Friday, October 15, 2010

A Critique of Pure Nonsense

Cross-posted on the Mises Economics Blog.

There is a YouTube video entitled "A Critique of Austrian Economics", made by an anonymous YouTuber, which has had over twenty thousand views.  The reader is dripping with insipid condescension; he reads the whole thing in this pedantic sing-song voice that is quite emetic in effect.  So that you don't have to listen to that, and so as to thus spare whatever upholstery may be around you, I've transcribed the last half or so below and added comments.
The Austrian approach to philosophy is a very old one: rationalism.  You have to go back to the 17th and 18th centuries to find when it was last considered a serious philosophical movement.  It was widely abandoned after its inadequacies were laid bare by other schools of philosophy: empiricism, positivism, and most famously by Immanuel Kant's Critique of Pure Reason.  Philosophy has progressed tremendously since rationalism.  The Austrian approach is a relic of history.
Here, he resorts to the fallacious Whig Theory of the History of Science.  Secondly, the YouTuber's attempt to refute the epistemology of Ludwig von Mises by name-dropping Kant is highly ironic, given that Mises was hugely influenced by Kant.   Kant tried to reform rationalism, he did not try to refute it.  Kant is widely considered a rationalist himself, yet the YouTuber tries to make him out to be a standard-bearing anti-rationalist.  I'll bet the YouTuber hasn't even read anything about the Critique of Pure Reason, let alone the book itself, and is basing his assumption that the book is anti-rationalist on the everyday-usage definition of the word "critique" (as in "fault-finding", which is the way he uses the word in the title of his video), as opposed to "detailed analysis and assessment", which is how Kant was using the word.
The problem with rationalism is that it makes the search for truth a game without rules.  Rationalists are free to theorize anything they want, without such irritating constrictions as facts, statistics, data, history, or experimental confirmation.
To say that a method that is based on what Mises refers to as "the logical structure of the human mind" is "without rules" is preposterous.  Furthermore, if anything, it is positivism that is rule-free.  Statisticians are free to conclude from data anything they want.  Empiricism is effective in the natural sciences only insofar as (1) the scientist is able to control the experiment, (2) the elements of the experiment are simple and few, and (3) the correlations that result are enormous and cannot be easily explained in any other way.  Statistical economics fails on all three counts.  Statistical treatments of natural science in which these criteria are not met also fail (like climate modelling).
Their only guide is logic.  But this is no different from what religions do when they assert the logical existence of God, or Buddha, or Mohammed, or Gaia.
St. Anselm's "ontological proof of god" was refuted by his clerical contemporaries, using the tools of logic.  One might ask the YouTuber if he considers geometry a religion.
Theories ungrounded in facts and data are easily spun into any belief a person wants.
The reality of action is an experienced fact.
Starting assumptions and trains of logic may contain inaccuracies so small as to be undetectable, yet will yield entirely different conclusions.
So may statistics.
In fact, if we accepted all the tenets of the Austrian School, we would have a second reason why it fails to qualify as science.  To be a science, a school must produce theories that are falsifiable: that is, verifiable.  If a theories correctness or falseness can't be verified, then it is not science.  Perhaps it's religion, or metaphysics, or an unsupported claim.
He does not back up his criteria for qualifying as a science here.  He merely asserts.  And he wants to lecture Austrians about unsupported claims...
Austrian economists make claims about the market such as "markets know better than governments", but then deny us the tools for verifying those claims, such as statistics.
Again statistics can verify anything the verifier wants to or doesn't want to.
One might ask, "How do they know?"
One might read actually read the works of Austrian economists, and find out.
Austrians claim to know these things by logic.  But although their literature frequently invokes a priori knowledge, this term appears to be misused.  Humans are not born knowing that 2 + 2 = 4.  It is something they must learn from their environment, namely school.  Forging this learned knowledge from axioms comes later, and then through a process of trial and error.  So in this sense, a priori knowledge doesn't even exist, unless one refers to a very basic level of knowledge capability, such as the physical construction of the human brain, or animal instincts.
Here he conflates a priori with inborn knowledge.  He tries to say that because we learn 2 + 2 = 4 via experience (school), that 2 + 2 = 4 is a posteriori knowledge.  But a posteriori knowledge is knowledge that is derived from the facts of experience, not knowledge learned in the course of experience.  That 2 + 2 = 4 is necessarily true is derived from pure definition, and is thus a priori.  We are not born knowing it, so it is not inborn. Plato also conflated the two (although intentionally, and not accidentally like this guy), according to his theory in the Meno that a priori mathematical knowledge is remembered (and thus inborn), not learned.
Austrians may be using the term "a priori" to mean logical proofs or axioms, such as "If A = B and B = C, then A = C."  But if Austrians were creating economic axioms that were true by logical force, then the Austrian School would become world famous overnight, whether mainstream economists liked it or not.
That presumes a respect for logic.
In truth, Austrian journals are not filled with these kinds of axioms. Their arguments are really no more than theories that are guided or tested by logical proofs.
This is because the axioms and first deductions have already been discovered.  Also he conflates "axiom" with "deduction".
Again, that's no different from what religions do.  The fact that we have thousands of different religions in this world is remarkable evidence of the fallibility of this method.
The vast preponderance of religious growth has had nothing to do with rationalist or deductive arguments.  In trying to demonstrate the fallibility of the deductive method, he himself demonstrates the fallibility of his own data-worshipping method by lamely inferring from a single statistic a conclusion that simply does not follow. Earlier, he tried to characterize the Austrian method as a "relic" as opposed to the scientific method of mainstream economics.  Like all positivist social scientists, he borrows the prestige of natural science with no justification.  YES, the natural sciences which met the criteria I outlined above achieved more success with inductive methods than with the deductive methods of the past.  But the social sciences have shared not one whit of that success with inductive methods.  In fact, every single one of the economic laws that are considered uncontroversial by even mainstream economists were discovered by the "armchair reasoning" approach of non-positivist economics.  There is not a single non-contentious economic law derived from statistics, even among the mainstreamers.  Now that is a sign of failure. Due to time constraints, some of my responses above are sparse, and could definitely be fleshed out more.  Feel free to do so in the comments, and I'll edit the post to quote you.  Then I'll use the final product as a script to make a response video.  The YouTuber has disabled comments on his video, but a video response should show up in the "related" column on the YouTube page.

No comments: