Friday, February 7, 2014

The Pretense of Knowledge

[Approximate Reading Time: 15 minutes]
[Mood: Contemplative]

The greatest enemy of knowledge is not ignorance, it is the illusion of knowledge.” – Stephen Hawking

“The Pretense of Knowledge” is noted economist Friedrich A. Hayek’s Nobel Prize Lecture delivered at the ceremony awarding him the Nobel Prize in economics in 1974 in Stockholm, Sweden.

A friend sent me this gem of a speech a couple of months ago and I've been meaning to write about it since.

According to Wikipedia, Scientism is a term used to refer to a "belief in the universal applicability of the scientific method and approach, and the view that empirical science constitutes the most authoritative worldview or most valuable part of human learning to the exclusion of other viewpoints. It has been defined as "the view that the characteristic inductive methods of the natural sciences are the only source of genuine factual knowledge and, in particular, that they alone can yield true knowledge about man and society".

As much as economists want to believe that their field of study is amenable to the scientific approach, the truth is Economics is a social science that carries with it a certain fundamental complexity that renders it opaque to the otherwise penetrating eye of the scientist and the empiricist. Social sciences are not even sciences in the true sense of the word. Is political science really a science? How about history, civics, sociology, psychology or anthropology? And yet, they all fall under the rubric of "social sciences".

Hayek warns about the dangers of attempting to apply the scientific approach, which works wonders in the realm of the physical sciences, unquestioningly to social sciences such as Economics.

One of the ways in which scientism manifests itself in the modern world is through our willingness to narrow down the problem or a theory to such an extent that it rests on only the quantifiable aspects of the problem space. This happens when we either throw out key factors because they are not easily measurable or include irrelevant factors because they are easily measurable. Both of these practices appear to be common wherever the scientific approach is unquestioningly applied.

I'm reminded of a fable: The sun had mostly set when an old man walks home after a day's work. On the way, he sees a young man who seems to be looking for something on the ground under the lamp post. The old man stops and asks him if he needs help. The young man replies that he'd lost his keys. The old man asks where he was when he last had them and the man points to the fields off the street. "Then why are you looking here?", asks the old man. "Because this is where the light is!"

Scientism forces us to look where the light is because that's where all the measurable things are. Off in the fields, no light shines, nothing there is very measurable but that's where the keys are.

Hayek is articulate when he says, "there may thus well exist better "scientific" evidence for a false theory, which will be accepted because it is more "scientific", than for a valid explanation, which is rejected because there is no sufficient quantitative evidence for it." Scientific research in the social sciences is replete with this folly of scientism.

Interestingly, several Nobel prizes have been awarded in Economics over the decades to people who simply "showed" that Economics is not a science. The field of behavioral economics, according to Wikipedia, and the related field, behavioral finance, study the effects of social, cognitive, and emotional factors on the economic decisions of individuals and institutions and the consequences for market prices, returns, and the resource allocation. The fields are primarily concerned with the bounds of rationality of economic agents. Behavioral models typically integrate insights from psychology with microeconomic theory; in so doing, these behavioral models cover a range of concepts, methods, and fields.

What's going on here? This is what an economist must be telling himself: "we take a social study, turn it into a Science, realize that it's a little too complex because human beings are not completely "rational", and then we grant Nobel Prizes to those of us who tell us human behavior is a bit too complex for those formulas to work! In other words, our profession rewards those of its practitioners who simply remind the rest that human beings are not fully machines yet. But fear not, we're working toward that end too, toward an era when human beings are emotionless robots who process information like a computer does. Economics will then be a true Science, and rightfully so. But until then, those pesky little things called feelings can be studied by those of us who still like people. We affectionately call them behavioral economists."

In this context, the history of the Nobel Prize in Economics is also worth considering. According to Wikipedia, The Prize in Economics is not one of the original Nobel Prizes created by the will of Alfred Nobel in 1895. The Prize in Economics (as it is referred to by the Nobel Foundation) was established in 1968 and endowed by Sweden's central bank, the Sveriges Riksbank, on the occasion of the bank's 300th anniversary.

If it seems to you that the field of Economics has been vying to be included up there with the big brothers of natural sciences, with economists extending their hand to scientists in a "me too" fashion, you're on to something. Daniel Kahneman received the 2002 Nobel Prize in Economics for his work on the psychology of judgment and decision making. Kahneman, who is a psychologist, not an economist, applied his understanding of another social science, psychology, to economics. In their quest to be called true scientists, economists have inadvertently taken something called science that didn't fully apply to their field and twisted their very field of study so it can be studied in a scientific manner. And sometimes it takes a psychologist to remind them of what they are really studying. In his introductory book on World-Systems Analysis, Immanuel Wallerstein writes "the sciences denied the humanities the ability to discern truth":

Scientism, we learn, is over a hundred years old! Economists have been fighting to have their profession look more like a science for a very long time and by 1974, when Hayek made this speech, the implications and the dangers were becoming apparent, at least to Nobel Prize winners!

Scientism is not limited to Economics but has been a prevailing theme in other social sciences as well, as Hayek writes:

My debate on the Economics mailing list at Google summarized here appears to have been with some of those "impetuous younger members" that Hayek mentions above ;)

While Science has its uses, it's scope is rather limited when it comes to the vast footprint of the human experience. Unfortunately, much like an organized religion, it has taken over spheres of life that are not amenable to the approach not because these spheres are not fully formed and up to the mark but because of their very interrelated complex constitutions. It's as if we became addicted to equations and computer models after finding success in articulating the laws of motion or of aerodynamics while failing to realize that while they work well in the physical sciences, they can never describe the complexity of the human body or of an ecosystem. But instead of eschewing Science in these areas, we've set out to transform these areas themselves in order to fit them into the mold that Science can work with. The human body is hence increasingly treated as a machine, reducible to its parts, each with their own specialists who spend up to 15 years learning about them. Numerous book burnings in the early 20th century destroyed holistic and natural remedies and wisdom practiced up until then across the country in favor of a new chemical-based "modern" medicine based on "Science". E. Richard Brown explores the connection between medicine and capitalism in his 1979 book "Rockefeller Medicine Men".

The danger of our time is the overwhelming ease by which those who endeavor to control society do so by reshaping it with the help of those who believe in the power of Science. These "accomplices", as Hayek calls them, are all around us, in schools, in the workplace, in the corporate board room and just about everywhere the tentacles of science have spread, places where science shouldn't have gone. The trend continues today with the increasing emphasis on "STEM" education in schools around the world. STEM, an acronym for Science, Technology, Engineering and Mathematics, is a current priority of the capitalists who hope to ensure into the future, a competent workforce, the most scientistic generation ever.


The next time someone says, "there's not enough data to support what you're saying" or when someone points you to a formula on Wikipedia to measure human happiness, ask him if he isn't being a bit too scientistic :)


  1. Thanks for your post. I agree when studying economics that we made a lot of simplifying assumptions and wondered how our conclusions could still be valid.

  2. very fascinating speech, thanks for posting, and as always, your insightful comments. As someone with a degree in Sociology, I can relate to the weirdness in trying to prove things that are unprovable. Basically, the premise was always to ask a bunch of people the same question with a multiple choice answer, then draw scientific conclusions about a certain social group's proclivities based on those statistical results. I always thought it was really strange, not only because the framing of the questions is always going to be biased, but giving respondents only a certain menu of choices to pick from seemed to eliminate 99% of everyone's full humanity straight off the bat.

    And so it is with the "science" of economy, whose many flaws are pointed out here, but perhaps the biggest one being the omission of the ecological framework within which all economic transactions can and must happen. I guess you can base a science around how to best extract as many resources as possible, plunder the planet, and wipe out the very foundation that enables our existence, but that really is that crappy reductive science this post discusses.

    The good news is that there are some really good new economic models and theories that are much more holistic and sustainable than the linear exploitative snake oil economy so much of humanity has gotten hooked on. This article describes some good ones, like Herman Daly's steady state economics, aka ecological economy...

  3. "I always thought it was really strange, not only because the framing of the questions is always going to be biased, but giving respondents only a certain menu of choices to pick from seemed to eliminate 99% of everyone's full humanity straight off the bat."

    Couldn't agree more. People, unlike machines, are complex and can't be categorized into boxes with solid walls. Even computing has changed since we realized that many times, things are not binary, not black and white and cannot be put into boxes with any significant confidence. "Fuzzy logic" is used everywhere from rice cookers to spacecraft. Why do we continue to treat human beings like machines even as we make machines work more like human beings? Here's a way to explain Fuzzy logic that I found online: it is based on the theory of fuzzy sets, where an object’s membership of a set is gradual rather than just member or not a member. Fuzzy logic uses the whole interval of real numbers between zero (False) and one (True) to develop a logic as a basis for rules of inference. Particularly the fuzzified version of the modus ponens rule of inference enables computers to make decisions using fuzzy reasoning rather than exact.

    In this regard, the developments in American schooling are interesting. Why are we moving toward more standardized testing for K-12 students?

    Thanks for the alternet article! It's high time economists considered the role of ecology. I have mixed feelings about assigning a monetary value to ecology because breaking down the ecology into pieces to carry out such an exercise tends to devalue the entire ecology as a whole. This, of course, is the old reductive approach we had been applying to the physical sciences and have been mis-applying to other fields. Valuing ecology is like valuing happiness: it doesn't work. The sum is always more than the parts. It doesn't make sense to say the value of the Nile is 2 Billion USD. I think we need a more fundamental shift in thinking that takes into account the interrelatedness and interconnectedness of everything in nature and ecology. So hopefully, economists will continue to challenge convention, as the article indicates they're doing, and keep moving toward where we need to be in this time of mass ecological collapse. We wouldn't be too early if we start tomorrow!.

  4. Speaking of "In this regard, the developments in American schooling are interesting. Why are we moving toward more standardized testing for K-12 students?"

    My friends who have been Junior High School teachers for over 20 years told me the other day that schools across the US are now more and more being mandated to have kids use ipads and have contracts with google to do all their school work on the google cloud. From an interview with Joel Klein (, one of the tech pushers:

    "Think about a kid who's sick at home, who can't get to class, can now, literally, dial in and experience a class."

    Isn't the point of being sick to be at home and rest? This kind of attitude, presented as a positive, reveals just how insane we've become and how the tech industry has imposed itself on every aspect of our lives, beginning earlier and earlier.

    My teacher friends are very suspicious that this is just another plot to sell more gadgets. Imagine the profitability, having a guaranteed new wave of customers every year!

    There's some pushback ( but just as with everything else tech-related it's a losing battle. Kids will be served up tablets, probably a new one every year or two, and every word they write will be recorded on a private corporation's server. As the leaders of The Circle would say, "the circle is almost complete."

    And yes, I do agree with your assessment that valuing ecology ultimately doesn't work. However, we as a society are so far from comprehending that, that I feel like the idea of an ecological economy may be a stepping stone. If we can get people to at least recognize the destruction we're causing in terms of cost, there would be much more of a basis for even considering a more fundamental shift.

  5. Mr. Joel Klein seems to be emblematic of those who go through the revolving doors of government and industry to push agendas handed over to them from their bosses. From Wikipedia: "He was the Chancellor of the New York City Department of Education, the largest public school system in the United States, serving more than 1.1 million students in more than 1,600 schools." Now, he's the CEO of Amplify, a subsidiary of News Corp. So he works for Rupert Murdoch.

    Michelle Rhee comes to mind as another of the same cadre. From Wikipedia: "In 2007 the D.C. board of education was stripped of its decision-making powers and turned into an advisory body, and the new office of chancellor was created—so that changes in the public school system could be made without waiting for the approval of the board. Newly elected D.C. Mayor Adrian Fenty quickly offered Rhee the job of chancellor; she accepted after being promised mayoral backing for whatever changes she wanted to make. Critics noted that Rhee had no experience running a school system, and had not even been a principal. She had been highly recommended to Fenty, however, by Joel Klein, the Chancellor of the New York public schools."

    They're smooth-talking and don't ever say anything we would disagree with while at the same time pushing their agenda past any critical voices. Klein says, "If this is not better for kids and teachers, we shouldn't do it." Well, of course!

    There used to be a time when almost every major in college graduated people that were readily absorbed into industry. A creative English major would find work in the PR industry. Anthropology majors were used to advance civilization's borders at the frontiers to unsuspecting indigenous peoples. Sociologists were helpful in re-structuring society. Economists were helpful in advancing capitalism and providing a scientific rationale for exploitation. Today, however, these majors are not being emphasized as much. The focus is on STEM because the future workforce will be more about scientists, technologists, engineers, mathematicians, chemists, biologists, physicists, etc. Lucky for the powers that be, children can be more effectively trained in these subjects with the help of technology. It's relatively easy to make a video game that helps kids learn about Newton's laws, or calculus, or cell division, or the exponential function. Gadgets like tablets also remove an unnecessary layer between the agenda setters and the students: the teacher. A course designer or a game designer has direct access to each individual student and his/her performance and progress. The teacher is retained as a functionary of a system that's designed to prepare the technological workforce of the future. Pedagogy is altered to meet certain very specific ends.