IQ and the wealth of nations

Jason Richwine reports on Robert Putnam’s reluctant finding that “the more ethnically diverse a community is, the less social capital it possesses” and suggests that our immigration policies should be altered in favor of preferring skilled immigrants with high IQ’s because

higher IQ people appear to be more morally sophisticated, altruistic, and forward-looking. They exhibit higher levels of civic participation, more strongly adhere to middle-class behavioral standards, and cooperate more readily. This evidence, taken as a whole, confirms that intelligence and social capital are strongly related.

From this perspective, contemporary American immigration policies tend to produce the opposite result. The emphasis on family reunification, “human rights”, diversity, and protecting American workers produces a situation where highly educated people face formidable obstacles to (permanently) relocate to the US.  These “dysgenic” effects are further reinforced by the existence of massive entitlement programs which weaken the link between productivity and rewards.

Karl Popper and Rudolf Carnap Revisited

In his classic book Significance and Basic Postulates of Economic Theory (1938) Terence W. Hutchison  makes the case for economics as an empirical science.

An interesting aspect about this book is the ease with which Terence W. Hutchison uses logical empiricist authors like Moritz Schlick, Rudulf Carnap, and Otto Neurath but also the “critical rationalist” Karl Popper in making his case for the testability of economic theories.

On a number of occasions Rudolf Carnap himself has drawn attention to Popper’s habit of exaggerating the differences between his work and the logical empiricists. Historians of philosophy, or at least those with little training in the philosophy of science, have often followed Popper in his views while ignoring the quite substantial agreements between the logical positivists and Popper on topics such as the unity of scientific method and their common objective to find criteria to distinguish science from other activities.

In hindsight, Popper’s compulsive need to distance himself from the logical positivists has harmed his own project more than he could have anticipated. The traditions of thinking and social inquiry that Popper railed against, and hoped to defeat by his non-justificationist philosophy and falsification criterion, were often identified as problematic by the logical positivists as well. It is rare to find a philosopher or social scientist dealing in obscurantism and anti-empiricism who rejects logical positivism but praises Karl Popper’s demarcation between science and non-science and his views on falsifiability.

But until the dominant reception of logical empiricism as a monolithic enterprise with little more to offer than its verification principle persists it is doubtful that the broader concerns of Rudolf Carnap and Karl Popper will receive the attention they deserve. A promising start would be for philosophers to seriously engage with the work of Carnap instead of judging it on the basis of Karl Popper’s views. For example, in his later writings Carnap recognized both the problems with the classic verification principle and Popper’s falsification  principle and proposed a more liberal criterion of confirmability. As Carnap would be the first to recognize, this proposal may turn out to be either too liberal or too restrictive after detailed analysis, and further refinement may be necessary. Last, but not least, Carnap is also an admirable example of how one can do philosophy of science without (political) hyperbole.

Carl Menger and the exact science of economics

In Significance and Basic Postulates of Economic Theory (1938) Terence W. Hutchison presents a logical-empiricist perspective on economic methodology and takes specific issue with Austrian economists who believe that economic theories cannot and should not be falsified through empirical testing. In the chapter “The Application of Pure Theory” Hutchison criticizes Carl Menger’s view of what constitutes an “exact” science:

Menger contributed a further precision to this concept of economic laws, emphasizing what he and subsequent writers called their exactness, exceptions to them being inconceivable, and that “it involved a misconception of the foundations and postulates of the exact method” to test them empirically…To-day one can hardly help concurring with Schmoller that any worker in a chemical laboratory who proclaimed Menger’s conception of exactness would be ejected forthwith.

He also quotes John Elliott Cairnes on the methodology of economics as saying, “The economist starts with a knowledge of ultimate causes. He is already, at the outset of his enterprise, in the position the physicist only attains after ages of laborious research…”

Hutchison responds to his claim as follows:

It is possibly very encouraging for the economist to hear that compared with the natural scientist the psychological method saves him “ages of laborious research”, but it is curious and a pity that this huge start has not enabled him to formulate any considerable body of reliable prognoses such as the natural sciences have managed to achieve.

Hutchison does not completely dismiss the role of  a-priori reasoning in economics but objects to the idea that such reasoning exhausts the subject of economics. He quotes Ernst Mach on “laws” being “a limitation of what is possible.” If a law does not exclude or forbid any conceivable type of empirical occurrence than it  is not telling us anything about the world and, therefore,  such a science should be considered a pseudo-science. A similar complaint has been raised by Karl Popper about the all-accommodating nature of Marxism. The logical positivist writer Otto Neurath was of the opinion that, historically, metaphysical and anti-positivist thinking go hand in hand with the justification of oppression.

Much ink has been spilled over the question of whether the methods of the natural sciences are suitable for the study of economics. But even after 70 years since the publication of  Hutchison’s classic, economists who  have completely rejected empirical testing have contributed little of substance to the science of economics.

Five important empiricist philosophy books

Most contemporary philosophers and social scientists have little interest and understanding of logic or the physical sciences and  therefore have little to offer to those who want to understand the philosophical aspects of knowledge. The following five books have been written by thinkers who have a great respect for science and the importance of empirical observation. With the exception of one book, no 21st century thinkers are featured to ensure that hype is not mistaken for importance.

(1) Hans Reichenbach’s The Rise of Scientific Philosophy (1951) is one of the best 20th century books on philosophy. The author shows how speculative and rationalist philosophy has been gradually replaced by the natural sciences. Writing from a consistent empiricist perspective, Reichenbach proposes that the lack of progress in philosophy is due to philosophers asking themselves questions that could only have been answered by the experimental method and the tools of modern logic. In the chapter about induction Reichenbach answers David Hume’s skepticism about causality and proposes a pragmatic justification of induction.

(2) Alfred J. Ayer’s Language, Truth and Logic (1936) is a classic and accessible exposition of logical positivism (or logical empiricism) by an English philosopher. Logical positivism is a school of thought in philosophy that is strongly shaped by the advances in physics and mathematics and seeks to eliminate metaphysics and meaningless statements from philosophy. Like most other philosophers in this tradition, Ayer kept refining his views throughout his life but always remained committed to the objectives of the original Vienna Circle.

(3) Rudolf Carnap was the most important exponent of logical positivism but his writings are of such an abstract and technical nature that most fellow philosophers and scientists are only familiar with his early popular statements of the positions of the Vienna Circle. A notable exception to his demanding work is his book An Introduction to the Philosophy of Science (1966) which is based on a seminar Carnap taught on the philosophy of the physical sciences. This book is not only valuable for its rigorous treatment of the philosophical foundations of physics but also represents a good summary of the views of the late Carnap.

(4) Bertrand Russell is among the most popular philosophers of the 20th century and had little reservations about speaking his mind on topics ranging from atheism to marriage. Unlike most philosophers that work in the analytic tradition, Russell had a great interest in the history of philosophy which would find its destination in his monumental and rich A History of Western Philosophy (1945). Russell attempts to treat the thinking of most philosophers he discusses with respect but the mindset of a logician and scientist is ever present, making this book one of the few available histories of philosophy from a (sometimes reluctant) empiricist perspective. The book does suffer from Russell’s highly subjective approach in some chapters, notably his rather melodramatic treatment of Friedrich Nietzsche.

(5) Nassim Nicholas Taleb’s Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets (2001) is not a book on philosophy but the general approach that informs his book about the role of chance in life and markets is informed by a thorough skepticism about our claims to knowledge. As a “skeptical empiricist” Taleb stands bemused at the urge of humans to seek and detect patterns everywhere and our illusions about control. Taleb’s work received a lot of well deserved attention after the 2008 financial crisis but his distinct epistemological views still receive little attention.