, for instance, in accordance with the prevailing cultural worldview as colored by subcultural affiliations and personal tendencies.

Secondly, the so-called hard problem of consciousness is reconciling quantity and quality in a comprehensive explanation. How color is perceived as qualitative based on quantifiably measurable differences in wave frequency and interference is a simple instance of this as yet unexplained conundrum. Science is essentially quantitative in its approach to a fundamentally qualitative world. Hence, the question arises as to whether a scientific explanation of consciousness is even possible when it is the field on which quantity and quality meet.

So the two major issues are the nature of consciousness and how it works in relation to a subject as a "person" and the object(s) for the subject as "reality." The problems involved in explaining consciousness are far from resolved but now there are a lot of very smart people working together on potential solutions. 

On thing is quite certain. Consciousness involves complexity and therefore emergence. It is fundamentally non-ergodic even though "rational." "Rational" cannot be equated with "ergodic" unless one is willing to hold also that consciousness is inherently non-rational, which is anti-humanistic. Most scientists are humanists, so that is not palatable to them. This dilemma is quite comparable to the state of most orthodox economists, which they "solve" by positing a rational representative agent.

A similar approach to the current approach to consciousness studies is needed to policy studies, in that many similar issues arise with respect to how consciousness manifests in various societies and the ways in which individuals contribute to manifesting social phenomena, where both consciousness and context are determinative. The challenge lies in capturing the relevant information and using it to its full potential for social optimization. Presently, there are a number of different fields that are concerned with aspects of this but there is little if any integration.

At present, policy is determined by policy wonks well versed in poli sci and history, academic economists using assumption-based models, business people applying business principles to government, and politicians interested in the next election, where the criterion is fundraising ability. These people are mostly working at cross purposes, and they are neither listening to heterodox opinion in their own fields, nor acquiring information and advice from other relevant fields like sociology. Moreover, there is no reconciliation of monetary economics with the rest of policy studies.

Economist Kenneth Boulding is an interesting example. Working from the Forties into the Eighties to develop an integrated approach that also brought in monetary economics, he quickly realized that he was going to make no headway in the economics profession, so he went his own way and co-founded General Systems Theory.

"Systems theory studies the structure and properties of systems in terms of relationships, from which new properties of wholes emerge. It was established as a science by Ludwig von Bertalanffy, Anatol Rapoport, Kenneth E. Boulding, William Ross Ashby, Margaret Mead, Gregory Bateson and others in the 1950's. Systems theory, in its transdisciplinary role, brings together theoretical principles and concepts from ontology, philosophy of science, physics, biology and engineering. Applications are found in numerous fields including geography, sociology, political science, organizational theory, management, psychotherapy and economics amongst others." — Bertalanffy's General Systems Theory by Gregory Mitchell

General Systems Theory is being applied in psychology and consciousness studies, where Boulding is well recognized. How many economists have even heard of him? Interestingly, through Randy has and has written on his work.

So the groundwork has already been done in systems theory and monetary economics and the foundation laid. No the question is how the superstructure gets built on that foundation, considering the powerful interests heavily vested in the status quo and therefore aligned against change, especially holistic change that runs counter to privilege and favoring special interests. Here is where issues of power come in. See, for instance, Michael Perelman, "The Power of Economics and the Economics of Power," and The Power Elite by C. Wright Mills.

I would be pessimistic about change in the face of these obstacles if were not for the vise that is tightening, one face of which is looming resource shortage as the emerging world comes on line and the opposing face is the increasing pace and attendant consequences of global warming. Given the fragility of the financial system due to lack of understanding of monetary economics and rampant corruption, this trend could be greatly exacerbated. Humanity is at make or break it moment, and a whole lot of younger people globally realize this, and see their futures hanging in balance. So there is reason to hope that sense will prevail and humanity will pick up the tools that it has already developed and are available.

Lord Keynes — King on Post Keynesian Approaches to Microfoundations

One of the most important insights King makes is this: the idea of reducing macroeconomics to neoclassical microeconomics is an instance of the strong reductionist fallacy.

Strong reductionism has already failed, not only in biology, but also (more importantly) in the social sciences (King 2012: 226). There are fundamental emergent properties in macroeconomic systems that make their reduction to microeconomics impossible (King 2012: 226).
For example, a lower-order set of parts in a biological system may interact in ways that cannot be inferred by reductionist analysis (King 2012: 51). The principle of “downward causation” consists in the manner by which a “whole” (a system broadly defined) may affect, constrain or influence its parts.
In economics, we see macroeconomic phenomena that are irreducibly social in nature. 

Nor does the strong version of methodological individualism work (King 2012: 60; see also Hodgson 2007). For interactions between individuals may cause “emergent properties” or (that is to say) novel properties not displayed by, or deducible from, the individuals in isolation.

Social Democracy For The 21st Century
King on Post Keynesian Approaches to Microfoundations
Lord Keynes

King gives two reasons for the continuing attraction of the neoclassical microfoundations delusion: physics envy and politics in the age of neoliberalism (King 2012: 229). Reductionist ontological thinking in economics is nothing less than the attempt to reduce macroeconomics to the aggregate of micro behaviour, and the assumption of individual rationality implies a socially rational outcome (King 2012: 229, quoting Denis 2009: 14). In other words, this method produces the delusion that laissez faire results in the best economic outcomes.

Bingo. But nothing new to the readers of this blog.

White House Promotes a Bioeconomy

 The Obama administration is expected to announce a broad plan on Thursday to foster development of the nation’s “bioeconomy,” including the use of renewable resources and biological manufacturing methods.
The National Bioeconomy Blueprint, as the plan is called, discusses a variety of measures and strategies to spur research and development of medical treatments, crops, biofuels and biological manufacturing processes that would replace harsher industrial methods.

Read it at The New York Times | Energy & Environment

White House Promotes a Bioeconomy
By Andrew Pollack

Economics needs to abandon mechanistic models, which came in with the Industrial Revolution, Newtonian physics, and technological innovtion, and get back to biological models, which were characteristic of the Agricultural Age. Think the film, Being There.

There's a down side though, too:

Some groups are also calling for regulation of a field that could be a cornerstone of the bioeconomy, synthetic biology, which involves synthesizing DNA to create novel organisms to perform specific tasks. The blueprint does note that creation and use of novel organisms “carry potential safety and security risks if misapplied.”

Jim Thomas of the ETC Group, an environmental organization, said the whole idea of a bioeconomy was misguided. Using crops and other plants for energy or manufacturing could lead to destruction of forests, particularly in the tropics, and increases in food prices“A biomass economy is the recipe for more land grabs, increased hunger, particularly in the developing world, and putting more control of land and food production in the hand of large agribusiness,” he said.