My Reply to David Wilson on Hayek & the Use of Mathematical Population Biology Models in the Social Sciences (draft)

David Wilson has asked me to read his discussion of Hayek and the growing literature on multilevel selection modeling and the wider literature of human cultural evolution. This is my reply which I hope he will welcome in the spirit of filling the gap in the literature on “the sphere of economic thought centered on Hayek and the modern study of cultural multilevel selection.”  My discussion will also engage his lecture (listen here) on Hayek and multi-level selection delivers before Peter Boettke’s F.A. Hayek Center for Advanced Study in Philosophy, Politics, and Economics at George Mason University.

Let me begin by saying that I admire his work, and I have read the literature in which he works for over 35 years with great interest, stretching back to the pioneering work of Richard Alexander, which I encountered almost concurrently with my encounter with the work of Hayek.  My own background is in the philosophy of biology and scientific explanation, working with Alex Rosenberg and Larry Wright, which has involved studying most of the foundational work in the history and philosophy of biology, including that of Wilson’s colleague Elliott Sober.  I have also constructed a functioning selection model of cultural evolution in which individual behaviors creating group-exhibited properties give selective advantage both to the individual vis-a-vis individuals not displaying the behavior and vis-a-vis species which do not display the group property, as in the case of schooling behavior by individual fish and the fish species to which they belong.

Let me suggest that the crucial first step in “bridging the gap between Hayek and cultural multilevel selection” is simply this:  o identify and remove a host of false conceptions and mythologies found in Wilson’s discussion concerning both (1) the domain of Hayek’s work and (2) the domain of evolutionary and selection explanations.  Let me go through a list of these false conceptions and unhelpful mythologies.

  1. “Hayek Crossed a Continental Divide in the Landscape of Economic Thought”

Hayek actually did TWO things.  Hayek (1) resurrect the pre-20th century world of the enlightenment where thinking about social institutions involved combinations of both evolutionary thinking and economic thinking. And Hayek (2) showed how these elements made sense only in light of an empirical undesigned order problem seen already in the 18th century, fleshed out and put into an powerful explanatory frame involving the causal mechanisms of learning in the context of changing individual understandings of local conditions and prices relations, following negative rules of conduct like “no stealing”, and using the pure logic of choice as a window on global economic plan coordination.

David Wilson suggests that there existed a “continental divide” between two elements (1) The Age of Reason / The Physics of Social Behavior; and (2) Evolutionary Biology, which Hayek “crossed”.

In fact, Hayek developed as a scholar steeped in the work of Carl Menger, Friedrich Wieser, Ernst Mach, and a number of other continental thinkers, all of whom never bought into many elements of “The Age of Reason / The Physics of Social Behavior,” and all of whom combined economic and evolutionary elements in their explanatory paradigms, accounting for the growth of knowledge, institutions, and human flourishing.

So the “continental divide” identified by Wilson didn’t exist for Hayek as a budding scientist. What is more, Hayek went back and showed that many important enlightenment thinkers working in social theory rejected modern conceptions of “The Age of Reason / The Physics of Social Behavior” as became prominent especially in the 20th century, and these thinkers combined economic, competitive and evolutionary conceptions in their explanatory paradigms matched with undesigned order problems fully compatible with the later Darwinian vision, a vision which Hayek shows was itself derived and inspired in large measure from economic, competitive and evolutionary conceptions from social theory.

Hayek points out, for example, that John Locke had a socially evolutionary conception of “reason” and rejected what Hayek often referred to as a “French” conception of reason.  Hayek points out that Darwin’s branching tree conception of historical evolution by descent derives from the linguistic work of William Jones. Hayek points out that Adam Ferguson, Bernard Mandeville, Rene Descartes, David Hume, and Edmund Burke identified social institutions and structures which were the product of a multitude of human behaviors across time but were not the result of any one man’s intentional design.

And of course the work of Thomas Malthus on scarce resources, declining marginal utility and competition for goods was the direct inspiration for the Darwinian paradigm itself.

Hayek also does something very similar to what Ernst Mayr does in his book The Growth of Biological Thought, Hayek shows how conceptual roadblocks fixed in the very terminology of Greek thought block space for a domain of ordered phenomena between the intentionally designed and the physically regular. Hayek shows how Greek conceptions block room for undersigned order thinking in social theory and Mayr showed how Greek conceptions of types, kinds and concepts blocked the notion of change across time in biological categories like species and adaptive features.

So right here we identify a meaty, fruitful and substantive “gap” area significant for exploring the character of economic, selective and evolutionary undesigned order explanations — and how those have been blocked by the intellectual traditions stretching back to Greek thought.  There is a great deal on the plate here in Hayek’s work, from his rejecting of justificationalism in epistemology to his Wittgensteinian rejection of rationalistic Platonic or Fregean pictures of conceptual significance, work that could be enriched with connection to David Hull’s work on concepts as historical individuals. This work could also be connected to Hayek discussion of the problematic and misleading nature of God’s Eye View models of social phenomena, work directly linked to Ludwig Wittgenstein’s work on this same topic.  David Hull’s discussion of the problematic man-many relation between phenotype and genotype would also be of significance here, directly related to Hayek’s account of the many-many problem of brain classification and perceptual categories.  There is a lot to think about here.  Anyone wanting to “fill the gap” needs to do so.  And the issues involved only get started with these topics.

There is massively more to be said about how Hayek never began within a “continental divide”, how Hayek established that no such “continental divide” existed in much of the best of enlightenment social theory, and about how Hayek replaced the mistakes of “Age of Reason / The Physics of Social Behavior” social science as it came to dominate 20th century economic thought, even as Hayek provided crucial new components to the formalization and mathematization of the pure theory of choice and the equilibrium construct.  More importantly, their is the central story of how Hayek managed to recast economics as a science originating in an empirical undesigned order problem, and the role of the pure logical of choice and equilibrium constructs in our conception of that problem, and the relation of these to the central causal mechanisms accounting for plan-like social coordination (1) changes in individual understanding in the context of changing local conditions and relative prices; and (2) inherited negative rules of just like rules against lying, stealing, and breaking contracts.


Posted in Tweets | Comments Off on My Reply to David Wilson on Hayek & the Use of Mathematical Population Biology Models in the Social Sciences (draft)

Books — Expand On Your Hayek, Expand On Your World

Friedrich Hayek’s work opens a world of ideas and historical events. Read more:

The Road to Serfdom / Stalin, Hitler / Totalitarian Societies

Institutions / Culture / Evolution / Competition

Intellectuals / Economists / Experts

History of Ideas / Philosophy

Britain / British Labour / Thatcher

Mont Pelerin Society / Revival of Liberalism

Vienna / Austria

Business Cycles / Financial Crisis / Monetary Policy

Liberalism / Conservativism / Classical Liberalism

Socialism / Central Planning 


Neuroscience / Mind & Brain

Prices / Market Mechanism / Competition


European History 1900-1950

Marginal Valuation Applied to Production Goods

Posted in Books | Comments Off on Books — Expand On Your Hayek, Expand On Your World

Logic versus empirical problems and causal processes — Hayek’s revolution

Economists do not understand Hayek.

They simply don’t.

I want here to explain in simple terms what economists don’t get, and what they would grasp if they were to ever understood what Hayek is doing.

Thomas Kuhn explains how roadblocks to explanatory success, and conceptual novelties inspired by explanatory failure, providing new avenues to understanding, open the way to new explanatory strategies and success.

Here is what Hayek does. Hayek identifies roadblocks to explanatory success in economic science, and then he recasts the explanatory problem and explanatory strategy of economics to overcome these roadblocks. He achieves a new understanding of the science of economics which solves old problems and puts is on a secure logical foundation.

If we think about how economist have locked themselves into a titanium box inherited from an old tradition of what “knowledge” demands and what “science” must look like, then we can grasp why economists haven’t yet begun to see what Hayek has achieved.

To get from the current state of non-understanding to a position of understanding, we need to sketch out a few things, and then show how they are related to one another.  We need to sketch out the old picture of what “knowledge” and “science” must be, and how that formed into a powerful central dogma. We need to identify the roadblocks to explanatory coherence and success which economics faced over the last century, and how those problems came to a head in the work of Friedrich Hayek on prices, production goods, trade cycle dis-coordination, and in the economics of socialism. We need to talk about how the false dogma of what “knowledge” and “science” demand has shaped economics, and how that dogma contributed roadblocks to explanatory coherence and success in economics.  Finally, we need to show how Hayek overcame these roadblocks to explanatory success my recasting the explanatory problem and explanatory solution set in economic science, braking away from old fallacies and dogmas once set in concrete among economists and philosophers.

Here is what we are going to learn.

We are going to learn that Hayek’s research project was dominated by a closely related set of conceptual problems, all of which had been running into conceptual roadblocks. Among other thinks, Hayek was working on extending the pure logic of choice, also known as the pure calculus of marginalist valuation, from the case of multiple consumption goods to the case go multiple production goods. Hayek was also working on the problem of using the pure logic of choice to understand what is happening when the economy cycles from boom phases to bust phases. Closely related to both problems, Hayek was working on the problem of using the calculus of marginalize valuation to rethink what classical economists had said about the distribution of income and the nature of money and interest, problems which were interrelated through pre-marginalist theories of profit, interest, and capital.

We are going to learn that the a false image of “knowledge” and “science” dominates the imagination of economists, a false image derived from 19th century German economists and philosophers, ultimately grounded in false ideas derived from the Greeks.  Hayek challenges and smashes this false image, combining his revolutionary work in neuroscience and epistemology with insights derived from David Hume, Carl Menger, Karl Popper, and Ludwig Wittgenstein, among others.  Hayek marshals his new thinking in a process of re-casting the explanatory problem and explanatory mechanisms of economics, making use of a constellation of new ideas and forgotten explanatory achievements from the past.


Posted in Explanation | Comments Off on Logic versus empirical problems and causal processes — Hayek’s revolution

How economists have blinded themselves with their math constructions

Hayek’s multi-dimensional normal science research project, tackling the relation between the new marginal valuation logic and the old problem 0f distribution theory  (among several other problems) opened Hayek’s eyes to how the math construction of economics had blinded economists to the central problems, structures and causal processes of the market economy.  What I will do here is explicate where and how economists, according to Hayek, have been blinded to the problems, structures and causal processes of the market economy by the formal constructions and the false philosophical pictures which mandate the particular ways that economists feel compelled to think about these constructions.

“there can be no doubt that for the understanding of the dynamic processes [the discussion of ‘capital’ in terms of some single magnitude] was disastrous.” (Hayek, 1941/2007, p. 33)

“the doubtful meaning of equilibrium analysis .. if applied to the conditions of a competitive society.” (Hayek, 1937/2014, p. 61)

“My criticism of the recent tendencies to make economic theory more and more formal is not that they have gone too far but they have not yet been carried far enough to complete the isolation of this branch of logic and to restore to its rightful place the investigation of causal processes.” (Hayek, 1937/2014, p. 59)

“the sense in which we use the concept of equilibrium to describe the interdependence of the different actions of one person does not immediately admit of application to the relations between the actions of different people.” (Hayek, 1937/2014, p. 61)

“What seems so far to have escaped notice is that this whole procedure involves a confusion of a much more general character .. which is due to an equivocation of the term ‘datum.” The data which here are suppose to be objective facts and the same for all people ware evidently no longer transformations of the Pure Logic of Choice. There ‘data’ meant those facts and only those facts, which were present in the mind of the acting person, and only this subjective interpretation of the term ‘datum’ made those propositions necessary truths.” (Hayek, 1937/2014, p. 62)

“‘Datum’ [in the Pure Logic of Choice] meant given, known, to the person under consideration. But in the transition from the analysis of the action of an individual to the analysis of the situation in a society the concept has undergone an insidious change of meaning.” (Hayek, 1937/2014, p. 62)

“in the usual presentations of equilibrium analysis it is generally made to appear as if these questions of how the equilibrium comes about were solved. But, if we look closer, it soon becomes evident that these apparent demonstrations amount to no more than the apparent proof of what is already assumed.”  (Hayek, 1937.2014, p. 68)

“The assumption of a perfect market [in the sense that if people know everything they are in equilibrium] is just another way of saying that equilibrium exists but does not get us any nearer an explanation of when and how such a state will come about.” (Hayek, 1937/2014, p. 69)

“The statement that, if people know everything, they are in equilibrium is simply true because that is how we define equilibrium.” (Hayek, 1937,2014, p. 68-69)

Blinded by math theories of the “monetary economy”

“Monetary theory should .. study those phenomena which distinguish the money economy from the equilibrium inter-relationships of barter economic which must always be assumed by ‘pure economics’.” (Hayek, 1929/1931/2012, p. 102)

“All these theories .. are based on the idea — quite groundless but hitherto virtually unchallenged,

“In complete contrast to those economics changes conditioned by ‘real’ forces, influencing simultaneously total supply and total demand, changes in the volume of many have, so to speak, a one-sided influence which elicits no reciprocal adjustment in the economic activity of different individuals.” (Hayek, 1929/1931/2012, p. 104)

“As a theory of these one-sided influences, the theory of monetary economy should .. be able to explain the occurrence of phenomena which would be inconceivable in the barter economy, and notably the disproportional developments which give rise to crises.” (Hayek, 1929/1931/2012, p. 104)





Posted in Tweets | Comments Off on How economists have blinded themselves with their math constructions

Mach, James and Russell

There is an important new book on some of the theorists who helped inspire and deeply influenced Hayek’s work in the theory of mind, knowledge and brain:

The Realistic Empiricism of Mach, James, and Russell: Neutral Monism Reconceived by Erik Banks

Posted in Sensory Order | Comments Off on Mach, James and Russell

Tautologies, empirical problems and causal explanations — Hayek’s 1936 revolution

By the happenstance of family, Hayek became one of the first ever to read Ludwig Wittgestein’s landmark Tractatus Logico-Philosophicus. Wittgenstein manages to tie the phenomenological positivism of Ernst Mach and Bertrand Russell to the new logic of Gottlob Frege using a procedure which isolates the purely formal and logical from the domain of the empirical or psychological in a manner that the neo-Kantian’s like Hermann Cohen could only have dreamed.  In the process, Wittgenstein manages to distinguish between the realm of the tautological and realm of the contingent in precise and formal terms.

We have something new here.  Curiously enough, Wittgenstein’s technique is very similar to that of Friedrich Wieser.  Wittgenstein takes a God’s Eye View of the realm of logical relations and the realm of the empirically contingent. From this God’s Eye View, truth values determined by the empirically contingent are “given” to one mind, stipulated by the logician laying out logical relations before his mind’s eye.  Hayek, working with Wieser’s Dictator model of perfectly coordinated economic relations, was doing essentially the same in attempting to work out the logic of marginal valuation, not only as it applies to a given set of consumer goods at one moment in time, but as that logic applies to dynamic alternative production and consumption plans and possibilities across time.

When we point out the truth that, “if A implies B and B implies C, then A implies C” we are not saying anything about the contingent arrangement of the world, we are stating a fact about conceptual relationships, as our mind orders them. When we lay out the logic of marginal valuation, in conceiving choices between alternative uses of a basket of goods like apples, we are not saying anything about the contingent arrangement of the world, we are stating a fact about conceptual relationships, as our mind orders them.  Our last use of a apple we can imagine as less valuable than the first use, and the loss of any particular apple means giving up that last and least valuable use, and not the first and most valuable use.  Whether we are right in imagining the apples to actually exist in the form and for the utility we take them to have is irrelevant to the logic of the situation.  (See Carl Menger, Principles of Economics).

Hayek’s work isolating the nature and dimensions of the purely logical helped to him to identify a number of other elements — the multiple dimensions of the domain of the empirical and the causal.  What Hayek discovered was that there were several different and important types of problem-raising empirical problems in economics, and several different dimensions to the causal and empirical domains of economic explanation.

Hayek first begins to run into these insights in his 1929 book and his solution crystallized in 1936 while listening to Frederic Benham make fun of how economists reassured themselves with the pleonasm “given data” which translating the Latin in effect is saying nothing but the “given given”.  It is important the emphasize that this insight is already contained in Hayek’s 1929 book, complete with discussion of the difference between the fictional “data” of the pure logic of choice and the empirical patterns and prices signals in the real world.

Hayek’s idea of prices conveying information, and prices as imperfect communicators of market conditions can already be found in the work of Charles Hardy, 1923, and quoted by Hayek in his 1929 book.

Here is the passage from Hayek’s book:

“[Hardy] states that all those theories which are based on the length of the production-period under modern technical conditions agree in regarding these conditions as a source of difficulty to producers in adjusting production to the state of the market — producing, as they must, for a future period, the market possibilities of which are necessarily unknown to them. He then emphasizes that in general it is the task of the price-mechanism to adjust supply to demand; he thinks, however, that this mechanism is imperfect, if a long period has to lapse between production and the arrival of the product at market, because “prices and order give information concerning the prospective state of demand compared with the known facts of the present and future supply, but they give no clue to the changes in supply which they themselves are likely to cause.”” (Hayek, 1929/2012, 86)

Hayek in 1929 is already highlighting the insight of Mises on the guide function of profit calculation and is already bringing attention to the guide function of relative prices, and he is already pointing out that economists are being misled by their formal constructions, misunderstanding what is logically “given” in their formal constructions is not and can never by “given” to entrepreneurs adjusting there plans in the market:

“But the entrepreneur in a capitalist economy is not — as many economists seem to assume — in the same situation as the dictator of a Socialist economy. The protagonists of this [dictator]. The protagonists of this view seem to overlook the fact that production is generally guided no by any knowledge of the actual size of the total demand — even if that phrase is sometimes used — but on the basis of a calculation of profitability; and it is just that calculation which will equilibrate supply and demand. ” (Hayek, 1929/2012, p. 87)

Hayek in this same discussion also identifies one of his key empirical problems — what mechanism could possible generate systematic discoordination across market via systematically erroneous plans and anticipations:

“None of these theories under discussion [eg Hardy’s] explains why why these expectations should generally prove incorrect.” (Hayek, 1929/2012, p. 87)

Hayek’s memory in the 1970s: “One of my colleagues at the London School of Economics used to make fun of the use of ‘data’ by economists, who were so anxious to assure themselves that there were data that the were talking about ‘given’ data. This talk of about ‘data’ made me aware, of course, that they are completely fictitious; that we are assuming that these facts are ‘given’, but never say to home they are ‘given’. This made it clear to me that the whole economic problem is a problem of the utilization of knowledge which nobody possesses as a whole, and that determined my outlook on economics and proved extremely fertile.” (Hayek, 1983, p. 274)

“I have long felt that the concept of equilibrium itself and the methods which we employ in pure analysis have a clear meaning only when confined to the action of a single person.” (F. Hayek, “Economics and Knowledge” 2014, p. 59, see also F. Hayek, The Pure Theory of Capital, 2007, pp. 49-50).

“But the entrepreneur in a capitalist economy is not — as many economists seem to assume — in the same situation as the dictator of a Socialist economy.  The protagonists of this view seem to overlook the fact that production is generally guided not by any knowledge of the size of the total demand, but by the price to be obtained in the market. In the modern exchange economy, the entrepreneur does not produce with a view to satisfy a certain demand … but on the basis of a calculation of profitability; and it is just that calculation which will equilibrate supply and demand.” (Hayek, 1929/2012, p. 87))

An empirical pattern needing explanation — systematically misallocated goods and systematically discoordinated relative prices and production structures.

“None of the theories under discussion explains why these [price and profit] expectations should generally prove incorrect. (Hayek, 1929/2012, p. 87))

“the problem of the division of knowledge .. seems to me to be the really central problem of economics as a science” (Hayek, 1937/2014, p. 72)

“the economic calculus which we have developed to solve this logical problem [assuming we have all of the relevant information required to construct a rational economic order] does not provide an answer to [the economic problem which society faces]” (Hayek, 1945/2014, p. 93)

Empirical task of trade cycle theory to explain systematic deviations from pure coordination of equilibrium theory/logic of choice

“It is .. the task of Trade Cycle theory to show under what conditions a break may occur in that tendency towards equilibrium which is described in pure analysis — i.e., why prices, in contradiction to the conclusions of static theory, do not bring about such changes in the quantities produced as would correspond to an equilibrium situation.” (Hayek, 1929/2012, p. 88)



Posted in Knowledge Problem | Comments Off on Tautologies, empirical problems and causal explanations — Hayek’s 1936 revolution

1936 And All That — Hayek’s Copernican Revolution in Economics

Earlier I outlined Hayek’s normal science research program and I began to suggest how anomalies developed in that program, conflicts arose with others working on those same normal science puzzles, and how these anomalies and conflicts set Hayek on the path toward his Copernican Revolution in the explanatory strategy of economics, first described in his 1936 essay “Economics and Knowledge” and then continually developed across the length of Hayek’s long life.

There are a number of ways in which Hayek’s background was unique, differences in his background which prepared Hayek for his Copernican Revolution which was missing in the background of other economists working on Hayek’s normal science puzzles.

Among these differences are:

1. As a young somewhat Fabian socialist once enchanted by technocratic War Socialism, Hayek was exposed to and was profoundly changed by Ludwig Mises’ argument exposing the impossibility of economically relevant calculation within an extended socialist society.

2. Hayek was mentored by the great Viennese economist Friedrich Wieser, and was deeply steeped in Wieser’s Dictator conception of a perfectly coordinated extended economy, using the logical assumptions of the 1870 marginalist revolution in economic valuation theory.

3. Hayek had been soaking for years in the problem of making sense of the logic of choice applied to production goods, especially in the the work of Bohm-Bawerk, Wieser and their students on this problem. It was a research program essentially absent in the rest of the world.

4. Hayek had a sophisticated and indeed revolutionary grasp of the new epistemology and logic descending from the neo-Kantians, positivists, and Fregean logicians, which was shaping the imagination of everyone working in the fields of history, social science, and economics (within economics, see for example, the work of Weber, Pareto, Schumpeter, Wald, Mises, Hutchison, Samuelson, among endless others).

5. The origin of Hayek’s understanding of economic science came via his study of the work of Carl Menger including Menger’s work on the scientific character of the domain, and during the period of Hayek’s normal science problem difficulties Hayek just happened to be editing Menger’s Collected Works.

Let me say more about each of these elements and how each of them are implicated in Hayek’s Copernican Revolution.

When Hayek was working on the problem of integrating the logic of marginal valuation into the explanation of business cycle fluctuations, while at the same time vindicating the scientific status of this endeavor, what Hayek ran into was the fact that deviations from economic coordination seem by necessity to be the produce of systematically misleading price signals, patterns outside of a perfectly coordinated system of marginal valuation mapped by a pure logic of choice.

It’s important for us to see how Hayek’s insight here hooks up with his normal science research program and with Hayek’s unique background outlined just above.  The insight contained in Mises’ work on socialism and calculation is the insight that our ability to calculate money costs and adjust our affairs in terms of money profits and loses is a calculation process that would be absent from an extended global socialist society, and in no way could we replace that money calculation system with any sort of calculation system using magnitudes available in the world of physical, chemical or biological quantities or properties, and the pure logic of marginal valuation can not be made to step in to replace the system of monetary calculation.

What Hayek began to develop in his 1929 book on business cycles and monetary economics is the coming together of the insight that market coordination is made possible by coordination in terms of price signals, and that signals that can sometimes be systematically misleading.  But the added element found in Hayek’s work and missing in the work of most others is that fact that this coordination process works through the structure of inter-related production processes taking more or less time, and that this coordination process can by systematically misdirected in vectors of discoordination related to changes in the supply and liquidity of money, credit, financial instruments and their complex value interrelations with production goods and processes across time.

But there is an added element here in Hayek’s work which is absent from that of other economists working on the problem of explaining the business cycle and hooking that explanation up with the rest of economics.  Hayek had a grasp of the logic of choice over production goods missing from the work of others.  There is a time coordination problem related to the fact that extending or shortening production processes can change the valuational outcome of those processes, allowing a choice between superior or inferior output alternatives, e.g. you can have bitter grape juice now or excellent wine later.

Hayek’s clash of ideas with Keynes, Knight, and endless others begins and largely ends right here, in a clash of visions which has gone over the heads of most economists for generations.  But we will get down into weeds of the details further on in our investigation.

In Hayek’s 1929 he is struggling with the normal science problem of fitting together the standard equilibrium plus valuation logic approach to explaining economic patterns with the demands of what those in the post Hume and Kant era took science to be. Central here are two neo-Kantian insights into the nature of science, experience and human understanding, first, Hermann Cohen’s neo-Kantian conception of strict division between the realm of the formal, the deductive and the logical, and the realm of the psychological and the contents of experience, and, second, Wilhelm Windelband’s distinction between the realm of the nomological and the realm of the historical, interpretive, and the ethical, which is to say the realm of human culture and individual doings.  The neo-Kantian picture of science, which shaped the understanding even of the various schools of empiricism, was the idea that science was the realm of laws, necessity, and formal concepts, while society and the human and interpretive domain was a kind of unfolding biological growth.

No one had yet successfully connected together what might be called the deductive ideal conception of science with the domain of empirical experience — and Hayek in 1920 had already refuted what would become in the first half of the 20th century the leading philosophy of science research program, the Recieved View of Theories combining the logic of Ludwig Wittgenstein’s Tractatus with the predictive phenomenalism of Ernst Mach’s positivism.  And matters were even worse in economics and the social sciences. Joseph Schumpeter was attempting to combine Mach’s positivism with the mathematization of the logic marginal valuation and the new statistics of what would become econometrics and national income accounting, a program continued by Schumpeter’s student Paul Samuelson, in a project even Samuelson admitted completely failed on its own terms as a normal science research program.

What Hayek had done in 1920 was use his experience in the brain lab of Constantin von Monakow to rethink the connection between realm of the phenomenal and the real of physical things outside ourselves as outlined in the work of Alois Riehl, in light of the fact that that connection must be a product of the network of neuronal cells Hayek had been staining in Monakow’s research lab.

Hayek’s insight looking at the problem from the bottom-up in the network of neuronal connections, rather than from the top-down in the relations between phenomenal particulars, was the Mach and the positivists have everything precisely backwards, and that our empirical grasp of the world outside ourselves could not be modeled as no more than and economical function fitting nomological laws to connected relations between phenomenal “givens”.  And Hayek connected his insight together with the research coming out of the psychology labs showing that perception was theory-laden and our understanding of the world was shaped by our expectations, by our sensory mechanisms, and by our biological and even cultural backgrounds.

What Hayek came to see via his background in biology, brain science, psychology and the work of Carl Menger — plus his work on the empirical problem of business cycles — was that problems generated by empirical patterns in our experience could be explained by underlying causal mechanisms that did not fit the conceptual demands for ‘science” stipulated by the neo-Kantians and the empiricists working within the legacy of Hume, Kant, Cohen and Windelband.

As Hayek would explain decades later, the empirical pattern of the origin of species with adaptive features gives us a problem raising empirical pattern with multiple possible explanatory solutions, including the top-down causal mechanism of special creation by a designer and the bottom-up mechanisms of natural selection. Similarly the patterned structure of our sensory perceptions and our ability to learn across time presents an empirical problem with a bottom-up solution in the connections made and broken, and strengthened and weakened between neuronal cells, a program laid out and advanced over the past decades by Hebb, Hayek, Fuster, and Edelman, among many others.

What Hayek has acquired via multiple channels is a grasp of the inadequacy of a top-down, God’s Eye View approach to understanding and explaining the problems we confront and develop in our attempt to make sense of the world.  A grasp of the inadequacy of what Larry Wright calls The Deductive Ideal, an inadequacy later developed in the work of Ludwig Wittgenstein, Thomas Kuhn and by Larry Wright himself.

Hayek 1936 paper “Economics and Knowledge” is all about the escape from the neo-Kantian legacy and deductive ideal, and the re-casting of economic science into the sort of explanatory paradigm already pioneered in brain science, Darwinian biology, psychology and other complex sciences.


Posted in Tweets | 1 Comment