Uncountable by David Nirenberg & Ricardo L. Nirenberg

Author:David Nirenberg & Ricardo L. Nirenberg [Nirenberg, David & Nirenberg, Ricardo L.]
Language: eng
Format: epub
Tags: HIS000000 History / General, PHI005000 Philosophy / Ethics & Moral Philosophy, MAT015000 Mathematics / History & Philosophy
ISBN: 9780226646985
Publisher: University of Chicago Press
Published: 2021-10-19T18:30:00+00:00

It is sometimes said that the laws of economics are ‘‘hypothetical.’’ . . . Almost every scientific doctrine, when carefully and formally stated, will be found to contain some proviso to the effect that other things are equal; the action of the causes in question is supposed to be isolated; certain effects are attributed to them, but only on the hypothesis that no cause is permitted to enter except those distinctly allowed for.58

We might want to say—with Marshall and against Ruskin—that economics is “like every other science” in that it uses provisional claims of “sameness” in order to produce laws that make increasing (perhaps even eventually predictive) sense of the empirical world. “In committing oneself to a law qualified with a ceteris paribus clause, one envisions that the imprecision of the predicate [C] one is picking out will diminish without limit as one’s scientific knowledge increases.”59 But what is striking about economics and the social sciences in comparison to “every other science” (such as physics) is just how little the “imprecision” of ceteris paribus clauses (such as “everybody’s preferences are transitive”) has in fact diminished, and conversely, how little their predictive power has advanced.60

This is not for lack of trying. Enormous mathematical effort has been invested in increasing the purchase of formal economic models on the empirical world. The Cowles Commission at the University of Chicago in the 1950s, for example, was tremendously productive in posing the theoretical problems at stake, but by the 1960s the limited empirical reach of their formal models was already recognized. The ensuing search for “policy invariant” structural parameters (i.e., a sameness that stays the same), championed by Leonid Hurwicz with the sharpest of mathematical weapons, foundered on the fact that “economic data, both micro and macro, have not yielded many stable structural parameters.”61

Yet another increasingly popular approach has taken randomization as a benchmark and tries to identify causal parameters by looking for “natural experiments” within societies (such as a sudden change in law or regulation), specific social experiments (such as the introduction of a childcare program with randomized eligibility), or even laboratory experiments (such as participant behavior in role-playing games).62 And today, as more and more human behavior from daily life “in the wild” is translated into computational data by smartphone, search engines, wearable devices, and other technologies, formal models and their “sameness” clauses can be tested against (or derived from) databases of exponentially increasing size and quality, driving theory and the empirical into an ever-more-intimate embrace.

Each step in this history has been accompanied by the hope that it might further refine the “sameness clauses” assumed by the theory. For example, in “What Do Laboratory Experiments Measuring Social Preferences Reveal about the Real World?.” Steven Levitt and John List write that “the allure of the laboratory experimental method in economics is that, in principle, it provides ceteris paribus observations of individual economic agents, which are otherwise difficult to obtain.” But as they then go on to note, the preferences revealed in a lab are

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