Obama Not a Socialist

LIFTICVSMAXIMVS · April 20, 2010, 6:48pm

[quote]florelius wrote:
Are you saying that economics is not a form of science? If so, does that meen that it is bogus?[/quote]

It is not a science in the philosophical sense of the word. That is, it cannot be understood through observation but rather logic alone. Economics is first and foremost the general science of human action.

The reason positivism fails in describing economic law is that observation cannot account for how humans will react to new information and or learning (or for that matter what happens when reality is ignored).

Humans action always seeks to bring about greater subjective value with regard to the actor than would have been previously been encountered had there been no action taken in the first place. This is logic not science.

florelius · April 20, 2010, 7:19pm

[quote]LIFTICVSMAXIMVS wrote:

[quote]florelius wrote:
Are you saying that economics is not a form of science? If so, does that meen that it is bogus?[/quote]

It is not a science in the philosophical sense of the word. That is, it cannot be understood through observation but rather logic alone. Economics is first and foremost the general science of human action.

The reason positivism fails in describing economic law is that observation cannot account for how humans will react to new information and or learning (or for that matter what happens when reality is ignored).

Humans action always seeks to bring about greater subjective value with regard to the actor than would have been previously been encountered had there been no action taken in the first place. This is logic not science.[/quote]

If it only can be understood trough logic, its not a science. because its not empirical. If it is like you say it is, then the logic conclusion as far as I can see it, is that there are no point to follow any economic school, be it marxist, austrian or keynesian. because none of them can predict the future. Maybe I missunderstand what you are saying, but if I dont, thats the only logical conclusion.

LIFTICVSMAXIMVS · April 20, 2010, 7:44pm

[quote]florelius wrote:
If it is like you say it is, then the logic conclusion as far as I can see it, is that there are no point to follow any economic school, be it marxist, austrian or keynesian. because none of them can predict the future.[/quote]

We must be careful here. No one can predict the future (i.e., what it is humans will do) but rather we can predict the consequences of what happens when they do act. That is what the logic provides.

For example, what happens when the monetary base is expanded while production remains stagnant or decreases? This is pure logic; no observation needs to be seen in order to predict what will happen.

The crux of the Austrian method is understanding the human action axiom – humans always act to bring about a better state of affairs than would have previously existed had no action occurred in the first place. The subsequent body of knowledge known as economics is logically deduced from this axiom.

florelius · April 20, 2010, 8:16pm

[quote]LIFTICVSMAXIMVS wrote:

[quote]florelius wrote:
If it is like you say it is, then the logic conclusion as far as I can see it, is that there are no point to follow any economic school, be it marxist, austrian or keynesian. because none of them can predict the future.[/quote]

We must be careful here. No one can predict the future (i.e., what it is humans will do) but rather we can predict the consequences of what happens when they do act. That is what the logic provides.

For example, what happens when the monetary base is expanded while production remains stagnant or decreases? This is pure logic; no observation needs to be seen in order to predict what will happen.

The crux of the Austrian method is understanding the human action axiom – humans always act to bring about a better state of affairs than would have previously existed had no action occurred in the first place. The subsequent body of knowledge known as economics is logically deduced from this axiom.[/quote]

I dont believe we can predict the future btw. But we can learn from the past. So an economist should not base his work on logic, but on observations of the past and the present. If he dont check his idees with reality he is a dogmatic economist. And I guess it is truth that we are seeking, not dogma.

LIFTICVSMAXIMVS · April 20, 2010, 8:29pm

[quote]florelius wrote:
I dont believe we can predict the future btw. But we can learn from the past. So an economist should not base his work on logic, but on observations of the past and the present. If he dont check his idees with reality he is a dogmatic economist. And I guess it is truth that we are seeking, not dogma. [/quote]

So what happens when humans learn to behave differently, how does historical data help us with economic understanding in this respect? History has no bearing on the future when it comes to human action otherwise we could never even logically say, as you did above, “we can learn from the past.”

What happens when you learn? You necessarily must change your behavior or otherwise what have you learned?

Economics is NOT about predicting how humans will behave but rather what happens when they do.

We cannot have ANY understanding outside of dogma. That is impossible – even logic itself is dogmatic. The difference is that some of us understand this and others try to escape it only to be led astray by their own folly.

LIFTICVSMAXIMVS · April 20, 2010, 8:32pm

[quote]florelius wrote:
I dont believe we can predict the future btw. But we can learn from the past. So an economist should not base his work on logic, but on observations of the past and the present. If he dont check his idees with reality he is a dogmatic economist. And I guess it is truth that we are seeking, not dogma. [/quote]

Science is also based on logic…so…how does one escape logic?

Logic is at the root of ALL human understanding. Without logic there is no way to judge consistency so any attempts at observation would be fruitless without it.

florelius · April 20, 2010, 8:46pm

ok let me rephrase, he should not base it on logic alone. An teori who tried to explain the economic side of society without being tested against reality wouth be useless even if it sounded logical, because we wouldt know if it worked or not.

I can sit down and create an model for a society based on my logic, but I wouldt have any idea if it would work or not if I did not study in depht how human society has worked trough out our history, even then I wouldt know 100 prosent if it would work or not, but I would have a better idea.

I study history and we can not check our teories like a biolog could do, but we have a methology thats based on empirical principles. I guess its the same thing with economics.

LIFTICVSMAXIMVS · April 20, 2010, 9:40pm

No, economics is a purely logical pursuit. Like mathematics. Experimentation on humans cannot be done because there is always a human element involved.

All that can be done with economics is to analyze history and not predict how humans will behave.

A sound understanding of economics is necessary to understanding any human history.

No one man can model society. A sound understanding of economics tells us why. History proves it.

LIFTICVSMAXIMVS · April 20, 2010, 10:05pm

Ryan_P_McCarter · April 20, 2010, 11:02pm

[quote]LIFTICVSMAXIMVS wrote:This is exactly what I am talking about. You provide a negative assertion without providing an affirmative one to bring anything useful to light. This is just circular argumentation.

The “methodology is flawed”? How so? Please provide a real argument. Also, please provide a method you think is better – haha, I know you’re a positivist, so yes, we can talk about flawed methodology all day long…[/quote]

I am not a positivist, but one need not be a positivist to see plainly that economics is not an a priori investigation. It is an empirical process, and theory, while fine, must at the end of the day be reconciled with the actual economy.

Praxeology? Is that what you are referring to? I readily acknowledge that you are much more well-versed than me in the philosophy of the Austrian school, and probably philosophy in general. However, I rarely criticize the philosophy of the Austrian school. Instead, I criticize it based on the fact that it does not successfully describe the real economy.

I am a physics major, not yet a real physicist.

At the end of the day, the economy is a giant process. One can debate whether or not the present form is natural, but irrespective of that, once started, it functions on its own according to general rules, but these rules are not ones that anyone has set down, or that we have discovered analytically. They are rules that must be investigated like those governing any other phenomenon. This does not of course, preclude the successful prediction of these rules through the use of deductive reasoning, but airtight logic is not a guarantee of truth when dealing with a system which is both very complex and frequently irrational.

florelius · April 20, 2010, 11:40pm

[quote]LIFTICVSMAXIMVS wrote:
No, economics is a purely logical pursuit. Like mathematics. Experimentation on humans cannot be done because there is always a human element involved.

All that can be done with economics is to analyze history and not predict how humans will behave.

A sound understanding of economics is necessary to understanding any human history.

No one man can model society. A sound understanding of economics tells us why. History proves it.[/quote]

that whas my point, that it pointless to create a society in our heads. but by study history of the human society you will gain an understanding of how its works, at that can be usefull if you are in a situasion where you are able to change the society.

LIFTICVSMAXIMVS · April 21, 2010, 1:29am

[quote]Ryan P. McCarter wrote:
I am not a positivist, but one need not be a positivist to see plainly that economics is not an a priori investigation. It is an empirical process, and theory, while fine, must at the end of the day be reconciled with the actual economy.
[/quote]

Economics is a priori synthetically determined knowledge. It is only through logic that it can be understood via the deductive reasoning process. Any attempt at observation in matters of economics is a waste of time. Humans act individually and not in groups.

The “actual economy”, as you refer to it, cannot be measured by scientific means. Why?

Because all measurements are statistical based entirely on historical data and that data will necessarily always change with each measurement – because humans are capable of learning and exploit new technology to bring about more “favorable” results for themselves as it becomes understood.

Keep to studying physics . Your knowledge of the scientific method is useful there but unfortunately will only lead you astray in the social sciences.

Please refer to the book I posted on the topic of positivism (the method of science) in economics and why it fails.

Ryan_P_McCarter · April 21, 2010, 5:29am

It seems to me like you are attempting to completely get rid of empirical observation here. Why? Do you seriously contend that one can learn nothing about the economy from observing it? Even your statement at the there, “humans act individually, not in groups,” in addition to being false (or at least, the wording is misleading in some instances), can only be verified by observing the way that people actually behave, since their behavior is not something independent of the physical world.

Logic and mathematics can be (must be) studied purely analytically, because they are not dependent on the physical universe. Economics, while it can be anticipated and closely approximated in many cases through deductive logic, not only must the axioms used be gleaned from experience, but the results must be verified. Even if your logic is impeccable, if there are additional variables of which you are unaware, or which you had thought to be unimportant (i.e., if your assumptions were incomplete or mistaken), then your results can be incorrect, even if they are perfectly logical. If this were not the case, shouldn’t you also be able to study chemistry in a purely analytical, a priori way (believe me, as someone who strongly prefers theoretical to experimental physics, I really wish this were the case)? If not, why not? Both involve the behavior of large groups of individuals in response to stimuli. I’d venture to say no one would claim that experiments are never necessary in chemistry. But what’s the difference?

[quote]The “actual economy”, as you refer to it, cannot be measured by scientific means. Why?

Because all measurements are statistical based entirely on historical data and that data will necessarily always change with each measurement – because humans are capable of learning and exploit new technology to bring about more “favorable” results for themselves as it becomes understood.[/quote]

If you are hinting at the uncertainty principle, then you know that at large scales its effects become undetectable. By analogy, in the aggregate, any effects from measurement are negligible.

I will look at the book, though I can’t promise it will be soon.

LIFTICVSMAXIMVS · April 21, 2010, 2:22pm

[quote]Ryan P. McCarter wrote:

It seems to me like you are attempting to completely get rid of empirical observation here. Why? Do you seriously contend that one can learn nothing about the economy from observing it? Even your statement at the there, “humans act individually, not in groups,” in addition to being false (or at least, the wording is misleading in some instances), can only be verified by observing the way that people actually behave, since their behavior is not something independent of the physical world.
[/quote]

See? You’re focusing on the wrong thing. Economists do not care about how humans behave (that is ethics) but rather what happens when they behave certain ways.

Observation is useless because it can all be logically determined. No pun intended, but it does not take rocket science to figure out what happens to prices when the monetary base is expanded. You want empiricism? Go back and see if history jibes with the theory.

Also you would never be able to measure group behavior outside of statistical methods. What happens when humans learn and change their behavior? What will the result be?

The scientific method cannot work when it comes to studying something that ultimately comes down to free will. How does a scientist control free will?

Whereas a physicist can measure a natural process that is completely determined by the inanimate physical world economists rely on human actions and they do not follow patterns the way atoms do, for example. Besides, what matters is NOT WHAT they do but what are the ultimate consequences IF they do. That is what makes it logic.

LIFTICVSMAXIMVS · April 21, 2010, 2:31pm

Ryan, you need to read Immanuel Kant, “Critique of Pure Reason” if you want to understand how some knowledge can be gained through intuition and logic alone. In fact, this was Kant’s response to the argument that both you and Hume make about empiricism.

Ultimately, even empirical (scientific) knowledge cannot happen without intuition and logic. All sciences are in fact logic first and foremost.

Ryan_P_McCarter · April 22, 2010, 2:16am

[quote]LIFTICVSMAXIMVS wrote:See? You’re focusing on the wrong thing. Economists do not care about how humans behave (that is ethics) but rather what happens when they behave certain ways.

Observation is useless because it can all be logically determined. No pun intended, but it does not take rocket science to figure out what happens to prices when the monetary base is expanded. You want empiricism? Go back and see if history jibes with the theory.

Also you would never be able to measure group behavior outside of statistical methods. What happens when humans learn and change their behavior? What will the result be?

The scientific method cannot work when it comes to studying something that ultimately comes down to free will. How does a scientist control free will?

Whereas a physicist can measure a natural process that is completely determined by the inanimate physical world economists rely on human actions and they do not follow patterns the way atoms do, for example. Besides, what matters is NOT WHAT they do but what are the ultimate consequences IF they do. That is what makes it logic.[/quote]

I do not understand. For instance, in the first stanza you say that economists “do not care about how humans behave[…] but rather what happens when they behave certain ways.” OK, that’s fine, but the Austrians are not simply content to see what people do (which is obviously empiricism), but they predict that people will behave in a particular way when subjected to certain stimuli, signals, or whatever you wish to call them, and they reach these conclusions through the use of deductive logic. But what happens if they don’t get it right? Do you contend that their body of work is utterly free from error? What do you do when two practitioners disagree with each other? What if an assumption is incorrect? I don’t see any way in which you can completely get away from occasional measurements in economics.

I challenge you to show how “observation is useless,” especially in light of the reams of data generated every day on the economy. How could the great bulk of the world’s economists be utterly wrong in this way? Even Marx doesn’t contend that capitalist economists are as fundamentally wrong (at least in their methods) as you seem to imply here.

Furthermore, the phrase “it can be determined logically,” in order to be true, requires that the subject under investigation behave logically. Since the economy is ultimately people (which I think is pretty much the Austrians’ fundamental axiom, right?), if the economy is to be logical, then it must be composed of logical people. But I don’t need to point out to you the growing body of research illustrating people’s (at least occasional) irrationality in making economic decisions.

The observation that science cannot control free will seems only to underscore my point: how are you confident that literally everything can be determined logically when there is free will? Unless free will is ultimately logical, in which case I see no reason why the aforementioned scientist could not account for it. In short, though I don’t think your argument is without merit, I simply don’t see any way to arrive at your specific conclusions.

Ryan_P_McCarter · April 22, 2010, 2:22am

[quote]LIFTICVSMAXIMVS wrote:
Ryan, you need to read Immanuel Kant, “Critique of Pure Reason” if you want to understand how some knowledge can be gained through intuition and logic alone. In fact, this was Kant’s response to the argument that both you and Hume make about empiricism.

Ultimately, even empirical (scientific) knowledge cannot happen without intuition and logic. All sciences are in fact logic first and foremost.[/quote]

Yes, coincidentally enough, I had planned to begin reading this book over the summer.

florelius · April 22, 2010, 2:59am

it sounds like you are a rasjonalist liftic… and I tought descart was the big rasonalistic thinker not kant.
Kant brought about the the kopernikanske revolution. in simple words: we are an activ reciver of experience. while hume thougt we where a passiv reciver. I know this is a very rough and simplistic version of the differences between hume and kant, but my point is that kant did believe in checking a theory against reality.

I know my english sucks, but I hope you understand me

LIFTICVSMAXIMVS · April 22, 2010, 7:07pm