POS L2 The ideal of positive science (1) Flashcards
The pretense of knowledge
Hayek worried aloud that thinking of economics as a science might fuel what he called “the pretense of knowledge”—the idea that anyone could know enough to engineer society successfully.
Recent issues with the pretense of knowledge
Recent government interventions suggest that politicians and bureaucrats today think they can design just about anything. This ignorance has backfired, as it always does, bringing with it what economists call “unintended consequences.”
Problem with the pretense of knowledge
It denies individual responsibility, which means that it assumes that all individuals are the same and it does not take into consideration the intentions of humans.
(economics is not like physics, not fully rational)
The double hermeneutic
Natural science is one-way
- looks at intentions
- theory can and does change reality
- social science is two way (natural science is only one-way)
- social sciences studies how people understand their world and how this understanding shapes their practices
- people think and use new information to revise their understanding –> they can use the knowledge and insights of social science to change their practice
What is an example of double hermeneutics by Goshal
That management theory is self-fulfilling
Determinism
Determinism, in philosophy, theory that all events, including moral choices, are completely determined by previously existing causes. Determinism is usually understood to preclude free will because it entails that humans cannot act otherwise than they do.
You can predict what will happen next according to several laws of nature (used in natural science)
(the assumption that everything has cause and effect)
Behavioral assumptions
The behavioral assumption is one of the basics theories in classical finance. The assumption is that, under their resource constraints, human attempt to maximize their utilities, which means biggest profit and outcomes.
The two most important characteristics of the human under the behavioral assumption are rationality and self-interest.
Examples of social causal claims
Population increase causes technological innovation.
• A free press causes allow incidence of famine.
Intentional explanation
In philosophy, intentionality is the power of minds and mental states to be about, to represent, or to stand for, things, properties and states of affairs.
- tries to understand the intentions that led to the actions
- intentions are the explanation of something
- Intentional explanation is future oriented
- communication has to be possible
Functional explanation
the function of a certain object gives explanation to the existence of that object
Problem with the functional explanation
Difficulties arise because functions are normative: there is some sense in which items ought to perform their functions; failure to perform is a kind of error. Philosophical discussions investigate whether and how this normativity can be understood in scientifically respectable terms.
Why do we use the functional explanation although it has flaws.
We use it because it gives us an initial start to solve a problem.
What is positivism
- way of thinking, an epistemology
- recognizes only that which can be scientifically verified or capable of logical or mathematical proof and rejects metaphysics and theism.
- based on empirical evidence (observation)
What is positivism based on?
Verified data (positive facts) received from the senses are known as empirical evidence; thus positivism is based on empiricism.
logical positivism (later called logical empiricism)
a form of positivism, developed by members of the Vienna Circle, which considers that the only meaningful philosophical problems are those which can be solved by logical analysis.
we use observation and logic to come up with general statements
two statements in logical positivism:
analytical and synthetic statement
Why was logical positivism developed?
After WW1. WW1 was caused because of miscalculations and irrational (nationalistic) sentiments
Metaphysics
the branch of philosophy that deals with the first principles of things, including abstract concepts such as being, knowing, identity, time, and space.
- concepts and theories which we cannot verify if they are true through observation; like the existence of god
3 grand theories of knowledge that led to the establishment of logical positivism
- Rationalism
- Empiricism
- Idealism
Rationalism (epistemology)
- all knowledge stems from human rational thinking
- not based on observations
- example: mathematics
Example of rationalism
An example of rationalism is not believing in the supernatural.
Math and (Finance) are rational
(Finance has become a bit idealist; we now recognize that intentions so states of mind play a role in finance)
Empiricism (epistemology) or Positivism
- opposite of rationalism
- all knowledge has to come from observations (sensory experience)
Idealism
- combination of rationalism and empiricism
- knowledge has to come from both observing and thinking
- we add structure to our observations
- (belongs to metaphysical philosophies?)
tenets
principles of belief
Problem with Idealism
We cannot verify our own rationality. We have to resort to metaphysics.
- humans are born with the ability to think and organize thoughts. The problem is that we cannot prove that this is true. We do not know how much is true
Epistemologically, idealism manifests as a skepticism about the possibility of knowing any mind-independent thing.
How does Idealism combine rationalism and Empiricism?
It gives structure to sensory experiences. Structure is accomplished through logic.
What is logic?
A language to structure our observations and turn it into scientific knowledge.
- metaphysics is no longer needed. This is called linguistic turn
logical nonsense
- you don’t need to observe it.
- We know it is false through logical deduction.
- about statements that are never true