On Ignorance in Economics

Paper Session

Friday, Jan. 6, 2017 3:15 PM – 5:15 PM

Swissotel Chicago, St Gallen 3
Hosted By: Association for Social Economics & American Economic Association
  • Chair: George DeMartino, University of Denver

Economic Methodology, Science, Engineering and Ignorance

David C. Colander
Middlebury College


Science can be seen as the search for the truth. Most discussions of the methodology of science is built on the assumption that truth exists and that we can discover it. Engineering is not science. It is the search for answers to problems. It isn’t especially concerned about truth, because it is built on the assumption of ignorance--engineers are so far away from the truth that they might as well focus on what is useful to answering real-world problems. Science methodology and engineering methodology are related, but are quite different. Specifically, one can see engineering methodology as science methodology adapted for an assumption that we are ignorant. Alternatively, one could see science methodology as engineering methodology with an assumption that truth exists and we can discover it. This paper argues that 99% of those individuals who call themselves economists would be more effective if they were to follow an engineering methodology rather than a scientific methodology, and that currently, they don’t do so. It further argues that their failure to do undermines economics’ usefulness.

The Specter of Ignorance in Economic Theory and Practice: An Introduction to the Issues

George DeMartino
University of Denver


Economists typically apply themselves to the expansion of the terrain of economic knowledge, mapping those domains that they believe to be amenable to scientific analysis via the application of economic concepts and methods. This vision of economics is essentially optimistic: it presumes that economic science progresses over time as economic knowledge pushes against the frontier separating the known from the unknown. But this model of economic science is illusory, and it is potentially dangerous when it is drawn upon (as it often is) to secure authority for the profession. The model obscures the fact that economics treats material that entails not just the unknown, but the unknowable; and that recognition of ignorance ought to be central to theoretical and applied economics. What do we not know now in economics, what might we never know, what might be unknowable in principle—and how should these epistemic limitations bear on economists’ practice? Alternative strategies for managing authority in the context of ignorance include (among others) Nassim Taleb’s skin-in-the-game ethic; Wendell Berry “way of ignorance;” and David Colander’s “muddling through.”

The Invisible Hand and Political Transformative Experience

Eric Schliesser
University of Amsterdam


In this paper I bring together a recent theory of political transformative experiences (hereafter PTE) with certain kind of invisible hand explanations. A PTE involves an experience that is both epistemically and politically transformative. PTE arises in situations where collective agents (e.g., social activists or financial regulators) think of themselves as authoritatively controlling their choices by collectively projecting themselves forward and considering possible futures and their plans are undermined by cognitive and epistemic limitations (that is, epistemic uncertainty). In particular, it is a political theory of unforeseen consequences in which those consequences change political actors in ways they could not have willed.

Liberal Economy, Liberal Science?

Deirdre McCloskey
University of Illinois-Chicago


JEL Classifications
  • B0 - General