Abstract Summary
Julian Reiss (Durham University) - The main claim I am making in this paper is that there are few if any uncontroversial facts in economics. I provide three reasons to back up this claim. First, fact/value entanglement is pernicious in economics. Second, socio-economic facts tend to be sensitive to minute changes in context and specification. Third, there are no accepted standards for testing claims in economics. I speak of fact/value entanglement whenever ostensibly factual claims such as ‘The current inflation rate is 2%’ or ‘Raising the minimum wage will have no negative employment effects’ or ‘Free trade spurs growth’ cannot be established without making value judgments about what is and what is not desirable. I speak of pernicious fact/value entanglement when it is widespread, irreducible, or significant enough to make a real difference to outcomes and unlikely to be resolved by agreement on values. Fact/value in entanglement is pernicious in economics. Socio-economic facts are sensitive to context and specification. That is, whether any of the exemplary claims stated above are true may depend on (a) the time and place of application (this issue has been called the problem of ‘historical specificity’); (b) the horizon (what is true of the short run may be false of the mid or long run); (c) the choice of contrast (what is true relative to a specific contrast may be false relative to another); and (d) the choice of the measure or indicator. (Note that I do not defend anti-realism about economic facts in this paper: I do maintain that factual questions have true or false answers. However, these answers are highly context-sensitive and depend on the exact interpretation of the question, which is not always transparent.) There are no commonly accepted standards for testing claims in economics. Ever since the separation of the discipline from philosophy, there have been methodological controversies, which have often focused on the right balance between inductive and deductive elements in inference. This debate is unresolved. Three conclusions stand out. First, a certain degree of epistemic humility is called for. A disagreement about socio-economic facts does not mean that one party is irrational, ignorant or ill motivated. Second, we should be wary of claims to specific epistemic authority in economics. Third, we should not make socio-economic institutions dependent on the existence of uncontroversial socio-economic facts.
