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Induction, complexity, and economic methodology

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  • Smith, Peter

Abstract

This paper focuses on induction, because the supposed weaknesses of that process are the main reason for favouring falsificationism, which plays an important part in scientific methodology generally; the paper is part of a wider study of economic methodology. The standard objections to, and paradoxes of, induction are reviewed, and this leads to the conclusion that the supposed ‘problem’ or ‘riddle’ of induction is a false one. It is an artefact of two assumptions: that the classic two-valued logic (CL) is appropriate for the contexts in which induction is relevant; and that it is the touchstone of rational thought. The status accorded to CL is the result of historical and cultural factors. The material we need to reason about falls into four distinct domains; these are explored in turn, while progressively relaxing the restrictions that are essential to the valid application of CL. The restrictions include the requirement for a pre-existing, independently-guaranteed classification, into which we can fit all new cases with certainty; and non-ambiguous relationships between antecedents and consequents. Natural kinds, determined by the existence of complex entities whose characteristics cannot be unbundled and altered in a piecemeal, arbitrary fashion, play an important part in the review; so also does fuzzy logic (FL). These are used to resolve two famous paradoxes about induction (the grue and raven paradoxes); and the case for believing that conventional logic is a subset of fuzzy logic is outlined. The latter disposes of all questions of justifying induction deductively. The concept of problem structure is used as the basis for a structured concept of rationality that is appropriate to all four of the domains mentioned above. The rehabilitation of induction supports an alternative definition of science: that it is the business of developing networks of contrastive, constitutive explanations of reproducible, inter-subjective (‘objective’) data. Social and psychological obstacles ensure the progress of science is slow and convoluted; however, the relativist arguments against such a project are rejected.

Suggested Citation

  • Smith, Peter, 2009. "Induction, complexity, and economic methodology," MPRA Paper 12693, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:12693
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    More about this item

    Keywords

    induction; economics; methodology; complexity;

    JEL classification:

    • B41 - Schools of Economic Thought and Methodology - - Economic Methodology - - - Economic Methodology

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