Lecture Seven

1
Lecture Seven

• Scientific Economic Methodology

2
Is Economics a Science?

• Economics textbooks use Robbins definition of
  economics
• "Economics is the science which studies human
  behaviour as a relationship between ends and
  scarce means which have alternatives uses"
  (Lionel Robbins 1932 16).
• Begs the question what is a science?
• At most basic level, science is about knowledge
• In pre-Enlightenment Europe, knowledge came
  from reading The Great Works
• Bible
• Aristotle
• Ptolemy, etc.

3
What is a science?

• Science as attempt to gain knowledge from
  observation, theory, experiment, flourished
  during Renaissance
• Frequently contradicted Great Works
• Greatest clash between Science Great Work was
  between
• Earth-centric view of universe
• Religion, Aristotle Ptolemy
• Sun-centric view of universe
• Copernicus, Galileo Tycho Brahe
• Great Work knowledge
• Bible, Aristotle, Ptolemy on nature of universe
• Psalm 931, Psalm 9610, and Chronicles 1630
• "the world is firmly established, it cannot be
  moved.

4
What is a science?

• Science knowledge
• Observe planets, develop explanation that fitted
  observation
• Sun had to be centre of universe
• Earth orbits the Sun
• Galileo, etc., persecuted for beliefs, but
  ultimately prevail
• Ultimate success of Copernican approach led to
  science-dominated rather than religion-dominated
  worldview
• In 18th 19th century, position that science
  meant observation first, explanation second
  dominant
• Empirico-inductive method seen as essence of
  science
• observe first, find explanation for observation
  later

5
Popper What is a Science?

• Karl Popper challenged this in early 20th century
• Argued that essence of science is conjecture and
  refutation
• Philosopher writing at time of collapse of
  Austro-Hungarian empire (1912-1919)
• Once convinced, then disillusioned, by Marxist
  theory of history
• Characterises these, psycho-analysis, astrology,
  etc. as pseudo-science
• Posed question 'What is wrong with Marxism,
  psycho-analysis...? Why are they so different
  from physical theories...?' ... these ...
  theories, though posing as sciences, had ... more
  in common with primitive myths than with
  science... Conjectures Refutations

6
Popper What is a Science?

• Rejected conventional explanations (empirical
  inductive method) because pseudo-sciences (e.g.
  astrology heavily empirical)
• Noticed characteristic of pseudo-sciences
  confirmation
• admirers ... were impressed ... by their
  apparent explanatory power. These theories
  appeared to be able to explain practically
  everything that happened within the fields to
  which they referred
• A Marxist could not open a newspaper without
  finding ... confirming evidence for his
  interpretation of history ... in the news, ...
  its presentation and especially of course in
  what the paper did not say.

7
Popper What is a Science?

• Argued that confirmation meaningless every
  conceivable case could be interpreted in the
  light of the relevant theory they could not
  be refuted
• Therefore, by exclusion, a true science was one
  which could be refuted
• Developed 6 principles to
• distinguish science from pseudo-science
• distinguish good from bad scientific behaviour

8
Popper What is a Science?

• Confirmations should count only if they are ...
  risky ..., if, unenlightened by the theory ...,
  we should have expected an event which ... would
  have refuted the theory.
• Every 'good' scientific theory is a prohibition
  it forbids certain things to happen...
• A theory which is not refutable by any
  conceivable event is non-scientific...
• Every genuine test of a theory is an attempt to
  falsify it, or to refute it...
• Confirming evidence should not count except when
  it is ... a serious but unsuccessful attempt to
  falsify the theory

9
Popper What is a Science?

• ...re-interpreting the theory ad hoc in such a
  way that it escapes refutation... is always
  possible, but ... rescues the theory from
  refutation only at the price of ... lowering, its
  scientific status.
• In summary
• the criterion of the scientific status of a
  theory is its falsifiability...

10
Popper How does a Science develop?

• The pre-history of a science is myth
• historically speaking allor very nearly
  allscientific theories originate from myths ...
• How to draw the line between myth science?
• to be scientific, must be capable of
  conflicting with possible, or conceivable,
  observations
• Myths may be important
• a myth may contain important anticipations of
  scientific theories
• How do myths originate?

11
Popper How does a Science develop?

• Humans seek regularities, explanations for
  reality theory precedes observation
• Myth provides theories (conjectures) about the
  world
• We test theories by experience some experiences
  contradict myth (refutations)
• Science develops out of myth by conjectures
  refutations
• scientific theories were not the digest of
  observations, but ... inventionsconjectures
  boldly put forward for trial, to be eliminated if
  they clashed with observations with observations
  which were rarely accidental but as a rule
  undertaken with the definite intention of testing
  a theory by obtaining, if possible, a decisive
  refutation.

12
Popper The nature of science

• Dogmatism criticism are polar opposites
• Some dogmatism needed to avoid early abandonment
  of theories but
• science is critical (attempts to refute
  theories), psuedo-science is dogmatic (attempts
  to verify)
• science develops by conjecture and refutation ..
  boldly proposing theories ... trying ... to show
  that these are erroneous ... accepting them
  tentatively if our critical efforts are
  unsuccessful.

13
Popper The nature of science

• Evolutionary basis to science our conjectures,
  suffer in our stead in the struggle for the
  survival of the fittest.
• Linear nature of science progresses from myth to
  science to better science
• Incremental nature of progress can never attain
  complete truth but each conjecture/refutation
  brings us closer to it
• Novel useful perspective on science
• But some obvious problems with Poppers view

14
Popper Problems

• Argues that theory precedes observation but
• Proposes that scientists more wedded to
  observation than theory (which they attempt to
  refute)
• Schizophrenic view of behaviour of scientists
• In practice hard to delineate between myth
  science
• Example (shortly) was Ptolemys theory of
  astronomy myth or science?
• Failure of Poppers Positivism as guide to
  History of Science led to Kuhns Paradigms
• Thomas Kuhn, The Structure of Scientific
  Revolutions
• Developed alternate theory of science to Popper
  because found difficult to delineate between
  myth and science
• Paradigms, normal science and scientific
  revolutions

15
Paradigms

• Scientific community wedded to its view of the
  worldits paradigm
• Theory selects observations which tend to confirm
  it
• Paradigm develops by extending range of phenomena
  it can explain normal science
• Paradigm embodied in textsprevious paradigms
  ignored/forgotten/judged from point of view of
  dominant paradigm
• Anomaliesthings which contradict theoryat first
  resisted
• At limits of paradigm, only anomalies left to
  resolve
• Failure to resolve leads to revolutionoften from
  outside

16
Paradigms

• Paradigm includes
• Widely accepted explanation of relevant phenomena
  (physics, chemistry, etc.)
• Often embodied in textbooks of discipline
• Set of unresolved puzzles
• Problems research students get PhDs by solving
• Normal science as process of resolving these
  puzzles
• Paradigm starts to break down when some puzzles
  fail to be resolved key anomalies
• Switch to new paradigm involves
• Not merely incremental addition to previous
  knowledge
• But total change in world view

17
Kuhn vs Popper on nature of progress

• Popper
• Incremental
• Science as a process
• Scientists wedded to conjecture refutation
  process, not current theory
• Each new discovery extends what we know

• Kuhn
• Incremental with periodic upheavals
• Science as history
• Scientists wedded to current paradigm, attempt to
  extend its application
• Ultimately anomalies lead to failure of paradigm
• New approach develops which transcends previous
  ideasnot merely extending knowledge but change
  in world view

18
An example Astronomy

• Theory of the cosmos from Aristotle to Copernicus
• Aristotle theory of ordered universe
• 2 parts the earth the heavens
• Earth the place of change
• Heavens the place of perfection
• 5 elements Earth, Water, Air, Fire, Aether
• Earth heaviest, thus earth at centre (explains
  gravity)
• Aether lightest, thus in heavens (explains
  orbits)
• Heavenly bodies on circular orbits in concentric
  spheres around earth in order of Moon, Mercury,
  Venus, Sun, Mars stars

19
Astronomy Aristotle/Ptolemy

• Universe finite, compact
• Spheres fit tightly together
• Fixed stars on outer sphere
• Beyond the stars, nothing the Void
• 2 sets of rules
• On earth, decay/change a stone falls to earth...
• In heavens, eternity heavenly bodies rotate
  forever
• Fits with religious view Earthly corruption
  Heavenly perfection

20
Astronomy Aristotle/Ptolemy
The Void
The Elements
Earth
Water
The Heavens
Air, Fire
Aether
Moon
Sun
Stars
21
Astronomy Aristotle/Ptolemy

• Aristotles system couldnt be maintained
• Not all orbits circular
• Planets reversed direction
• sometimes moved to east across the sky, other
  times to west
• Paradigmatic puzzle how to resolve observed
  behaviour of planets to core of paradigm that
  earth is centre of universe
• Ptolemy solves puzzle with Excentric, epicycle,
  and equant motion

22
Astronomy Aristotle/Ptolemy
Eccentricity of orbits explained
Reversal of direction possible
Universal centre
Earth
Centre of rotation

• Core of paradigm maintained
• Puzzle now to accurately place heavenly bodies
  on spheres

23
Astronomy Aristotle/Ptolemy

• Ptolemaic view breaks down by Renaissance
• Astronomical tables lose accuracy
• Navigation by mariners relies upon but also
  contradicts Ptolemaic celestial predictions
• Calendar becoming inaccurate
• Equinox moved from 21st to 11th Jan/July
• Copernicus proposes alternative paradigm
• Sun centre of universe (1st proposed by
  Archimedes, 212BC!)
• Earth planets have circular orbits around it
• Stars fixed at great distance (given parallax
  effect)
• Alternative tables slightly more accurate than
  Ptolemaic
• But explanation involves complete shift in
  viewpoint

24
Astronomy Copernicus
Completely different view of universe Not a
linear change from previous view (as in Popper)
but a complete change in vision a paradigm
shift
25
Astronomy Copernicus
Explanation for why stars dont move completely
different Not on a fixed sphere but at a
great distance
No apparent parallax for stars
Must be at enormous distance from earth
26
Astronomy Copernicus

• Lukewarm to hostile initial reception
• Clashed with Ptolemaic world view
• How would stones fall to earth if it wasnt
  centre of universe?
• How can stones thrown straight up fall in same
  place if earth rotates/moves?
• Why is there a Void between Saturn the stars?
• Clashes with bible, etc.
• Initial tables less accurate and as complicated
  as Ptolemys
• But became dominant after 25-50 years

27
Paradigms vs Positivism

• Ptolemaic view based on myth (religious view of
  universe)
• But were Aristotle et al unscientific?
• Complex model of universe, accurate tables, acute
  observations
• Did they attempt to refute theory?
• No, Ptolemys revised orbs maintains
  earth-centric view
• Was Copernicus hailed as refutation of Ptomelys
  conjecture?
• No, strong resistance
• Paradigm approach regarded as more accurate model
  of scientific behaviour

28
The Paradigm develops

• Later work by Feyerabend, Lakatos,
  extends/modifies concept of paradigm
• Lakatos Methodology of Scientific Research
  Programs (MSRP)
• Theories have hard core which adherents do not
  attempt to falsify
• Hard core surrounded by protective belt of
  hypotheses which may be adjusted to defend hard
  core
• Positive heuristic (like Kuhns puzzles
  normal science) where most development effort of
  program occurs
• An MSRP can be progressive (positive heuristic)
  or degenerative (negative heuristicadjusting
  protective belt to save hard core from attack)

29
Positivist v Paradigm view of Economics

• Positivist view of incremental progress
• In favour Refinement of economic theory from
  Physiocrats to neoclassicals Apparent linear
  progress
• Against concepts like utility as irrefutable
• Why did the chicken cross the road? To maximise
  its utility. Explains everything therefore
  explains nothing
• Paradigm/MSRP view
• History Sequence of paradigms, each with own
  world view, puzzles to solve, anomalies...
• Mercantilist Classical Keynesian Neoclassical
• Today Competing MSRPs, part progressive, part
  degenerative
• Neoclassical
• Post Keynesian
• Econophysics

30
Is Economics a Science?

• What is the status of economics as a science?
• Lacks some features of hard sciences
• E.g., Absence of controlled experiment
• Has some problems they dont
• E.g., Impact of observer on data
• Is economics a science in same sense as
  physics, astronomy?
• Point of debate between economists
• Has own methodology of scientific economics as
  well
• Commences with Robbins definition
• Key modern argument given by Friedman

31
Within Economics Instrumentalism

• Friedman An instrumental vision of economics
• Proper test of a theory is by its predictions
• Realism of assumptions irrelevant
• the more significant the theory, the more
  unrealistic the assumptions a hypothesis is
  important if it explains much by little
• as if assumptionsfirms behave as if
  maximising expected returns, etc.valid even if
  firms do not consciously do so.
• Reason for paper to counter perennial criticism
  of orthodox economic theory as unrealistic
• Friedmans argument a good theory explains very
  much using very little therefore its assumptions
  will be unrealistic

32
Within Economics Instrumentalism

• Truly important and significant hypotheses will
  be found to have assumptions that are wildly
  inaccurate descriptive representations of
  reality, and, in general, the more significant
  the theory, the more unrealistic the assumptions
  (in this sense)
• A hypothesis is important if it explains much
  by little, that is, if it abstracts the common
  and crucial elements from the mass of complex and
  detailed circumstances surrounding the phenomena
  to be explained and permits valid predictions on
  the basis of them alone.
• To be important, therefore, a hypothesis must be
  descriptively false in its assumptions it takes
  account of, and accounts for, none of the many
  other attendant circumstances, since its very
  success shows them to be irrelevant for the
  phenomena to be explained.

33
Within Economics Instrumentalism

• To put this point less paradoxically,
• the relevant question ask about the assumptions
  of a theory is not whether they are descriptively
  realistic, for they never are,
• but whether they are sufficiently good
  approximations for the purpose in hand.
• And this question can be answered only by seeing
  whether the theory works, which means whether it
  yields sufficiently accurate predictions.
• The two supposedly independent tests thus reduce
  to one test. (Friedman 1953 14-15)

34
Within Economics Instrumentalism

• Friedman thus rules out evaluating theory on
  basis of its assumptions. Paraphrasing Friedman
• Perfect competition assumes an infinite number
  of firms? This is unrealistic, therefore theory
  false?
• Irrelevant only question is whether theory makes
  realistic predictions
• Dont need to ask businessmen how they behave
• Monetarism treats money as bits of paper
  dropped from helicopters and concludes that
  inflation is caused by printing money This is
  unrealistic, therefore theory false?
• Irrelevant only question is whether theory makes
  realistic predictions
• Dont need to know actual process of money
  creation

35
Within Economics Instrumentalism

• Problems with Instrumentalism
• Friedmans defended his economics with
  instrumentalism
• But how have his predictions fared?
• Friedman championed monetarism
• Control inflation by controlling rate of growth
  of money supply
• Adopted by UK Thatcher, USA Reagan governments,
  plus many others in 1980s
• Eventually abandoned after continual failures to
  meet monetary growth targets
• Monetarism therefore an empirical failure
• But mainstream money theory hasnt changed a
  great deal from monetarism

36
Within Economics Instrumentalism

• Friedman describes assumptions as simplifying
• Ignore unnecessary detail to focus on what
  matters
• But some assumptions not simplifying but
  counter-factual
• E.g., assumption of rising marginal cost
  essential to model of perfect competition
• Empirical research finds most firms have falling
  marginal costs
• The overwhelmingly bad news here (for economic
  theory) is that, apparently, only 11 percent of
  GDP is produced under conditions of rising
  marginal cost. (Blinder et al., Asking About
  Prices, 1998 p. 102)

37
Within Economics Instrumentalism

• Blinders survey of firms
• only 11 have rising marginal costs
• 89 have falling or constant marginal costs
• Perfect competition cant work if marginal cost
  falls
• So how can assumption be irrelevant if theory
  depends on it?
• Assumption not simplifying but counter-factual

• Economic theory often fails instrumental test
• But instrumentalism has its own problems

38
Within Economics Instrumentalism?

• Instrumentalism doesnt describe how economists
  actually behave (including Friedman himself)
• All schools of thought do judge other theories on
  the basis of their assumptions
• Development of macro driven by desire to make
  macro consistent with assumptions micro
• Neoclassical economists criticise assumptions of
  other theories (Marxian, Post Keynesian, etc.)
• (Conventional Marxian) assumption of labor theory
  of value criticised by everyone from Bohm Bawerk
  to Samuelson
• Papers submitted to journals often criticised for
  not making conventional assumptions (rationality,
  etc.)
• If assumptions dont matter, these criticisms
  would be invalid

39
Within Economics Assumptions Do Matter!

• Neoclassical economists often reject other
  theories simply because of their assumptions
• E.g., Federal Reserve Governor Ben Bernanke on
  Minsky
• Hyman Minsky (1977) and Charles Kindleberger
  (1978) have argued for the inherent instability
  of the financial system but in doing so have had
  to depart from the assumption of rational
  economic behavior
• I do not deny the possible importance of
  irrationality in economic life however it seems
  that the best research strategy is to push the
  rationality postulate as far as it will go.
• Only reference to Minsky in Bernanke (2000),
  Essays on Great Depression, Princeton, p. 43

40
Within Economics Instrumentalism

• Logical consistency of assumptions has been
  challenged (Sraffa), not just realism (future
  lecture)
• Sciences do attempt to build theories which are
  essentially descriptions of reality
• Musgrave argues Friedmans significant theory,
  unrealistic assumptions position invalid
• Classifies assumptions into 3 classes
• Negligibility assumptions
• Domain Assumptions
• Heuristic Assumptions

41
Within Economics Instrumentalism

• Negligibility Assumptions
• Assert that some factor is of little or no
  importance in a given situation
• e.g., Galileos experiment to prove that weight
  does not affect speed at which objects fall
• dropped two different size lead balls from
  Leaning Tower of Pisa
• assumed (correctly) air resistance negligible
  at that altitude for dense objects, therefore
  ignored air resistance
• Domain assumptions
• Assert that theory is relevant if some assumed
  condition applies, irrelevant if condition does
  not apply

42
Within Economics Instrumentalism

• e.g., Newtons theory of planetary motion
  assumed there was only one planet
• if true, planet follows elliptical orbit around
  sun.
• if false planets relatively massive, motion
  unpredictable. Poincare (1899) showed
• there was no formula to describe paths
• paths were in fact chaotic
• planets in multiple planet solar systems
  therefore have collisions
• present planets evolved from collisions between
  proto-planets
• evolutionary explanation for present-day
  roughly elliptical orbits

43
Classes of assumptions

• Heuristic
• assumption known to be false, but used as
  stepping stone to more valid theory
• e.g., in developing theory of relativity,
  Einstein assumes that distance covered by person
  walking across a train carriage equals
  trigonometric sum of
• forward movement of train
• sideways movement of passenger

Then says We shall see later that this result
cannot be maintained in other words, the law
that we have just written down does not hold in
reality. For the time being, however, we shall
assume its correctness. (Einstein 1916)
passenger
0.9 c
train
0.9 c
lt 1.0 c
sum
44
Within Economics Instrumentalism

• Sun/planets example of the right way to use
  assumptions
• Assume influence of other planets negligible
• Then earth will follow elliptical orbit around
  sun
• Other planets (Jupiter, Saturn) not negligible
• Then elliptical orbit only applies in solar
  systems without large planets (domain assumption)
• Drop assumption of non-impact
• assumption heuristic device on way to more
  general theory
• 3-body problem no general solution possible
• Chaos theory explanation for planet orbits
• More realistic assumption, more accurate theory

45
Classes of assumptions

• Friedmans instrumentalism only valid with
  respect to negligibility assumptions, but
• often used by economists to defend domain
  assumptions
• or presented to students as if heuristic
  assumptions
• i.e., implied that more sophisticated models
  remove restrictive assumptions,
• when in fact more sophisticated models can
  involve even more restrictive assumptions
• example Sharpes Efficient Markets Hypothesis

46
Key assumptions of Efficient Markets

• In order to derive conditions for equilibrium in
  the capital market we invoke two assumptions.
• First, we assume a common pure rate of interest,
  with all investors able to borrow or lend funds
  on equal terms.
• Second, we assume homogeneity of investor
  expectations investors are assumed to agree on
  the prospects of various investmentsthe expected
  values, standard deviations and correlation
  coefficients described in Part II.
• Needless to say, these are highly restrictive and
  undoubtedly unrealistic assumptions.
• However, since the proper test of a theory is not
  the realism of its assumptions but the
  acceptability of its implications,
• and since these assumptions imply equilibrium
  conditions which form a major part of classical
  financial doctrine,
• it is far from clear that this formulation should
  be rejectedespecially in view of the dearth of
  alternative models leading to similar results.
• (Sharpe 1964 emphases added)

47
Just where are markets efficient?

• The Efficient Markets Hypothesis assume
• All investors have identical accurate
  expectations of future
• All investors have equal access to limitless
  credit
• Negligible, Domain or Heuristic assumptions?
• Negligible? No if drop them, then according to
  Sharpe The theory is in a shambles (Sharpe
  1970)
• Heuristic? No, EMH was end of the line for
  Sharpes logic no subsequent theory developed
  which
• replaced risk with uncertainty, or
• took account of differing inaccurate assumptions,
  different access to credit, etc.

48
Just where are markets efficient?

• When failure of theory addressed, even
  neoclassicals note role of false assumptions
• The attraction of the CAPM is that it offers
  powerful and intuitively pleasing predictions
  about how to measure risk and the relation
  between expected return and risk.
• Unfortunately, the empirical record of the model
  is poorpoor enough to invalidate the way it is
  used in applications. (Fama French 2004)
• Why? Because of unrealistic assumptions
• Sharpe (1964) and Lintner (1965) add two key
  assumptions to the Markowitz model to identify a
  portfolio that must be mean-variance-efficient.

49
Unrealistic assumptionsunrealistic theory

• The first assumption is complete agreement,
  given market clearing asset prices at t-1,
  investors agree on the joint distribution of
  asset returns from t-1 to t.
• And this distribution is the true onethat is, it
  is the distribution from which the returns we use
  to test the model are drawn.
• The second assumption is that there is borrowing
  and lending at a risk-free rate, which is the
  same for all investors and does not depend on the
  amount borrowed or lent
• The efficiency of the market portfolio is based
  on many unrealistic assumptions, including
  complete agreement and either unrestricted
  risk-free borrowing and lending or unrestricted
  short selling of risky assets. (Fama French
  2004, The Capital Asset Pricing Model Theory
  and Evidence, Journal of Economic Perspectives)

50
Within Economics Instrumentalism

• Some assumptions can be challenged for validity
• Risk as proxy for uncertainty (Keynes)
• Domain validity of Arrow-Debreu general
  equilibrium with risky but not uncertain future
• cannot apply in this universe
• Nature of fixed capital (Sraffa)
• Internal consistency of marginal productivity
  theory of income distribution (Sraffa/Garengani)
• Equilibrium as normal state of economy
• Statics equilibrium as long-run outcome of
  dynamic processes
• Linearity as valid approximation to nonlinear
  processes

51
Within Economics Instrumentalism

• Logic aside, Friedmans Instrumentalism still
  dominant in economics
• From critics point of view, simply a way to
  defend neoclassical theory from criticism
• From Lakatoss point of view, can be seen as
  protective belt hypothesis to shield hard
  core of neoclassicism from criticism
• Economics also has other schools of thought
• With different approaches to economic
  methodology
• Two main strands
• Post Keynesian methodological pluralism
• Critical Realism

52
Other Methodologies

• Post Keynesian School (Political Economy 200065)
• Reject neoclassical method in general however
• Methodological pluralism
• Horses for courses
• Realism
• Insist assumptions of models must be realistic
• Critical Realism (Political Economy 200065)
• Emphasises open nature of economic social
  systems
• Hard sciences based on closed systems
• Experiments can be replicated
• Social systems openevolve over time
• Social science must be more historical
  inductive in economic thinking
• versus neoclassical ahistorical, deductive
  approach

53
Postscript Even physics has its problems

• Physics the essence of hard science
• But issue of what is science? occasionally
  arise
• Generally only one paradigm
• Newton
• Newton/Maxwell
• But for whole of 20th century, two paradigms
• Einstein 1 relativitylarge scale
• Einstein 2 quantum mechanicsminute scale
• Models disagree at extremes
• Physics driven by desire to unite two
• Major issue general relativity gives theory of
  gravity (warping of time-space continuum)
• Quantum mechanics has no theory of gravity

54
Postscript Even physics has its problems

• About 20 years ago, new paradigm emerged
  string theory
• Matter not point-like with wave-particle
  duality (quantum mechanics, standard model),
  but
• Strings of vibrating energy far smaller than
  fundamental particles
• Different harmonies of string give different
  perceived particles
• Strings vibrate in 11-dimensional space
• Problems
• Energy levels needed to test theory enormous
  (billions of times current power levels)
• Attempt to replace messy Standard Model with 8
  parameters resulted in String Theory with 150
  parameters

55
Postscript Even physics has its problems

• Enormous number of potential universes
  predicted by theory (10 followed by between 500
  and 2000 zeros)
• No testable hypotheses after 20 years of theory
• Now there are critics asking Is this science?

56
Postscript Even physics has its problems

• More than twenty years of intensive research
  by thousands of the best scientists in the world
  producing tens of thousands of scientific papers
  has not led to a single testable experimental
  prediction of the theory.
• This unprecedented situation leads one to ask
  whether one can really describe superstring
  theory research as scientific research in the
  field of physics (p. 208)
• So even Physics can have
• Different schools of thought (competing
  Scientific Research ProgramsLakatos)
• Crises
• Disputes over whether what one school does is a
  science
• Emphasises importance of empirical testing in
  science

57
Other Methodologies

• Next week, the oldest non-neoclassical School of
  economic thought Marxian economics