Know Your Limits

Former Representative Ron Paul tweeted and republished a recent article on Mises Institute  discussing “scientism” (that is, the phrase coined by FA Hayek to describe the over-reliance on the scientific method) written by Jonathan Newman.  Scientism is a problem, but Mr. Newman inaccurately describes it, and in the process, attacks science rather than scientism.

Newman’s biggest error is here (emphasis added):

Scientism is the over-reliance on or over-application of the scientific method. Scientism has many forms, one of which is the use of empirical methods to do economic science, or the dismissal of claims not based on experiment results that question other claims that are based on experiment results.

The bolded part is flat-out incorrect.  First off, if one doesn’t do empirical methods, one isn’t doing economic science.  Second, if that were true, the Mises, Hayek, Smith, Ricardo, et al are all guilty of scientism.  The empirical method requires observation, consideration, testing, etc of natural phenomena.  If we aren’t doing that, then we aren’t doing anything worth doing.  Smith’s Wealth of Nations is an empirical work.  Mises’ Human Action is empirical work.  Hayek’s Prices and Production is empirical work.

One might argue Newman is speaking more (like Hayek was) on the heavily mathematization of economics.  Ok, fine.  Newman’s criticism is still incorrect.  Mathematical and statistical models can provide us insight, so long as they are used correctly.  We must remember that the output from such models is model-dependent.  It is conditional upon certain assumptions.  This is true whether it is a highly advanced econometric model or a simple Marshallian supply and demand graph.  Knowing the limitations and applicability of models is important to getting the intuition (a great discussion of this point is made in Robert Ableson’s “Statistics as Principled Argument“).  The problem arises when we treat the results of these models as Gospel without consideration of their conditions.

Newman’s article has other issues (such as posing the hypothetical “what if the Pythagorean Theorem is wrong?”) which I will cover at a later time.

HT: Garett Jones

Update: I had incorrectly attributed the article in question to Ron Paul instead of Jonathan Newman.  My apologies.  The blog post has been updated to reflect this correction.

6 thoughts on “Know Your Limits

    • You’re right. I saw Paul tweeted it and was under his Institute’s name. I’ll fix when I can.

      But he’s still endorsing a wrong point, so my general criticism holds

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    • Thank you. I am well familiar with the writings of Mises (an advantage of studying at GMU). With all due respect, I think you (and Rothbard) have misunderstood his argument.

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  1. Scientism is not the scientific method. Scientism is using biased data points and rejecting a healthy skepticism to support politically correct dogma.

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