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Use Your Models, Don't Believe in Them!

I formulated this principle when I was programming mathematical models of financial markets. I noticed that my colleague who generated the models (that I then implemented) was never particularly attached to them. He would run them so long as they were indicating profitable trades, and then abandon them when they stopped. I was also writing Economics for Real People at that time, and grappling with the issue of the relevance of mathematical models in the economic world. Noticing the modelers attitude, one day I asked him, "Would you say that our practice is to use our models, rather than to believe in them?" "Absolutely," he replied. Mary Morgan's book reaches a similar conclusion.

Models: What Are They Good For?

"Writing down a model and manipulating it allows economists to think through in a consistent and logical way how a number of variables might interrelate, and to find solutions to questions about such systems. This habit of making and using models extends the powers of the mind to ask questions and explore the answers in complicated cases." -- Mary Morgan, The World in the Model , p. 258

Hayek abandoned methodological individualism

"In his work on the evolution of social orders, Hayek thus abandons the individualist methodology he proposed in the wartime writings, thereby rectifying the inconsistency that that precept implied for the system of his thought." -- Andy Dennis, "Methodological Individualism and Society: Hayek's Evolving View," in Austrian Economic Perspectives on Individualism and Society , p. 18 That is correct.

Naturalism

Now, no one has a patent or copyright on the use of the word "naturalism," so anything one says about what it means can be contradicted somewhere in the works of people who call themselves adherents of naturalism. Therefore I am just going to describe a typical view that I have seen out there : "Nothing exists except the sort of things described in the theories of physics." (That exact definition of naturalism is not given in the Wikipedia entry, but I know I have seen it stated: if this were an academic paper, I would go hunt down the exact place I saw it, but this is just a blog post.) There is a rather obvious incoherence in this idea: One of the things that is very much not described by the theories of physics is.. the theories of physics. (These theories are about quarks and electrons and photons and forces and so on: they never are about theories themselves , or how theories come to exist, or causal relationships between theories, etc.) Therefore, the theor...

Pygmalion comes alive

I actually had an economist tell me the other day that "utility" is a real "thing" out there in the world, and not just a theoretical construct to help economists understand it! Mary Morgan, in The World in the Model , has some good quotes explaining how this sort of thing happens: "(The triumph of modelling) has created a perspectival change in the way economist view their field: they began by looking at the economic world through the lens of their models and ended by seeing their models in the world" (379). "in the process, those small world models of their science became so familiar to economists that now, when economists look at their small mathematical models they see the real world, and when they look at that big real world they see it is a sequence of their small models" (409). You know how when you spend enough time staring at a white circle on a black page, and then look away, you see an after-image as if it is out there in the re...

If you treat your postulates like hypotheses, you wind up talking nonsense

Physics postulates a world explicable under the category of measurable quantities. Any such quantities it finds will be deemed "physical." The fact that everything physics finds is explicable in terms of the physical is not a hypothesis that physicists are testing, it is an assumption of their science. As such it is ridiculous to point to the work of physicists as "evidence" for a philosophy which one may refer to as "naturalism." It is not a flaw of physics or physicists to make this assumption. What forms any particular science is the set of postulates which it makes about the world, and through which it proceeds to investigate the world as it is seen under those postulates. But it is a mistake to forget that these are postulates and not discoveries. Consider an episode like the discovery of the weak nuclear force. Certain measurable phenomena cannot be explained through any of the other known forces. These phenomena have weird characteristics: certai...

An Observable, Reproducible Supernatural Phenomenon

I heard this phrase on some show that was touting the reality of the "supernatural." It is a bit of silliness that plagues both skeptics of and believers in the supernatural. The silliness consists in this: Anything observable and reproducible will be considered natural . When quantum physicists discovered wave-particle duality or non-local effects, things that had never been considered "natural" before, did they declare these things "supernatural"? No, they just said, "Well, nature is stranger than we thought." I am not trying to comment on the existence of the "supernatural" here: I am just noting that asking for or hoping for scientific evidence of the supernatural is absurd: whether or not any such thing as the supernatural exists, there will never be scientific evidence for it , because every sort of thing for which scientific evidence exists will be incorporated into the "natural."