At 11:47 PM 5/19/98 -0400, Maggie Coleman wrote: >In a message dated 98-05-19 10:26:32 EDT, wojtek writes: > ><< While we are at that, it is my opinion that the discussion on this list > veered too often into murky/technical areas of macroeconomic trends. The > problem with that approach is that it is rather speculative - >> > > >all of economics is speculative. without speculation, economics as a >profession would not exist. forcasting, by definition, is speculation. >maggie coleman [EMAIL PROTECTED] > C'mon Maggie, there is speculation and there is speculation. All science is speculative, that is, it uses abstract models based on simplyifying or 'as if' (ideal types) asumptions. The problem is to build a model that is empirically verifiable, has some predictive validity and, on the top if it, its analytical usefulness outweighs its ideological bias. However, as critics have pointed out (cf. Paul Ormerod, _The Death of Economics_ or Fred Block, _Postindustrial possibilities_), economic theorizing often fails on all those accounts: it is ideology driven, it has little predictive value beacuse its models are incorrect (Ormerod), and it is not empirically verifiable. To my understanding, these problems stem from a fundamental epistemological difference between economics, especially of the variety professed in the US, and empirical sciences. The emprical sciences are ultimately descriptive, that is, their input is empirically observable phenomena and their output is validated by empirically observed phenomena. Much of the economics of the US variety, by contrast, is normative. That is, its input is abstract assumption and its output is validated by internal consistency with those assumptions. Stated differently, that output states how real life behaviour ought to be if it is to be consistent with the assumptions underlying the model. Therefore, the predictive power of this kind of theorizing is not that of the emprical science (i.e. based on discovering pre-existing patterns), but that of engineering or managing (i.e. based on physical imposing a predicatble pattern on pre-existing material). Stated dsifferently, much of economics is 'true' in the same way as a bridge or a building is 'true' - by forcing the physical material into a pre-arranged form. The Frankfurt School (esp. Max Horkheimer) called this kind of theorizing 'herrenwissenschaft' or 'master science' in a clear analogy to the Nazi concpet of 'herrenvolk' or 'master race.' The idea was to call attention to science as instruments of domination. Another idea that comes to mind is this kind of speculative though being a Procrustean bed - the social reality is being forced to fit the speculative abstraction and whatever does not fit is simply cut off. That, in my opinion, was the essence of Marx's crtique of capitalism - that it was metling all that was solid into the air (not a bad thing when the pre-modern institutions are concerned), but then re-building that according to a simplistic blue print of commodity exchange. Regards, Wojtek Sokolowski
