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Just about everything I write on the CasP forum takes the form of philosophical speculation, specifically in the arenas of ontology and epistemology. I can’t lay claim to more than speculation. However if one speculates a premise (an a priori) then the conclusions hold IFF the a priori is true (that’s a big unknown “IFF” of course) and IFF all the chained deductions are logically sound. We can never know if an a priori metaphysical assumption is true unless it is a “near-empirical” assumption AND science advances in ways to make the previously untestable assumption, testable. We can however, examine the chained deductions for logic and dismiss the conclusions as most likely untrue if the logic is faulty. Are there rare cases where certain fallacious logical deductions can cancel each other out and by fluke lead to a valid conclusion? Let us leave that aside.
I just tweeted a thread on Keynes to B&N. It’s a quick hatchet job on Keynes. I make no bones about that. It would never have been conceivable to me without reading CasP. Here’s a rendition of it. I’ve fleshed it out a little here.
A most bizarre passage occurs in Keynes’ “Theory of Unemployment, Interest and Money” in Chapter 4 – ‘The Choice of Units’. Here are key quotes from it, which better expose the deductive inconsistencies by removing intervening verbiage which does not materially assist Keynes’ argument.
“The three perplexities which most impeded my progress in writing this book, so that I could not express myself conveniently until I had found some solution for them, are: firstly, the choice of the units of quantity appropriate to the problems of the economic system as a whole; secondly, the part played by expectation in economic analysis; and, thirdly, the definition of income.” -Keynes.
Let us examine Keynes’ solution to the first “perplexity”, namely “the choice of the units of quantity”.
“Obviously our quantitative analysis must be expressed without using any quantitatively vague expressions. And, indeed, as soon as one makes the attempt, it becomes clear, as I hope to show, that one can get on much better without them.” Remember this. One can get on much better “without using quantitatively vague expressions.” Fair enough, we can accept that proposition. However, this does not excuse or absolve us from the need for using quantitatively precise expressions and ontologically supportable categories, supportable in the empirical, scientific sense, if “economics” is to be an objective, scientific pursuit.
After calling for the avoidance of “quantitatively vague expressions: Keynes immediately writes: “The fact that two incommensurable collections of miscellaneous objects cannot in themselves provide the material for a quantitative analysis need not, of course, prevent us from making approximate statistical comparisons, depending on some broad element of judgment rather than of strict calculation, which may possess significance and validity within certain limits.”
Keynes says we can get on better “without using quantitatively vague expressions” but we can calculate “on some broad element of (qualitative) judgment rather than of strict calculation, which may possess significance and validity within certain limits.” This is a clear non sequitur. I am sorry but if Berkeley or Hume (two very different philosophers who are each in their own systems precise and internally consistent) had read this, they would laugh it out of the building. In any serious thesis defence it would be indefensible.
After this non sequitur and bit more obscuring waffle, Keynes states: “In dealing with the theory of employment I propose, therefore, to make use of only two fundamental units of quantity, namely, quantities of money-value and quantities of employment. The first of these is strictly homogeneous, and the second can be made so.”
Good grief, this is abysmal! The “incommensurate items” problem is noted earlier, then completely waved away, anyway, by measuring the incommensurate real items in notional money and making them ipso facto, QED, commensurable again! Hilarious! And all labors making incommensurate items, can be made commensurable again by counting hours and giving them different values in money to allow for skill and specialisation and different value (in money) products and services. The alchemists attempted transmutation of elements without a fission reactor and particle bombardment but Keynes here achieves it without a fission reactor and particle bombardment! Bad ontology, the mixing of the real and the notional in one conceptual beaker, is all it takes. Bravo!
What Keynes has “achieved” is to emulsify the money theory of value and the labor theory of value into a most absurd colloidal collocation. “Thus, if E is the wages (and salaries) bill, W the wage-unit, and N the quantity of employment, E = N × W.” -Keynes.
The genuine mathematicians will have to help me here if I make a mistake, especially in dimensional analysis. I get:
∑ (wages + salaries) in money units = (Wage money units per hour x hours) so if money units = dollars then:
N Dollars = N Dollars. This is an accounting identity, nothing more.
There is no proper reference to objective reality in any of this. It is a circuitous nominal accounting identity. It goes nowhere to explaining anything. As I say, a modern Berkeley or Hume would have torn it apart, simply in terms of (lack of) logical deduction and logical equation. The accounting identity is claimed to have a reality, beyond the formal accounting identity simpliciter, by emulsifying real and formal elements in the one analysis and in the one equation. A mistake in dimensional analysis in the equation is avoided only by quantifying everything in the notional quantity, by notionally quantifying each side of the equation in the social, fictive, performative dimension of money.
Now I admit I have not read the rest of Keynes. After Keynes’ above howler, why would I unless I was an historian of classical and neoclassical economic thought? There is a way Keynes can partially save himself (perhaps) and perhaps he does so. It’s a form of macroeconomic pragmatism. If we admit all quantities of money are “created notional” and then allocated prescriptively, and yet at the same we time note that money can be and is used performatively, socially to purchase or legally acquire real stuff (by various backings of legal law and the state’s monopoly on legal violence) then we can deduce that command allocations of money do command where the goods and services go. The primary command allocations are issued by governments and also by large (monopolistic / oligopolistic capitalists (especially where governments abrogate the power and assumed responsibility to command). These actors (government and large capitalists) primarily command where resources, goods and services go (the main channels) and this then determines the choices of consumers who can choose only between the pre-determined available and channelled choices and only do so to the extent that they can satisfy the wealth condition for a given purchase.
I will finish by reiterating that I find the level of philosophical deduction in classical and neoclassical economic ontology (for it is still ontology) abysmal. Held against the standards set by Berkeley and Hume, it is risible. Berkeley’s fundamental philosophical a priori is not scientific but dogmatic. It has no scientific truth warrant in empirical terms. It has only a doctrinal truth warrant and one idiosyncratic to Berkeley at that. (Most standard Western theologians do not reject the materialness of the creation in their received dogma.) Nevertheless, every deduction of Berkley’s, made after his idiosyncratic a priori, is strictly logically consistent. By, in effect, positing strict immaterialist or idealist monism, Berkeley has homomorphically mirrored what would happen in a material monist system (as in a material cosmos). The results, via his strict deductions, are fascinating. Berkeley easily deduces that all motion must be relative. He deduces in “De Motu” (“On Motion”) that Newton’s pure, empty universal inertial frame of reference is ontologically impossible and also that forces which operate at a distance through pure empty space are also ontologically impossible. Berkeley has been proven correct in at least some of these deductions by modern science (the theories of special and general relativity and their empirical tests ). In other words, some of Berkeley’s deductions were proven correct when science advanced enough to conceive and then test the relevant models.
It is interesting to consider how Berkeley proceeded from an unprovable a priori yet fortuitously, by positing strict immaterial monism (which homomorphically replicated material or “existent” monism, reached a set of (later) empirically verifiable conclusions. The monistic system assumption was and is the key. The argument of “immaterialim or materialism” is also in the end an essentialist diversion. Each term loses meaning without the other. Strictly, in monism, we should speak only of detectable “existents” and not essentialise them as immaterial or material. This is not a move back to religious or speculative metaphysics. It is consistent with advocating continued empirical investigation of the dependable laws of interaction of existents without the need to essentialise them as “immaterial” or “material”. There is no need to essentialise “existents” in this purview. Consistently, the social fictive, the formal, notional and prescribed are acted out via the algorithmic and performative actions of humans (who are at once semi-autonomous and semi-programmable “existents”) obeying, to an extent, the socially prescribed rituals, algorithms, rules, lists and rituals of society and social life, as extensively characterised by Bichler, Nitzan, Fix, Martin, Cherizola et al. in the CasP project. At least, that is my opinion and how I try to site the CasP project within my understanding of (empirical) ontology.
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