Tuesday, July 27, 2010

TheLowlyPhilosopher's foolish defense of the Austrians.

It's always amusing to me what bad assumptions people make when interpreting my arguments, and it is particularly funny when somebody who styles themselves a philosopher is so dreadfully incautious.  And sometimes I really enjoy performing a good, vicious fisking.

In a response to my Parable of the ship: why Austrian Economics fails, TheLowlyPhilosopher wrote:
After perusing this blog and in particular reading the entry, The Parable of the Ship: Why Austrian Economics Fails among others, I felt that if there were others who read this blog in general, and in particular the Parable of Ship and (even though this was originally posted over a year ago) it would be beneficial to offer some criticisms of Mike Huben’s general “philosophical belief system” or rather perhaps what he would prefer should be labeled, his “scientific belief system” and in particular his claims concerning science versus philosophy.
What beneficent intentions!  I'm sure we will all be incredibly grateful.  Not.

Although I have taken some undergraduate economics I do not pretend to be an expert in Economics. My education is in Philosophy (primarily epistemology, logic and the philosophy of language). And it is from this philosophical education that I believe that Mr. Huben asserts views that are quite simply mistaken.
Please don't tell us where you learned your philosophy: they might be quite ashamed.

I will proceed with offering criticism of direct quotations that Mr. Huben espoused in the Parable of the Ship blog entry.
Those quotations being:
1) “But the great fault of Austrianism is that it is not scientific. Science is a better way of knowing than philosophy, because scientific theories have to explain close to all the scientifically collected data. For all the faults of conventional economics, it is far closer to a science than Austrianism because it relies heavily on data.”
2) “Since Austrians are innumerate, instead they must rely on their assumptions, which needless to say tend to have a very right wing bias. Science does not work that way. Nor can Austrians really defend their assumptions: no assumption about the real world is totally true which means that there is fallacy in all their logic about the real world.”
3) “This is not a new position: it is basic to science and ought to be basic to philosophy. Hume said it very clearly 260 years ago: Does it contain any abstract reasoning concerning quantity or number? No. Does it contain any experimental reasoning concerning matter of fact and existence? No. Commit it then to the flames: for it can contain nothing but sophistry and illusion.”
4) “When confronted with real-world problems that could have multiple causes, logical verbal models are insufficient. You MUST introduce measurement and mathematics into your models if you want to have any hope of valid answers. Logical verbal models are sufficient to specify possible chains (or networks) of causation, but telling which are significant is a quantitative problem that requires measurement.”
5) “Your faith in philosophy is touching. Science is much better explained anthropologically than by philosophy.”
From 1) “Science is a better way of knowing than philosophy”. That seems a rather strange statement to make. To know something, is to know something that presumably is true. Whether it is known philosophically or scientifically seems irrelevant. If something is known to be true it is true, is it not?
Step number one for the philosopher: start with a howling blunder.  I explain to my students that science is about honesty and validity: if they want truth, they must go to mathematics.

IMHO, science is better than philosophy because it is VALID: it works repeatably in the real world.

Mr. Huben additionally states, “scientific theories have to explain close to all the scientifically collected data.” Notice the use of the qualifier “close to all”. Thus by his own admission Mr. Huben admits that science does not explain all of the collected data. What we call Science at best is no doubt, a very useful conjecture or theory that does not completely explain all the observations.
Ah, the illegitimate demand for perfection.  As opposed to how much philosophy explains?

It's common knowledge, that I present to all my students, that science MODELS reality, and that the models give approximations of the measurements we take.  And often we have pretty good ideas of how close the approximations are and why they are only that close.  If only philosophy was that humble, and if only philosophers had the concept of confidence interval.

Indeed this is what philosophers of science particularly Popper argue; that science is open-ended. Science progresses by falsification. Indeed this is how we have changes in our scientific theory. It is by trying to fit new unexplained and incoherent observations into our present theory and when these observations contradict our present theory we must alter our theory. Kuhn also argued along theses lines when he talked of the Paradigms of science. 
If you take Popper as gospel, you are either showing your ignorance of other philosophy of science or your bias. 

From 2) If we actually take Mr. Huben’s argument to its logical conclusion (Science which by the way was once called “Natural Philosophy”) we must ask how can science be totally true?

After all does not Mr. Huben state that “no assumption about the real world is totally true” Then why are science’s assumptions accepted to be totally true?
Or perhaps Mr. Huben would claim that science is purely empirical, indeed when he quotes David Hume he appears to be arguing this. But perhaps he forgot the Philosopher Immanuel Kant who said
“But though all our knowledge begins with experience, it does not follow that it all arises out of experience. For it may well be that even our empirical knowledge is made up of what we receive through our impressions and of what our own faculty of knowledge supplies from itself…Whether there is any knowledge that is thus independent of experience and even of all impressions of the senses. Such knowledge is entitled a priori. And distinguished from the empirical, which has its sources a posteriori that is in experience.”
From The Critique of Pure Reason
Your belief in a priori knowledge is touchingly naive.  I consider it a philosophical superstition, just as souls are.

The point is that to believe that the only valid knowledge is empirical or rather scientific is quite simplistic as Kant quite well pointed out.
Are you actually so simplistic as to think all philosophers agree with Kant, and that 200+ years of scientific learning about the nature of cognitive experience supports his superstition?

But perhaps Mr.Huben would claim that science has no a priori assumptions, which is patently false. The question is Mr. Huben, how can science prove itself to be true?
You entirely misunderstand the intentions of science, which CERTAINLY are not to "prove itself to be true".  Science is about modeling the world around us as accurately as possible.

Ultimately (induction, science, a posteriori knowledge) and (deduction, logic, a priori knowledge) both are systems that have axioms, principles, postulates, premises that in themselves are not proved to be true but are accepted to be true. Why is science (induction) inherently more conducive to the acquisition of truth than a priori deduction? If you reject a priori deduction (which is admittedly what Austrian economics is built upon) than you must reject the a priori premises that science (induction) is also built upon. But Mr. Huben does not do this. Why the inconsistency?
For the simple reason that truth is not the goal.  But you're to dim to understand that: you project the foolish goals of philosophy upon science.

As the philosopher Wittgenstein said, in his work On Certainty
189. “At some point one has to pass from explanation to mere description.”
192. “To be sure there is justification: but justification comes to an end.”
253 “At the foundation of well-founded belief lies belief that is not founded.”
You don't "believe" in models.  You accept or reject them based on whether they are accurate enough to beat out other models.  Certainty is hardly an objective of science.  Science is heuristic, not certain.

341 “That is to say, the questions that we raise and our doubts depend on the fact that some propositions are exempt from doubt, are as it were like hinges on which those turn.
342 That is to say, it belongs to the logic of our scientific investigations that certain things are in deed not doubted.”
If some things are not doubted in science, it is because evidence justifying doubt would be quickly communicated.

474 “ This game proves its worth. That may be the cause of its being played, but it is not the ground.”
The point of these examples is to refute the notion that science is not based on a priori principles (something that Mr.Huben criticizes Austrian Economics for).
Science is not based on a priori principles for the simple reason that a priori principles are a superstition.

All events have causes is the axiom that science is built upon,
My are you ignorant of science!  One of the basic ideas in quantum mechanics is that causality doesn't work at those scales.

but the axiom is in itself not proved to be true by science. It is accepted as being true (that is it is a necessary supposition for the pursuit of science). But these axioms are no less valid than the axioms that Austrian economics utilizes. Indeed all axioms ultimately are not provable; they are accepted as being true and the rest of the logical framework as it were follow from the acceptance of these axioms.
The basic ideas of science are not axiomatic: they are empirically observed.

I repeat, the criticism of Austrian economics because it is based philosophically on a system built from deductive a priori axioms is not valid in of itself for if it were, the same criticisms of accepting a priori axioms ought to and must be applied to the empirical scientific methods which are also built on a priori axioms. 
Ah, so as a philosopher you use repetition of errors to establish truth.  How curious!

From 3) It seems ironic that Mr. Huben quotes David Hume when the main contribution to modern philosophy that Hume is known for is his argument against the certainty of induction and thus science. Hume famously is known for his argument that just because the Sun has risen for billions of years we cannot be certain that it will rise tomorrow. We cannot derive certainty from scientific observations (induction). Thus Hume rejected the idea that science and induction could give us absolute knowledge only probable knowledge.
And thus Hume understood much more about science than you apparently do.

From 4) “You MUST introduce measurement and mathematics into your models if you want to have any hope of valid answers.”

The criticism is that the Austrian school of economics regards measurement (data and observations) as being overall, not important or very relevant for the study of economics. 

Indeed, the Austrians argue that what we call the economic system is so complex with multitudes of constantly dynamic variables that science cannot hold the independent variables constant to observe the dependent variables. The misconception is that the Austrians hate science or the scientific method. On the contrary they argue that science has great value in things that science can be relevantly applied to such as; Mechanics, Physics, Chemistry etc. 
Ah, so they rule out vast swathes of science such as ecology and evolution, huh?  After all, those are at least as complex as economics, and just as insusceptible of experiment.  Ooooo, I'd love to see the Austrian ecology and Austrian evolution pseudosciences!

But of course, the Austrian contention that dependent variables are always and everywhere concealed by multitudes of constantly dynamic variables fails as badly for economics as it does for ecology. 

It is just not (with very rare exceptions) applicable to the study of economics which is in their view purely deductive. That is, the study economics is similar to the study of logic in that is deductive from first a priori principles. 
Lots of people claim similar nonsense, such as Ayn Rand with "A is A".  Start with vague, waffle-worded "a priori principles" and you can mislead people in all sorts of directions.
The use of mathematical models and statistical techniques etc. the Austrians basically argue, you can call it what you want, but it is not really science, as it is traditionally known. 

Science, the Austrians would argue is repeating the same experiment over and over again with strictly controlled variables and observing the results. (The scientific method)
Observing results is not science: interpreting them is.  Statistics plays a major role in interpreting results in almost all fields of science, and Austrians who say otherwise are just wrong.

This cannot be done with a system as complex as the economy to any high degree of proficiency and certainty.
Now there are some waffle words.  Doesn't matter how good an economic model is: they it's not to a high degree of proficiency and certainty.

But their armchair philosophy must be perfect, even though they refuse to admit that the real world doesn't follow their predictions much.

How does one know that all the variables are being held constant? As Mr.Huben states from 1) “For all the faults of conventional economics, it is far closer to a science than Austrianism because it relies heavily on data.” If the theory that is proposed to explain the “data” cannot be experimentally verified, tested and confirmed by repeating the experiment then would it really be science? 
There are several fields of economics that do look at multiple experiments.  I presume you're too ignorant to know of them.
Mr.Huben argues that you must introduce measurement and mathematics to have valid answers because verbal logic is not sufficient. What about symbolic logic? Are not the symbols and methods of mathematics ultimately translatable into algorithmic logical processes?
Evidently you don't read too well: verbal logic is insufficient because it is generally not quantitative.  Reread my statement 4. 
From 5) and in closing, to state, “your faith in philosophy is touching” displays a childish condescending attitude. Science is a branch of philosophy, indeed what is a PhD in physics anyways? A doctor of philosophy degree in physics. 
And humans are a branch of monkeys, as you obviously show with your poo-flinging understanding of the philosophy of science.  And if you are unfamiliar with the millennia-old traditions of condescension and disdain in philosophy, then you're an ignoramus as well.
The fact is whether Mr. Huben accepts it or not, Philosophy is the mother of all other intellectual pursuits. Everything intellectual is derived from and of Philosophy! 
Evidently you know nothing of cladistics, the science of classification, nor of history, else you wouldn't make such stupid statements.

But even if your contention is correct, that doesn't mean science isn't better than philosophy as a way of knowing.  After all, your mother could be a gibbering idiot and you could be a genius.  But it seems likely to be the other way around in your case, because you make such incredibly bad arguments.

Tuesday, July 06, 2010

Regulation and the Theory of Market and Government Failure

Regulation and the Theory of Market and Government Failure

Nobel Prize winner (economics) Joseph Stiglitz explains that government can improve economic efficiency because real markets don't have the properties of ideal markets. Technical, but not mathematical.

Posted in the Government And Economics and Liberal Criticisms indexes.

Saturday, July 03, 2010

Stateless in Somalia, and Loving It

Stateless in Somalia, and Loving It

Yumi Kim (at Mises Daily) praises the customary clan law in Somalia, because cheap luxuries are available to the elites. No mention of piracy and kidnapping trades, and warlords are downplayed. At best, shows that warlordism may be better than centralized kleptocracy. Libertarians should move to Somalia!

Linked in the Make Or Break Views Of Libertarianism index as an example of self-ridicule.