Friday, April 9, 2010

Good theories are modest theories

This is an attempt to say what I was trying to say in the last post more succinctly. Any theory, and worldview linked to those theories, needs to have what it holds as assumptions and what it actually theorizes about clearly established. For instance, an economic theory can accurately describe how a certain range of activities take place within a given social and institutional structure. It probably can't accurately describe the process by which the range of activities covered by the theory changes as social norms alter to bring more activities within the economic sphere, say why old age care gets sent out to the market where before it was done in the home. It may try, but it probably can't explain this well. Economic theories are unlikely to be effective at describing the proper role of the state since they don't really have a theory or clear concept about the state, it isn't a theory of institutional change. This is the role of a theory of the state. For any worldview to effectively describe the world as it actually is, instead of how it is in theory, it needs to be recognized that certain aspects of any theory are artificially held constant. These assumptions should not be seen as an ideal type to be moved towards, but instead necessary assumptions for the functioning of a given theory. These assumptions themselves can be unpacked and theories about their functioning constructed.

In other words, you can make a theory about economics under a given state structure, and you can make a theory about the role of the state within an economic structure but you should not let your theory about economics dictate state structure nor should let your theory about the role of the state dictate your economic structure. This was a very foolish mistake that seems to be made rather frequently.


  1. The Tzmiskes uncertainty principle? I think the title is the best point you make here. I actually think Economics can very well inform discussion of the optimum state and that political science can inform economics. But you're right that neither discipline (and no other) ought to claim to do more than inform.

    I like to hear wise professionals say what they've thought long and hard about. I don't like to hear them tell me what they know.

  2. Dough, I agree, especially with the notion of listening to what someone has thought about rather than what they already know.

    To a large extent I feel like I'm orbiting an idea I can't quite get at with this post. To take another stab at it, if your economic theory has an assumption about how something works, such as the state, but does not actually have a theory of the state, suggesting that the state should behave like the state in your theory doesn't work since there is no real theory of the various things the state is supposed to do and the trade offs involved in the state fulfilling its various roles. It's not meant to imply that economic theory shouldn't inform government where the theory does have something to say about the interactions and trade offs involved.

    I think I'm still in orbit and haven't quite touched down yet. I may have a follow up post if my thinking clarifies.

  3. Arggh, sorry with the typo at the start.