Is the Market a Test of Truth and Beauty?

(Jacob Rumans) #1
Chapter dzǵ: Tacit Preachments are the Worst Kind ȁȃȄ

the terms that people themselves use when they perceive and think about
and cope with reality.


őŢŕŐőŚŏő śŒ śŠŔőŞ ŗŕŚŐş

Cheerleaders for rigor tacitly imply that only numbers constitute really
respectable evidence. Everything else is anecdote; and, in the economist’s
quip, “a historian is one who believes that the plural of anecdote is data”
(Brennan and LomaskyȀȈȈȂ, p.Ȉǿ). Yet Brennan and Lomasky, unde-
terred, deny


that the world is describable exhaustively by numbers or that broad brush
descriptions of the political landscape have nothing of relevance to con-
tribute to the collection of evidence.... Anecdote does ... have a role to
play, and a good feel for the whole story is a crucial prerequisite for proper
empirical judgment.... More than “fitting the facts” is required of a the-
ory; it must also genuinely explain, in the sense of rendering intelligible,
the facts it fits. (ȀȈȈȂ, pp.Ȉǿ–ȈȀ; compare HiggsȀȈȇȆ, pp.ȂȀ–Ȃȁ)

Ļe history of science shows, with Copernicus and Darwin as exam-
ples, that theory can play a powerful role in organizing understanding
even before it can provide quantitative predictions.Ļe Wealth of Nations
contains little quantitative detail but had great impact “as a way of seeing
how things fit together qualitatively.” Quantitative prediction, though a
reasonable goal for science, is not the test of a new theory (MargolisȀȈȇȁ,
pp.Ȁǿ–ȀȀ).
If an economist is not willing to analyze nonquantitative evidence
such as executive orders, statutes, court decisions, and regulatory direc-
tives, writes Robert Higgs (ȀȈȇȆ, p.Ȃȁ), then perhaps he should abandon


his pretensions in this field of study.... Ļe keys lost elsewhere will never
be found under the lamp post, not even with the aid of the most powerful
floodlights. Ļe spectacle of economists bringing their awesome math-
ematical and statistical techniques to bear on the analysis of irrelevant
or misleading data can only disgust those for whom the desire to under-
stand reality takes precedence over the desire to impress their colleagues
with analytical pyrotechnics.ȇ

ȇHiggs further reminds us that people do not act merely out of self-interest in the
narrow sense ofhomo oeconomicus. Sometimes they act from loyalty to a cherished ideology
and for the satisfaction of shared membership in a set of noble, right-minded persons (ȀȈȇȆ,
pp.ȃȁ–ȃȂ).

Free download pdf