Analysis Without Synthesis Makes The World Fall Apart

Piet Keizer (2015), Analysis Without Synthesis Makes The World Fall Apart, Essays on Multidisciplinary Economics, 1, 2015; http://www.Pietkeizer.com

 Introduction

The history of scientific method is characterized by many methodological divides. As soon as someone makes a distinction between A and B, some people commit themselves to A, while others focus their strategies on B. From then on the different groups of people barely communicate with each other anymore. Now and then methodologists  – some defending position A, others defending B – are battling about the differences (in German: Methodenstreit). After a while they stop battling, without satisfactory results most of the time. In section 2 we will shortly discuss a number of distinctions, that have become divides. In section 3 we discuss three basic philosophical questions, which are about ontology, epistemology, and about methodology in the narrow sense of the word. In section 4 and 5 we discuss the structure of knowledge and the methodological research strategy, which could be followed, respectively. In section 6 we draw a few conclusions.

Decisive Dual Concepts

The most important dual is the distinction between physics and meta-physics. The meaning of the word ‘meta-physics’ is: ‘about physics’. Physicists should do physics, and now and then think about what they actually are doing. By transforming our analytical distinction into a kind of separation, some people are just doing physics, while other people are just thinking about what these people are doing. This separation is called specialisation, but the necessary communication between the two analytically distinguished parts, has become externalized: not an person-internal discussion, but a discussion between persons and especially between groups of persons. Communication within a person is significantly influenced by the person’s capabilities, and the way the person has been brought up by his parent-figures. Communication between persons and groups of persons, who are strongly dependent on each other, turns out to be a status battle rather than an economically successful discourse.

Closely related to the divide just mentioned, are the duals ideal versus material, mind versus body, theoretical versus empirical and deduction versus induction. As duals they are creating conflict rather than scientific progress.

Another series of duals, which are also playing an important role in science, are the following. The analytical distinction between micro and macro, between mechanic and organic, static and dynamic and historical, between deterministic and stochastic and open, between quality and quantity, and between mono- and multi-disciplinarity.

It would be great if all scientists were understanding the true characteristics of these analytical distinctions, and would choose their methodology in a pragmatic way – dependent of the context of the subject-matter.

Three Philosophical Problems

The first is the question of ontology. What should be considered as real? Orthodox economics considers human action as economic action, while sociology considers it social. Once established, this ontological character does not change within a particular research programme. Leibniz and Kant are the big men of the analytical distinction between substance and property.Substance is that what identifies a particular object. It leads to carefully formulated definitions. Properties are characteristics, which can change over time and over the different members of a particular group. The group of unemployed people can function as an example. We first need a definition of unempoyment, so as to establish who belongs to the group, and who does not. Next, we must find out what are the properties of the group at a particular location in a particular period of time. Recently, the Dutch offcial statistical institution (CBS) changed the definition, so as to adjust to ILO-standards. Now every person with a job of 1 hour or more per week, is called employed. This definition is based on a typical ILO-view, and is in contrast to what the Dutch people consider as unemployment. The effect on the Dutch unempoyment rate is a decline of about 2%. – just because of a change in definition. The properties can change continuously. More or less women, more or less younger people, or a change in the number of non-Western immigrants.Ontology is about the substance, and is a decisive element in the theoretical structure, which is used when discussing the changes in properties. So, every empirical research needs a theoretical foundation of an ontological nature.

The second is the epistemological question. What is the basic source of knowledge? Is it the use of our classic senses (seeing, hearing, smelling, tasting, and touching)? Or is it our capacity to think logically about what our senses experience? Kant has formulated a synthesis between the first position, which is called empiricism and the second position, which is called rationalism. Bot elements are necessary parts of our knowledge structure. Just theory is like an empty box, while just empirics keeps us blind. Although we all are bombarded with a flood of sense impresssions, the theoretical structure in the minds of the people makes it possible for them to understand what they empirically observe. Without understanding people don’t know how to react, when observing particular things. So, theory as well as the empirical impressions are necessary ingredients for reliable knowledge about our reality. By means of internal observation, also called introspection, we discover our feelings and thoughts. Both are emotion-driven. Sometimes we read texts with ideas, which create a strong positive emotion: yes, right. Apparenty this idea fits the person’s intuition. For some person holds that they produce new ideas themselves. These ideas can form the axiomatic basis for an a priori analytical structure. By means of logical implication theories are derived. On the basis of the idea of economic man orthodox economists have developed a impressive system of analysis and theory, which is called economic logic. We can also formulate a psychic and a social logic. When we integrate the three logics, we have a sophisticated interpretation of human behaviour. It functions as a source of conceptual definitions, analyses and theories, which might be applied to the real world.

Many social scientists criticize this research strategy. For them axioms and a priori’s are meta-physical entities, and therefore not scientific. They strive for empirical evidence of their theoretical statements. These statements drop from the sky, but it doesn’t matter. If the statements predict the empirical reality well, the scientific job is done well. One problem remains: how to define and select variables? Then most empirical researchers refer to “The Literature”. The empirical results offer many correlations, all together describing the course of history. The clash between the two views is called the logic versus history controversy.

The third is the methodological problem, which is the problem of the organization of the knowledge production process. Some research programmes are based on a particular idea, such as the economic man of orthodox economics. Concepts used in this methodology are idealtypes, such as democracy, society, economy, hierarchy, culture and power. To illustrate this, we elaborate on the idealtype of democracy. It expresses the idea of a group of people, which governs itself. The basic rule formulates the essential equality of all individuals, which implies that every person has a set of inalienable rights and duties towards other people. Daily practice is the result of the simultaneous operation of a series of ideas and motivations. So, real-life behavioural patterns will never be completely democratic, and most of the time be far from the idealtype of democracy.

Other resarch programmes try to establish their research on a empirical basis, and try to formulate realtype conceptualizations. In the ‘socialism is feasible’ debates many researchers worked with real-type constructions, such as the Lenin-type, the Stalin-type, the Yugo-Slavian type or the Mao- or Deng-type of socialism. These concepts are sets of empirical characteristics; researchers are searching for successful combinations, so as to formulate a model to be copied by others. In practice empirical researchers always use theoretical notions, when choosing their favorite variables. Unfortunately these theoretical notions are not explicitly formulated.

The difference between ideal-type and real-type is more or less the same as the distinction between aspect-systems and subsystems. Orthodox economics is a typical aspect-system. Work by Walras, Mill, Menger and Pareto are good examples of this type of modelling. Heterodox economics, however, is a typical subsystem. This makes comparison between the two perspectives problematic. Most sociology presents itself as a subsystem, which is society at large or parts of it. But some authors try to develop a social aspect-system: Weber, Parsons and Becker, for instance. So with psychology: most psychologists suggests that their discipline is empirically orientated. The Humanist approach and the psycho-dynamic analysis are exceptions, especially the work by Rogers and Jung, respectively.

So, if we search for integration between different disciplines, we must take the difference in methodology into account.

The Structure of Knowledge

Some scientists feel attracted to theoretical work, while others prefer the empirical part. Whatever their preference, they need each other in the end. Then they must adapt to each other, which is a very difficult job for people, who prefer to be independent. Logically speaking we can distinguish between four elements, which are necessary in the process of knowledge production. As explained, every research programme is based on a particular intuitively attractive idea. This idea is called the paradigm. On the basis of this idea a system of concepts is developed and the interrelationships analysed. Then theoretical statements are derived. If the system, developed so far, is a serious attempt to explain human behaviour (subsystem, not aspect-system), the last step is the empirical test of the hypothesis, which is a specified theory. If the empirical results are not satisfactory, then the whole set of axioms and other assumptions is falsified. The researcher must find out which changes in the theoretical system, or in the statistical methods, should be executed.

In conclusion, the process consists of four stages, which are the paradigm (1), the analysis (2), the theory (3) and the hypothesis (4). We can summarize this structure by means of the acronym PATH. Every scientist can work on a particular part of this structure, alone or in cooperation with others. But it is very important for everyone to know that he is working on a part of a particular bigger whole, and which part it is. It gives the research orientation and meaning.

Logical Research Procedures

Reality can be imagined as a complex system. To understand it, we must start with a very simple picture, subsequently followed by a series of steps, making the system increasingly complex. The first stage is a simple, static, closed system, and the main question is which mechanism makes the system to a stable one. Orthodox economics has developed an economic world, which is the habitat of economic, rational man, who never develops relationships of a social kind.The next step is the dynamization of the relationships, and see whether the stabilizing system still works. The economic world is an aspect-system, and in the third stage it should be extended with the other two primary aspects, which are the psychic and the social aspect. In the fourth stage an explicit macro-foundation should be formulated, making it possible to analyse the micro-macro-relationships. In the fifth stage the dynamic relationships should be made historical. It means that historic events play a role in the decisions of people, long after this event took place. It makes behaviour more rigid (hysterisis), and path-dependent. In the sixth and last stage the closed system is opened, which means that humans are bombarded with a large number of shocks all the time. The evolutionary approach and the post-Keynesian approach explicitly assume reality to be an open system. It makes people uncertain. Some people like it and try out various sorts of novelties. These innovators might give economies the necessary spirit and productivity growth. Most people don’t like uncertainty, and become passive in times of negative uncertainty: they save, and pay-off loans in times of depression. In that case governments are the only subjects, which are large enough to give the economy the necessary impulse, so as to get out of the depression. Mechanic systems are too rigid to describe complex developments, and might be replaced by organic systems.

Conclusions

The message of this essay is that analysis must be followed by synthesis. If we make a distinction between meta-physics and physics, or between micro- and macroeconomics, we must formulate the interrelationship between the two elements. Many examples are given to show that the scientific project has far-reaching consequences for the objects of study: positive as well as negative. Specialization is only profitable, if there are people who are able to integrate the results of it.

A seond lesson, which can be learned is that science must be as simple as possible – but not simpler. When constructing analyses on the basis of intriguing ideas, we must start too simple, and formulate the mechanisms that rule this too simple world. Step-by-step analysts should make the world more complex. Static analysis becomes dynamic and historical, micro- and macro-analysis become interrelated. Closed and mechanic systems become open and organic systems. Every research must argue why it chooses a particular level of complexity. Some situations are so simple, that a quite simple analysis is justified, and empirical application meaningful. In other cases, the constructions should be made more complex to see whether it leads to improved understanding.

Piet Keizer, Utrecht University School of Economics, 27-03-2015

 

 

 

 

 

 

 

 

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