Jim Devine wrote:
The fact that Julio's model produced non-intuitive results is a major blow against Ted's critique, which is totally on the methodological & philosophical level as far as I can tell. Methodology and philosophy can guide us in our thinking, but if simple social science produces unexpected results, it's a step forward.
Actually, it's completely irrelevant to the arguments I made. You've also mischaracterized them. "Philosophy" in the sense of "ontology" is necessarily an feature of every explanation, i.e. every explanation involves explicit or implicit claims about the ultimate nature of reality. As I showed, it's involved, among other ways, in the form of the idea of "internal relations" in Keynes's explanation of U.S. interest rates in 1932. This has "methodological" implications. It makes it logically impossible to translate that explanation into mathematical abstractions for the reason that such abstractions require the irrelevance of internal relations for their valid application. In addition to this, an explanation in terms of the psychological fact that "everyone in New York is scared so stiff as to be unable to move" can't be consistently translated into an explanation in terms of the assumption that "everyone in New York" is rationally optimizing. On it's own, the claim that "if simple social science produces unexpected results, it' a step forward" leads to absurd conclusions. The Bedlamite conclusion of the "remorseless logician" Hayek that real wealth was growing faster in the Great Depression than in the preceding boom was "non-intuitive." Keynes explained the Bedlamite aspect in terms of the psychology underpinning his economic analysis. This explained Hayek's inability to read with "good will," i.e. his incorrigible "prejudice" (in Julio's sense), as well as his immunity to rational critique. "Hayek has not my book with the measure of 'good will' which an author is entitled to expect of a reader. Until he can do so, he will not see what I mean or know whether I am right. He evidently has a passion which leads him to pick on me, but I am left wondering what that passion is." (vol. XIII, p. 243) Ted
