Flawed Foundations of Social Sciences

{http://bit.ly/AZffoss} In the previous post (“Folk” Western Philosophy), we discussed how the trauma of loss of faith led European intellectuals to the philosophies of Empiricism and Rationalism which tell us that we can only trust what we can see (the empirical) and what we can figure out with reason (logic). In particular, we should not trust the testimony of our heart and soul, since that was what led to widespread belief in the mass deception that was religion. This line of thought culminated with the Emergence of the philosophy of Logical Positivism in the 20th Century. This philosophy evolved and changed under the pressure of new scientific discoveries, and was eventually rejected by philosophers because it could not explain the growth of scientific knowledge. Nonetheless, the simple-minded lowbrow understanding of this philosophy became widely accepted among the general public. The ‘folk’ version of this philosophy continues to enjoy tremendous popularity among social scientists in general, and economists in particular.

This philosophy had devastating consequences on how the Western Social Sciences WSS were constructed in the twentieth century, on entirely wrong foundations. It is necessary to understand this story, in order to be able to see why we need to reject these sciences, and build our on our thousand year tradition of “social science” – how we should shape our individual, familial, communial, social, political, and economic lives — that is our treasury of Fiqh. In this post, I will describe some of the foundational errors which lie at the heart of modern social science, which is built on the philosophy of logical positivism.

At the heart of the problem is the idea that “science” is the only source of (certain) knowledge. In fact, science consists of guesses about the structure of hidden reality. As such, it is never certain. Furthermore, we have many other sources of knowledge about reality, which are based on our unique, personal, non-scientific experiences. So both positivist ideas about science are wrong. Nonetheless, when it came to be widely believed that science was the only source of knowledge, humanities was transformed into “social science” in the belief that the scientific approach would lead to deeper insights into human beings and societies. But the scientific approach and the scientific method was based on the complete misunderstanding of science (that is, logical positivism). As a result, the attempt to put humanities on “scientific” foundations, as implied by the name “social science”, was a complete disaster. See The Misconceived Project of Social Science, for more specific details. While there are many others, three of the major problems that arose because of positivist foundations for economics are discussed below (see also: Three Goals for Pedagogical Change):

1. The Search for Universal Laws: According to positivists, science consists of universal laws (see Economists Confuse Greek Methodology with Science) History consists of particular events, and so this cannot be part of science. There was a battle of methdologies (Methodenstreit) in the late 19th century when the historical and qualitative approach to economics was replaced by the quantitative and “scientific” approach, based on universal laws. This has been characterized as “How Economics Forgot History” by Geoffrey Hodgson. See “Method or Madness?“. Today, economists search for universal laws of economics, which hold in all societies, across time and space. Of course, there are no such laws, which is why modern economic theory is vacuous. It attempt to be valid for all societies, and ends up being wrong for all of them. For evidence in this regard, see Islamic Approach to Micro: Intro
2. Exclusion of Unobservables: The second major mistake in the foundations of social sciences in general, and economics in particular, is the positivist idea that science is based purely on observables. Due to the effects of this, unobservable concepts like human welfare, which are central to economics, have been removed from the picture. This leads to an economics which is blind to the sources of human welfare. For more details, see The Easterlin Paradox. Furthermore, economics is blind to complexity of human motivations, which are hidden in the hearts and hence unobservable. As a result, microeconomic theories of human behavior conflict strongly with reality – see Behavioral Versus Neoclassical Economics.
3. Concealment of Values: Normative issues are central to economics. Is it just to charge a high price for essential goods, in order to make high profits? Should we provide for basic needs for all members of the society? Do the poor have a right in the wealth of the rich? Should we produce luxury goods for the rich if they earn more profits, and stop producing health and educational products for the poor, if these earn low profits? Logical positivism says that values are not scientific and hence these questions cannot be part of science. Therefore, modern economics was created with an appearance of objectivity. In fact, economics cannot be done without norms, and so normative judgments were hidden in the foundations of economics. My paper on “Normative Foundations for Scarcity” shows that the apparently objective concept of scarcity, supposedly the fundamental concept of economics, actually contains three different normative values.

These errors in the foundations of the subject have led to disastrously poor performance of economic theory when utilized to attempt to solve the problems of mankind. For example, Nobel Laureate Paul Romer suggests that economists have inflicted costs on the world which are larger than the benefits that they have brought. For quotes from a large number of economists, who think that there is something fundamentally wrong with the subject, see Quotes Critical of Economics.

LINKS: For closely related talks, see The Puzzle of Western Social Science and a later video with same title (but substantially more advanced content) on the WEA Pedagogy Blog: Flawed Foundations of Social Science. ( shortlink: bit.ly/rsia10a )