Abstract
This paper argues that even when simple analogue models picture parallel worlds, they generally still serve as isolating tools. But there are serious obstacles that often stop them isolating in just the right way. These are obstacles that face any model that functions as a thought-experiment but they are especially pressing for economic models because of the paucity of economic principles. Because of the paucity of basic principles, economic models are rich in structural assumptions. Without these no interesting conclusions can be drawn. This, however, makes trouble when it comes to exporting conclusions from the model to the world. One uncontroversial constraint on induction from special cases is to beware of extending conclusions to situations that we know are different in relevant respects. In the case of economic models it is clear by inspection that the unrealistic structural assumptions of the model are intensely relevant to the conclusion. Any inductive leap to a real situation seems a bad bet.
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Notes
For more on this see Cartwright (2008).
Bridge laws in mechanics tell what force functions are appropriate to what situations, e.g. the law of gravity when masses are at work or Coulomb’s law when charges are at work. They give the force that mass or charge contribute when they are present, which will add vectorially with other contributions in any real situation to determine the overall force. In the language of J. S. Mill they are thus ‘tendency laws’.
In mechanics this is vector addition. Economics has different rules. In a simple linear equation, causes are summed. In simultaneous-equation models in which each equation represents a separate causal mechanism, the rule of composition is that the equations must all be satisfied at once.
I do not think the proposal floated here is a correct reading of Sugden’s proposal in this volume; nor do I want to insist that the way I interpret Knuuttila’s comment is the way she intended it. But this interpretation is at least useful to make clear my point about conclusions from either real or thought experiments.
Of course we could read it as a straight induction from a single case. This seems to be mad. Seeing one case of an effect E with cause C is like seeing one case of a raven with black colour. I certainly would not take this to be a good base for ‘All ravens are black’ or ‘The next raven to be observed will be black’ without a lot more surrounding theory. On this topic see Julian Reiss’s discussion (Reiss 2009). Reiss also points out that credibility is one explanatory virtue in a model among other virtues (like mathematical expressibility) that can readily trump credibility.
Recall that I have been claiming that this inference is valid only if we are taking ‘same effect’ in the sense of ‘same contribution’ to the effect, not in the sense of ‘same manifest’—i.e. overall—effect and we have independent reason to believe the cause has a stable contribution.
Notice that I have changed form his use of ‘cause’ to my word ‘contributes’. Sugden is after all in this remark trying to reconstruct a conclusion from a capacity point of view, in which case the conclusion needs to be about contributions, not manifest effects.
They may of course do much else as well.
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Cartwright, N. If No Capacities Then No Credible Worlds. But Can Models Reveal Capacities?. Erkenn 70, 45–58 (2009). https://doi.org/10.1007/s10670-008-9136-8
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DOI: https://doi.org/10.1007/s10670-008-9136-8