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Weekend reflections

September 15th, 2006

Weekend Reflections is on again. Please comment on any topic of interest (civilised discussion and no coarse language, please). Feel free to put in contributions more lengthy than for the Monday Message Board or standard comments. (Polite) meta-comments on the tipping competition in the previous post are also invited.

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  1. September 15th, 2006 at 20:48 | #1

    Tonight I am on the home PC using IE7.0 so I thought I’d add a quick comment. Lately Johns anti-spam software blocks most of my contributions to this site when I use my latest web browser (Nokia native browser) so I don’t comment here so much lately. Sorry if anybody feels like I failed to follow up on coversation points but after the system kept loosing my comments I became too discouraged to keep at it. Maybe when I have more time I’ll try and find a more permanent solution.

  2. September 15th, 2006 at 22:34 | #2

    About the tipping…

    A isn’t included in what the USA has in mind. Think Guantanamo Bay or the British Sovereign Base area in Cyprus. Of course, you can define the problem out of existence with words like “sovereign” – the USA won’t have troops in the country any more than they had in Panama when they held the Canal Zone.

    B, C, and D are all subject to distortion. In the worst case, if you kill or expel enough people these criteria come right anyway. Or you can start interning them or putting them in reservation areas and then not counting them.

    That last leads onto another issue for “democracy” – who gets counted. It would be quite easy effectively to deny citizenship to those who didn’t accept the situation (hey, the USA did that in the post-1865 Reconstruction). It’s easy to bar parties and limit the choice and still get called “democratic” – you have to do a lot more strict defining here.

    As well, on the principle that “democracies don’t go to war with each other”, it’s quite easy to segue from that to the concept that any system that is not sufficiently pro-American is ipso facto not (or not yet) democratic enough – think Palestinian elections. If only people were still familiar enough with history they would see the same general pattern in the history of Athens, Macedonia and Rome (they really did mean well when they started down the slippery slope of liberating city states).

    That also brings in the idea of getting people to vote over and over until they get it right – sorry, “the people are ready”. That’s actually one of the three fundamental incompletenesses of democracy as such; it has been practised in many times and places, e.g. by the EU arranging for Irish and Danish referenda, and it’s the approach favoured by Australian republicans.

    Without going into detail, the three incompletenesses are: democracy does not make or create right, it merely has the potential to transmit and express it; it is susceptible to editing and agenda control, analogous to cycles of random drawing and systematic discards to generate any hand of cards; and, democracy cannot itself define “we, the people” – even if any such meaningful entity exists – without being circular.

    It follows that any true democracy can only be part of a larger and more complete system, or risk being defective in the same sense as a car with wheels that aren’t fastened on. It might go a long way without the wheels falling off, but they are still loose.

  3. September 15th, 2006 at 22:41 | #3

    Oh, and also, our particular modern fashion is for indirect or representative democracy. That sort is also subject to agency costs, e.g. an internal dynamic in favour of enlarging the franchise (“good”) or increasing the citizenship through immigration (“bad”, and analogous to diluting equity). I put both cases in to illustrate that the internal dynamic has nothing whatever to do with what is actually wise or ethical either way.

    Not that direct democracy is free of such distortions – Athens restricted who could become citizens, thus increasing the size of the slices at the expense of the size of the cake which, unfortunately for the polity, affected the viability of an Athens beset by enemies.

  4. Rosinante Quixote
    September 16th, 2006 at 00:17 | #4

    The Constitution of Australia is pretty clear on a couple of very basic points about the Senate:
    1.it is intended as a ‘house of review’; to provide a check on government legislation, and
    2.it is intended to provide the states with equal levels of representation to allow for ‘state review’ of government legislation.

    The Senate is a separate house because the constitution recognises that its function is NOT to operate as a part of the government.

    In contemporary practice, where the government party or coalition has majority control of the Senate, that chamber does not function in a manner intended by the Constitution of Australia.

    This situation could easily be remedied, but only in theory. The simple amendment required to achieve it would never receive the required support from self-interested political parties and a largely apathetic electorate.

    The answer, of course, is to disqualify members of political parties, or persons directly employed by political parties, from standing for Senate representation.

    Remove political parties from the Senate.

    This would ensure that the Senate operated in line with the two principles stated above. It would ensure that “The Senator for Tasmania� was indeed the Senator for Tasmania and not a Tasmanian Senator for the Government.

    Why should this be so hard to achieve?

  5. brian
    September 16th, 2006 at 00:41 | #5

    I think the idea of getting the political parties to “ban” themselves from the Senate is..well ..”quixotic”to say the least.
    Actually the constitution doesn’t mention political parties(It doesn’t mention the P.M either !!)
    A senate of independents would be impossible….parties would simply form around issues,but be less predicitable than those we have now !
    Yes..quixotic is the word !!

  6. September 16th, 2006 at 03:14 | #6

    On Catallaxy I have posted on the dishonesty (or ignorance) of the Post-Autistic Economics network http://catallaxyfiles.com/?p=2107

    They are highly critical of positivism and mathematical formalism which raises some issues in epistemology and methodology that we have canvassed before. Specifically, JQ has suggested that Lakatos has advanced the field beyond the point that was reached by Popper. I don’t agree with that because I think that the efforts of Latsis, Blaug and others to make something out of Latatos and his methodology of scientific research programs simply produced nothing of value.

    I would like to ask John some specific questions to clarifiy this situation.
    1. What do you think was the problem with Popper’s ideas that Lakatos corrected?
    2. What texts provide the basis for that opinion?
    3. Do you make conscious use of ideas from Lakatos in your research and teaching?
    4. Do you encourage your students to read Lakatos (and if so, what?)

  7. September 16th, 2006 at 09:15 | #7

    Spring has sprung but is it official yet?

    Has anybody heard someone in an official position say or be quoted in the meeja as describing their state or region as a “tinderbox” yet?

    The closest sighting I have to date is a bushfire brigade person on the radio describing the bush as “tinder dry”.

    Not quite there yet. Any advance?

  8. gordon
    September 16th, 2006 at 09:46 | #8

    USA-watchers may know that there is a debate on there at the moment about how progressive the US tax system is. Bushites are arguing that the Bush tax cuts at the top actually render the system more progressive! Economist’s View has a good post on the issue here, with a new review of the data by Piketty and Saez (well known for their work on inequality) and revealing graphs. P&S conclude by saying: “These large reductions in tax progressivity since the 1960s took place primarily during two periods: the Reagan presidency in the 1980s and the Bush administration in the early 2000s. The only significant increase in tax progressivity since 1960 took place in the early 1990s during the first Clinton administration.”

  9. Tony D
    September 16th, 2006 at 14:15 | #9

    China Meiville fans may (or may not) want to check out this:


    What are people thoughts on SF authors writing non fiction political analysis?

  10. jquiggin
    September 16th, 2006 at 15:54 | #10

    Hi Rafe,

    I encourage students to read Blaug. I admit that he’s not as good as Lakatos, but he gives a reasonably useful application of the Lakatosian approach to economics.

    On Popper, I think the big problem is that his falsificationist approach, taken literally, suggests that a research program can be rejected on the basis of a single “crucial experiment”. As Popper himself recognised, this isn’t true and Lakatos’ treatment of scientific research programs seems to me to be the best available resolution. I find Lakatos’ ideas useful in my own work.

  11. September 16th, 2006 at 16:57 | #11

    John, what texts have you used to form your opinion of Popper’s views? Were they written by Popper or by people like Lakatos who confused the issues and gave rise to three decades of wasted effort in the philosophy of economics?

    Specifically, where did you read about Popper’s “falsificationist approach”?

    It looks as though you don’t understand what you are talking about here!

  12. jquiggin
    September 16th, 2006 at 17:10 | #12

    Well, I read Conjectures and Refutations, and I guess was misled by the section on “Science as Falsification”, into thinking that Popper put a lot of weight on falsification in science. Unended Quest also seemed to me to support this interpretation. Feel free to set me straight.

  13. jquiggin
    September 16th, 2006 at 17:18 | #13

    After you’ve corrected me, you might want to straighten out the Stanford Encyclopedia of Philosophy which also seems to think that falsifiability is the critical idea in Popper’s demarcation between science and non-science. SEP says

    Popper has always drawn a clear distinction between the logic of falsifiability and its applied methodology. The logic of his theory is utterly simple: if a single ferrous metal is unaffected by a magnetic field it cannot be the case that all ferrous metals are affected by magnetic fields. Logically speaking, a scientific law is conclusively falsifiable although it is not conclusively verifiable. Methodologically, however, the situation is much more complex: no observation is free from the possibility of error – consequently we may question whether our experimental result was what it appeared to be.

    which matches almost exactly what I wrote above.

  14. steve munn
    September 16th, 2006 at 17:42 | #14

    There is a very well written, small (170 pages) book called “What is this thing called Science?” by AF Chalmers that was a recommended text when I did a unit in Philosophy of Science in the early 1990s. Anyone with a serious interest in this topic should give it a read.

    It is worth noting that almost no Philosophers of Science today consider themselves a Popperian.

  15. September 16th, 2006 at 19:11 | #15

    Thanks Steve, this is a review of the Chalmers book, which is excellent but not quite on the mark in some respects.


    The core of Popper’s approach is criticism, and attempted falsification is a part of that critical method.

    The question is, what is wrong with Popper’s views that was identified and corrected by Lakatos?

    Both John and Steve are invited to reply.

  16. taust
    September 16th, 2006 at 22:22 | #16

    is the Popper critirion that science postulates are capable of fasification?
    A percieved falsification is then subject to criticism by experiment and/or theorectically before either being explained or leading to new postulates (theories).

  17. jquiggin
    September 17th, 2006 at 06:23 | #17

    So, Rafe, what was the point of your earlier comment suggesting that I didn’t know what I was talking about in referring to Popper’s falsificationism? You now appear to endorse the view that Popper relied crucially on falsification.

    As a general point, if you’re going to say things like “you don’t know what you’re talking about”, you should be prepared either to back them up or retract them . Since you clearly can’t back it up, please retract.

    I’ll restate my point about Popper and Lakatos. If you accept that a single apparent falsification of a hypothesis can’t in general be conclusive, you’re left with the problem of finding an operational basis for critical assessment of theories. The best available answer to this problem, in my view, is that given by Lakatos’ theory of Scientific Research Programs. If you think there’s a better answer point to it and say why you think it’s better. So far, all you’ve offered is unsupported abuse and, apparently, a claim that the field stopped with Popper.

  18. September 17th, 2006 at 08:15 | #18

    In fairness to people who don’t understand the role of falsification in the bigger picture of Popper’s methodology, it is helpful to talk about critical rationalism rather than Popperism and to regard Popper as merely a leading contributor rather than the Omega point of the project.

    If you are serious about this you need to go to Larry Boland or Jack Birner who are versed in both critical rationalism and economics. That will save you from the dead end that resulted from the Lakatosian twist on the critical rationalism project.

    For Boland http://www.sfu.ca/~boland/

    For Jack Birner on Popper’s situational analysis as applied to the human sciences.

    The critical rationalist approach to theory assessment is to use every available form of criticism to see if the theory stands up. Five (at least) can be identified:
    1. Does it solve the problem?
    2. Logic – is it internally consistent?
    3. Other theories – is it consistent with other well-tested theories?
    4. Evidence – does it stand up to field tests?
    5. The metaphysics – does it meet the philosophical or metaphysical criteria that we have set for our reseach program?

    5 is where you meet Popper’s theory of metaphysical research programs which was the inspiration for Lakatos on programs. The difference between Popper and Lakatos (who was also inspired by Kuhn on paradigms) is for critical rationalists you are supposed to be critical towards the core of the program instead of protecting it from criticism a la Lakatos and Kuhn.

  19. jquiggin
    September 17th, 2006 at 08:48 | #19

    Rafe, I’ more confused than ever now. You link to a post of your own, where you say

    Koertge reverts to Lakatos language, suggesting that the RP is the hard core of Popper’s progarm. “The positive heuristic is provided by his metaphysical theory of man as an evolving rational problem-solving animal. The program would then be evaluated in terms of its explanatory success in areas such as economics, anthropology and cognitive psychology”. Right on!

    I agree, but how does this square with your general insistence that only an ignoramus would pay any attention to Lakatos?

    I’ve read Boland and not got much out of him, I’m afraid.

  20. September 17th, 2006 at 09:36 | #20

    Her use of Lakatos language did not add to the argument. It was probably a concession to the majority opinion in the field to make her views more acceptable for pr purposes.

    Don’t be afraid John, if you got “not much” out of Boland I suppose this means that you want to stick with the confused and misleading fluff of Lakatos (that is to say, with the majority) rather than reconsider your views in the light of serious arguments.

    It is all very well to read widely but at some point you have to come to grips with the complexities and not just coast along with the cliches and thought substitutes of received opinion about critical rationalism, Popper’s views (and the Austrians).

    Just to be specific about Lakatosian hard cores, do you accept that it is good practice to protect the core of the program from criticism?

  21. jquiggin
    September 17th, 2006 at 09:43 | #21

    “Her use of Lakatos language did not add to the argument. It was probably a concession to the majority opinion in the field to make her views more acceptable for pr purposes.”

    Maybe I misread the post, Rafe. It reads as if the endorsement “Right on!” came from you.

  22. Smiley
    September 17th, 2006 at 11:51 | #22

    I promised JQ that I wouldn’t make any comments on his site for a while, but I just couldn’t let this one go. I’m not sure if there has been much discussion about this before, but, claims that elections have (definitely) not been rigged, (they may have), in the recent past, I think should now be put to rest.

    It seems that electronic voting is as susceptible (if not more-so, because of the “automation” factor) to tampering, than hand written ballots. It must be a lot more difficult to fill in 10k ballots by hand.


    This has been coming for years. It’s a pity more people didn’t pick up on it earlier. A simple paper (audit) trail, as is implemented for financial transactions could have ensured the integrity of the system. But I guess when integrity is the last thing on your mind, you tend to forget about it.

    I have a feeling, that if electronic voting is ever going to work, then it should be implemented by impartial organisations, like the AEC. Private interference in what is at the core of our democratic system seems mind boggling.

    I will refrain from replying to any comments on this (I tend to make funny comments when people get angry, and spend the rest of the day giggling about them). I do have to work to make a living.


  23. September 17th, 2006 at 23:40 | #23

    Good point John! You wrote “Maybe I misread the post, Rafe. It reads as if the endorsement “Right on!â€? came from you.”

    Yes, that is correct, I endorsed her suggestion about the way to go forward (what Lakatos called the positive heuristic).

    “The positive heuristic is provided by his [Popper's] metaphysical theory of man as an evolving rational problem-solving animal. The program would then be evaluated in terms of its explanatory success in areas such as economics, anthropology and cognitive psychology�.

    The positive program is essentially the “action frame of reference” that Talcott Parsons re-invented, alongside Mises and his cohorts (in the red corner) and Popper et al (in the blue corner). Not sure if the colours make sense, maybe they should be the other way around.

    The program that follows from the action frame of reference:
    With the focus on human action in real situations and real time the way is clear to revive the grand tradition of political economy in the great humanist spirit that “nothing human is foreign to me�. This will not make any difference for people who are already doing good economics (like the man who was surprised to learn that he had been speaking prose all his life) but it migiht help others to transform their practice to a greater or lesser extent.

    There will be more awareness of the human potential for learning, critical thinking and creativity, not only as they are manifested in the feats of scientific, entrepreneurial and artistic pioneers but also in the ingenuity that all people can display as they explore the opportunities that are available, mediated by the values and ambitions that they have internalised and the incentives they are offered. There will be a renewed focus on values and the way that these are transmitted from generation to generation by influences sucy as religious instruction, the full range of high and low culture including sport and games, child-raising practices and children’s stories [footnote Cowen and also McClelland].

    There will be more awareness of developments in other academic fields which support or undermine the vitality and rationality of students who are exposed to them. Examples of debilitating influences are (a) the various forms of philosophical positivism, including logical empiricicism, which have disabled the ability of students to understand the factors which promote the growth of knowledge, even in the natural sciences, (b) developments in the study of literature which deny the validity and efficacy of human agency and moral judgement [Freadman and Miller], (c) the deep strain of irrationalism in much of the mainstream of American literature [Yvor Winters, In Defense of Reason].

    Turning to marcoeconomic analysis, in this framework macroeconomic indicators such as the level of unemployment, inflation and interest rates will be seen as (a) the outcome of decisions made by individuals , including boards and committees, and (b) elements of the situation that have to be taken into account when people make decisoins about buying and selling. They will not be perceived like the gears of a gigantic machine that act directly on each other independent of the actions and decisions of people.

  24. jquiggin
    September 18th, 2006 at 06:44 | #24

    “Turning to marcoeconomic analysis, in this framework macroeconomic indicators such as the level of unemployment, inflation and interest rates will be seen as (a) the outcome of decisions made by individuals , including boards and committees, and (b) elements of the situation that have to be taken into account when people make decisoins about buying and selling. They will not be perceived like the gears of a gigantic machine that act directly on each other independent of the actions and decisions of people.”

    Rafe, you don’t need the future tense here. Extensive work on the microfoundations of macro has been going on within mainstream economics since I was a child, and exactly the same point was made, even earlier, by Joan Robinson and other critics of “hydraulic Keynesianism” in the 1950s. The whole debate about the “consenting adults” view of the trade deficit is an illustration – both sides focused on the actions and beliefs of individuals and institutions.

  25. September 18th, 2006 at 07:51 | #25

    So how come people were so impressed with the General Theory of Keynes? Why did folk like Samuelson have to waste their careers, and those of the people who follolwed them?

  26. jquiggin
    September 18th, 2006 at 09:09 | #26

    The General Theory did not represent the macroeconomy in terms of “the gears of a gigantic machine that act directly on each other independent of the actions and decisions of people.”

    To the extent that it has any validity, the criticism you make is applicable to the Keynesian-neoclassical synthesis as it emerged in the 1950s, which tended to downplay the focus on individual decisions that was strong in Keynes and overstate the mechanical aspects.

    But this is old, old stuff, as anyone who actually does economics knows.

  27. econwit
    September 18th, 2006 at 10:45 | #27

    “I tend to make funny comments when people get angry, and spend the rest of the day giggling about them”

    Is that the logic behind the name “Smiley”?

  28. Uncle Milton
    September 18th, 2006 at 11:12 | #28

    Rafe, your statement about Samuelson wasting his career is preposterous. He made immense contributions to every field of economics, including the microeconomic foundations of macroeconomics. Much of this microfoundations work was done as early as the 1950s. This was why he was one of the first economists to win the Nobel Prize.

    Have you read any of his work besides his textbook for first year undegraduates?

  29. wilful
    September 18th, 2006 at 11:12 | #29

    Rafe, why are you so rude? From my limited knowledge of the subject area, it appears that you have assertively demonstrated your ignorance in front of the unfailingly courteous Professor.

  30. derrida derider
    September 18th, 2006 at 14:35 | #30

    What wilful said – rafe needs to do a bit of (actually lots of) reading if he wants to be taken seriously.

  31. sdfc
    September 18th, 2006 at 14:53 | #31

    Maybe he could start with the General Theory which he quite obviously he hasn’t read.

  32. Ernestine Gross
    September 18th, 2006 at 16:08 | #32

    In addition (without wishing to contradict in any way) JQ’s, Uncle Milton’s, willful’s, derrida derider’s and sdfc’s advice, it might also be helpful if ‘The Theory of Value’ would be put on the reading list. The introduction to this book makes it clear that the theory does not deal with the price formation process or with Industrial Organisation. This information might save volumes of superfluous verbal criticisms of the Arrow-Debreu model and leave time for the study of subsequent Walrasian and non-Walrasian general equilibrium models. Eventually, there may be time for ‘critical thinking’. For example, one could start off with: What are the economic questions to which general equilibrium models may provide relevant insights and what are the questions for which they are useless. And, another example: Why is it that some people criticise ‘axiomatic theory’ without realising that none of the models in question treat the institution of a market axiomatic? Next question: What went wrong during the past 20 years or so? … Why is it that interdisciplinary work (eg sociology and economics), published in say, Econometrica, is not known by those who call for ‘interdisciplinary work’?

    I might be missing something important in my education because I can’t see how interdisciplinary work is possible with a methodology that generates ‘ism-words’.

  33. September 18th, 2006 at 17:49 | #33

    Persisting with the Popper/Lakatos thread, I am still waiting for John to advise how Lakatos improved on Popper, and where Popper was actually wrong.

    Also (repeating) Just to be specific about Lakatosian hard cores, do you accept that it is good practice to protect the core of the program from criticism?

    It is probablyl worth repeating something that I have said on Catallaxy from time to time, scientists who work in a critical and imaginative way probably only need to read Popper if they have been led astray by other philosophers such a the logical empiricists, or Kuhn, or Lakatos or Blaug.

  34. September 18th, 2006 at 18:05 | #34

    Uncle Milt, what is to be made of Samuelson, the man who wrote year after year, up to the fall of the wall, that the Soviet economy was strong and overhauling the US? The man is a laughing stock! So he got a Nobel, so did Yasser Arafat, for Peace!!!

    His work on the foundations of preference theory which probably earned the prize was shredded by Larry Boland’s student, Stanley Wong.


    “The major thesis of this volume is that the program of providing a “revealed preferenceâ€? alternative to standard neoclassical utility theory turned out to be a failure; but more curiously, Paul Samuelson persisted in portraying the denouement as though it were a triumph, and somehow, the postwar profession bought it. It was a failure because the weak axiom of revealed preference was either a tautology if defined at a point in time (no one would buy the same basket twice) or else entirely toothless if time is allowed to pass (violations could be discounted as changes in tastes, other things not held constant, etc); its supposed operationalist credentials were therefore baseless1; but furthermore, it was a failure because Samuelson simply pretended he didn’t mean what he had written in 1938 when it was pointed out to him that the weak axiom was not sufficient to derive the so-called Law of Demand. Far from denying the relevance of utility, by 1950 Samuelson was suggesting that he had hopped on the utility bandwagon from the very start of his career. Hendrik Houthakker, who first demonstrated that the required Strong Axiom was isomorphic to standard utility theory, noticed the change of heart: “The stone the builder had rejected in 1938 seemed to have become a cornerstone in 1950â€? (in Brown & Solow, 1983, p.63).”

    “Why did the profession let him get away with it? And, more telling, why have they simply ignored the devastating case that the revealed preference program was and is empty of content provided by Wong? First, I think it is fair to suggest that Wong’s arguments have never been seriously addressed or criticized by adherents to the neoclassical orthodoxy. Instead, one simply is tendered all manner of hand-waving concerning what the author in question believes Samuelson ‘should have meant’ when he postulated the existence of revealed preferences. One observes this, for instance, in (Houthakker in Brown & Solow, 1983; Mas-Collel in Feiwel, 1982). Of course, all this third-party speculation could have been settled quite easily by recourse to the principal protagonist himself; but here is where the plot thickens. Paul Samuelson seems to be incapable of publicly admitting any errors or disappointments other than what he deems to be minor slips later clarified by others. Wong had already noticed his disturbing habit of trying to paint any criticism of himself as criticism of the method of the natural sciences tout court, surely a case of mistaken identity. One wonders where the supposed semantic clarity and syntactic discipline induced by mathematical expression has gone in this instance. The main piece of evidence about his unwillingness to confront the issue can be found in (Samuelson, 1998). First he throws up a veritable historical fog around the issue by situating the supposed origin of the doctrine in the natural sciences, namely, “a marriage between Haberler-Konus index number theory and Gibbs finite-difference formulations of classical phenomenological thermodynamics of the 1870sâ€? (p.1380). Then he suggests that the doctrine of revealed preference was ‘played down’ in his book on Foundations of Economic Analysis because he had already suspected before the fact that his weak axiom was insufficient to guarantee transitivity of comparisons (something nowhere hinted at in his published work). Then Samuelson simply repeats his version of events first retailed in 1950″.

  35. Uncle Milton
    September 18th, 2006 at 18:56 | #35

    Rafe, I admit, I’ve never heard of Larry Boland or Stanley Wong. But I have heard of Philip Mirowski, from whom you have cutted and pasted. Mirowski has long thought that the deductive methods of the natural sciences, especially physics, have no place in economics and he blames Samuelson for importing them into economics. Mirowski doesn’t even think that equilibrium is a proper concept in economics. This is an unorthodox view but one that can be reasonbably argued. Unfortunately, Mirowski thinks that his dissenting voice has been suppressed by the economics establishment and he gives a very good impression of a man with an axe to grind.

    So if I were you I wouldn’t be taking anything he says about Samuelson at face value.

    As for what Samuelson said about the Soviet economy, presumably this was in his text book, which incidentally was co-authored from the early 70s on. Did he and/or his co authors really say, “up to the fall of the wall”, that is, the 1989 edition, that the Soviet economy was strong and overhauling the US? I find this hard to believe, as Gorbachev himself was saying at that time that the Soviet economy was in big trouble.

    Still, if you can provide a quote from a late 80s edition of his textbook I’ll happily concede this point. But I don’t think you will. I reckon you read Samuelson’s textbook sometime in the 1960s, when he may well have said it, or perhaps he just quoted Kruschev’s boast that “we will bury you”, meaning that the Soviet economy would overhaul the US’s, a boast which the US Government took very seriously at the time, because it was quite plausible. I think you’ve just assumed that Samuelson would keep saying this up to the end of the 1980s, and I reckon you’re wrong.

  36. September 18th, 2006 at 20:15 | #36

    Hello Uncle Milton, I have Samuelson’s folly reported often enough, although I can’t recall which editions I actually read myself.

    As late as 1989, Samuelson claimed that “The Soviet economy is proof that, contrary to what many skeptics had earlier believed, a socialist command economy can function and even thrive.�

    Quoted from Samuelson and Nordhaus, 13th edition, 1989.

    I suppose rather few people on this list would know about Boland and Wong, just reflect on your good fortune that I am prepared to come over here and tell you about these things!:)

  37. Smiley
    September 18th, 2006 at 21:07 | #37

    Is that the logic behind the name “Smiley�?

    No. Just a nickname someone once gave me… Not generally in use these days.

  38. Uncle Milton
    September 18th, 2006 at 21:33 | #38

    Rafe, in which case, as I said I would, I concede that point. Samuelson made an error of judgment in writing that in his textbook.

    However, an error in an introductory textbook does not invalidate his life’s work, which was expanding the frontiers of economics in many directions. Or are we to conclude that his work demonstrating the benefits of free trade is invalid because of what he said about the Soviet Union?

    By the way, if Samuelson’s economics Nobel has no credibility because Arafat won one for peace, that must mean that Hayek’s economics Nobel also has no credibility. And also the many Nobels awarded to the economists of the Chicago school, all of which were for variations on the idea that free markets, unfettered by government interference, are a good thing.

  39. September 19th, 2006 at 07:39 | #39

    Each Nobel Prize needs to be judged on its merits, as does each argument advanced by Paul Samuelson.

    So he supported free trade! Was that original? Tell that to the Manchester school and the Austrians 150 or 100 years ago. The important thing to explore is the reasons for supporting free trade and the policy proposals that he offered to expand free trade.

    His record on the Soviet economy is just the clearly visible tip of the iceberg of error in his theoretical approach – think of the Samuelson trifecta, Keynesiansm (a joy to be alive!!), mathematical economics and the all-intrusive, big government welfare state.

    Go easy on the “unfettered by government interference” rhetoric, there is a role for government in maintaining a framework of rules and there is an element of simplistic thinking in the suggestion that free traders see no function for government.

  40. jquiggin
    September 19th, 2006 at 08:03 | #40

    Rafe, if you want questions answered you should learn to ask them more politely. However, since this seems to be a big concern of yours, let’s walk through it

    1. We’re all (at least Popper, Lakatos and me) agreed that a single experimental falsification of predictions does not normally suffice to refute a body of work consisting of fundamental theories, observational theories, auxiliary hypotheses and so on. Lakatos calls such a body of work a Scientific Research Program, and you appear to think this language is OK

    2. If you’re not willing to junk the entire program, and you are willing to respond to empirical evidence, there must be some hypotheses that you’re willing to drop or modify fairly readily and others that you are not.

    3. Lakatos calls the hypotheses that aren’t readily abandoned the core. If you don’t like this terminology feel free to spell it out and say “the hypotheses that will be less readily modified or abandoned in the face of falsification of predictions”.

    So your question appears to be “In a progressive SRP, ought the hypotheses that will be less readily modified or abandoned in the face of falsification of predictions to be readily modified or abandoned in the face of falsification of predictions”, which is a contradiction in terms.

  41. September 19th, 2006 at 13:30 | #41

    John I do not mean to be rude, as most people know I am the very soul of conviviality and civility.

    However I really want to know what error in Popper you think has been corrected by Lakatos, or what it is about the ideas advanced by Lakatos that represent an advance.

    In fact the program initiated by Latsis and Blaug and others such as Wade Hands to upgrade economics by the introduction of Lakatos has produced a mass of papers but zero progress that can be detected.

    If you are looking for inspiration from the direction of the philosophy of science in general and Popper in particular, then you need to look at situational analysis. This represents a convergence with the robust elements of the Austrian method and the “action frame of reference” that Talcott Parsons re-invented in The Structure of Social Action and then abandoned under the influence of general systems theory at Harvard.

    I also would like to know why you think the Austrian program has collapsed when you can see it at work at Geo Mason Uni and practical projects like the fieldwork they are doing in Africa.

  42. jquiggin
    September 19th, 2006 at 18:01 | #42

    Rafe, I’ve answered your question several times already. I’ve concluded that the hard core of your program is the hypothesis that you, and only you, know everything worth knowing on this topic. Not surprisingly, the result is a degenerating SRP.

  43. James Farrell
    September 20th, 2006 at 00:54 | #43

    “…Samuelson, the man who wrote year after year, up to the fall of the wall, that the Soviet economy was strong and overhauling the US?”

    Fiddlesticks. What Samuelson did, year after year, was to explain that long run estimates of US growth and in particular Soviet growth were so uncertain that a very wide range of outcomes could occur. Overhauling the US was one possibility. In the 1967 edition I have on my shelf he says

    Over the whole period since World War II, the percentage growth rate of the Soviet Economy almost certainly exceeded the American growth rate. But in the 1960s the Soviet growth rate may well have fallen behind the American (and it has certainly fallen below those of West Germany, Japan, Italy and France). Furthermore many experts believe that it is easier initially for an economy that starts frrom a lower level of productiveity to achieve a high percentage growth rate…the unused opportunities for imitating Western technology are likely to diminish. Hence it may be unwise to extrapolate past growth rates in the Soviet Union into the distant future.

    I don’t know whether Samuelson was still drawing on the best available information in 1989, but the claim that Soviet growth exceeded US growth in the 1960s accords with the figures (4.9% versus 3.8) in Kornai’s magnum opus The Soshalist System, which is not exactly an apologia for soshalist planning.

    The point is, as both Samuelson and Kornai know perfectly well, that a high GDP growth in itself means nothing if high and indeed increasing investment rates are necessary to sustain it. Far less does high growth imply that people are satisfied either as consumers or as political beings.

    I defy any fair minded person to read Samuelson’s chapter on alternative economic systems and find there an endorsement of central planning. Certainly the Soviet censors didn’t think so, since they removed
    the entire section on growth from the Russian edition.

    This is your daffiest witch hunt so far, Rafe. By the way, what do you see as the connection between the theory of revealed preference and Samuelson’s policy recommendations?

  44. September 20th, 2006 at 16:06 | #44

    John, I can’t see where you have explained how Lakatos corrected some alleged error in Popper’s critical method. Lakatos knew nothing about economics so he could not help directly and it is not apparent that his followers have been any more helpful. Blaug in the washup after the second Greek Island conferenc (funded by Latsis senior) mourned that there were more papers that were critical of the Lakatos approach than papers that actually used it. He also noted in an aside that he had come around to the the Austrian way of thinking about the nature of competition, rather interesting in view of his previous delight in retailing Samuelson’s abuse of the Austrians.

    I expect that the Austrian program, though not currently large in size, may become more widespread and will be more helpful than your own analysis of the outcome of deregulation in Australia, unless you have revised your negative opinion.

    Do you have any comment to make on the Enterprise Africa project, an Austrian venture operating out of George Mason University? That is the Austrian program in the field. What do you offer as an alternative?

  45. September 20th, 2006 at 17:48 | #45


    After some experience with this on my own blog, I think it is important for others to come in – providing they’re serious and not just trolling or ‘semi-trolling’ as I think one of our frequent visitors at Troppo said he did – and to do a bit of adjudicating on the argument. I think John has landed some fairly heavy blows against your own credibility.

    Resonding to all your questions and links takes a lot of time. And Popper is an area you work over on a daily basis not John. You’ve asked a lot of questions, taken a lot of John’s time. Yet you’ve not retracted your claim that John doesn’t know what he’s talking about. He seems to have a fair grasp of it to me.

    Meanwhile back on Troppo, James Farrell has invited you to substantiate some of your own claims. We’re still waiting. There is such a thing as credibility in all this. Credibility is a means by which we ration our attention. I don’t think you’re engaging with John very directly – you’re running him around to weblinks. I reckon you should engage more directly or withdraw. Perhaps you could use the time you save responding to James Farrell’s challenge on Troppo.

  46. September 21st, 2006 at 23:09 | #46

    Nicholas, maybe you can explain how John has demonstrated that Lakatos either discovered errors in Popper’s methodology or improved on it. In the meantime I rest my case that John is out of his depth in the philosophy of science. That by itself is not a big deal, he does not claim to be a philosopher of science but it does mean that he is misleading his students.

    There may be outstanding issues with James Farrell but I have made piecemeal replies to some points in comments on his post, and there is another post of my own that followed.


    John Q also says over and over that the Austrian program has broken down without taking any notice of the activities at George Mason Uni, including the Africa Project.

  47. September 22nd, 2006 at 11:02 | #47

    Rafe – I’m coming from a quite different position on the points of substance to Quiggin. I agree with you that Lakkatos didn’t add much to Popper. But John has engaged you on the substance and your response has mainly been to insist on answers to your questions as if John were responding to interogatories from a lawyer. He’s engaged you on the subject and you’ve not responded.

    In the meantime you’ve made absurd comments about both Samuelson and Keynesianism above and suggested that some field work in Africa is a good thing for the Austrians to get into. Well I’m sure it is. It doesn’t rescue the Austrians from their own lack of constructive output.

    So I can’t see much point in arguing. I’m very aware of the shortcomings
    of modern economics. But modern economics provides frameworks for making claims and investigating states of affairs that help us think about the economic world. Samuelson provided any number of frameworks which provided powerful insights into pressing questions of public policy.

    Even your point about Keynesianism, which John effectively refuted doesn’t even hit home if left unrefuted. That is, like other frameworks, ‘hydraulic’ Keynesianism is a perfectly legitimate way to look at the economy providing you keep in mind that you’re abstracting from important aspects of reality which will sometimes mean your model is misleading.

    There’s also another whole question which I might try to expand on in a post of my own about whether these debates matter a damn to science. At least in economics some of the best economits have been weak methodologists or philosophers of science.

    Samuelson and Friedman both championed different versions of bowldlerised (and in some cases ridiculous) Popperianism, but made great contributions to economics. Krugman makes any number of naive comments about methodology but has made worthwhile contributions to economics and has a fabulous flair for understanding the discipline – you should read his recent introduction to the General Theory. It’s fabulous.

    Meanwhile the economists whose economics organically grows from a powreful and insightful grasp of methodological and philosophical issues include Smith, Marshall and Keynes. I’d like to include Hayek, but, though he was a powerful political philosopher – as Friedman would have argued – he wasn’t much chop as an economist.

  48. September 22nd, 2006 at 13:39 | #48

    That last sentence was poorly punctuated. It should have read that Hayek was a powerful philosopher and methodologist but that – as Friedman argued – he wasn’t much chop as an economist (for instance Friedman regarded his forays into monetary economics as pretty wide of the mark).

  49. jquiggin
    September 22nd, 2006 at 14:06 | #49

    Just to follow up, I’d be interested to read posts from Rafe on the main contributions of:

    (i) Austrian economics since, say, 1980, (new stuff, not late works from Hayek or similar).
    (ii) Philosophy of science since Popper

    So far, all I’ve seen is dismissal of everything that people who’ve actually been working, rather than writing manifestos, have done.

  50. September 22nd, 2006 at 16:02 | #50

    For a recent contribution by Buchanan and Vanberg:


  51. James Farrell
    September 23rd, 2006 at 00:18 | #51

    The identification of equilibrium with teleology seems very unhelpful to me. Setting that aside, the critique of neoclassical economics in terms of open systems and uncertainty is the sort of thing post-Keynesians and critical realists go on about. (Shackle is an important influence on both of those schools.) The challenge to deterministic modelling is hardly the preserve of Austrians, and, as I pointed out when you attacked PAE, you should be grateful to have so many allies in this endeavour.

    In any case, I suspect that what John is after is not evidence that Austrians can match with it with post-Keynesians when it come to ontological speculation, but rather an instance of Austrians identifying some puzzle in economic life, and offering an original and convincing explanation for it. After 1980, he said, so the socialist calculation debate doesn’t count.

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