From: Paul Cockshott (wpc@DCS.GLA.AC.UK)
Date: Thu Jun 10 2004 - 03:48:08 EDT
Fred wrote Ajit seems to suggest in his comments below that the only variables that are permissible in economic theories are EMPIRICALLY OBSERVABLE MAGNITUDES. In other words, a positivist or operationalist philosophy of science. Ajit keeps asking, "how do we EMPIRICALLY KNOW the L's and the m in your equation?" He asserts that, unless these variables are empirically known, then there is no theory. But this is not true. Positivism is too narrow. It is also permissible for economic theories to be based on the assumption of unobservable variables. These assumptions cannot be directly empirically tested, but they can be indirectly empirically tested, in terms of the conclusions derived from these assumptions, which do refer to observable phenomena. ---------------------- Paul Cockshott I would be very hesitant in accepting this. If we do accept it, then unobservables like subjective utility have the same causative status as observables like the expenditure of labour time. One of the great strengths of the Marxian theory of value is that it rests on observable causative factors.
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