Quote of the Day

Today’s Quote of the Day comes from page 34 of Milton Friedman’s 1966 essay The Methodology of Positive Economics:

A theory is the way we perceive “facts,” and we cannot perceive “facts” without a theory.

There are many people I see who assert they simply “follow the data” or “let the facts speak for themselves.”  These people like to think they are objective, unbiased, and doing real scientific data (as opposed to those of us who look at the data through the lens of theory, who are merely “dogmatic slaves,” to use one common insult hurled at me whenever discussions of minimum wage arises).  However, if they are truly simply looking at data with no theory, then they are looking at the data context-less.  It would be the same as driving in a new area without the aid of a map or GPS.  Theory helps guide our thinking on the facts, helps to separate the wheat from the chaff, in the same way a map helps prevent turning down dead-end roads.*

*I have said this before but it bares repeating: none of this is to say a theory should be blindly followed.  When confronted with data contradictory to the theory, one must ask “why.”  It may be, as ’twas the case of Aristotelian physics, the theory is incorrect.  Or, it may be the data collected are an anomaly, or that there is some condition not met to bring about the predicted result.  Theory must be constantly tested for its robustness, but should not be casually dismissed.

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