| Skeptical Empiricism and the a-Platonic School | The Platonic Approach |
|---|---|
| Interested in what lies outside the Platonic fold | Focuses on the inside of the Platonic fold |
| Respect for those who have the guts to say “I don’t know” | “You keep criticizing these models. These models are |
| Fat Tony | Dr. John |
| Thinks of Black Swans as a dominant source of randomness | Thinks of ordinary fluctuations as a dominant source of randomness, with jumps as an afterthought |
| Bottom-up | Top-down |
| Would ordinarily not wear suits (except to funerals) | Wears dark suits, white shirts; speaks in a boring tone |
| Prefers to be broadly right | Precisely wrong |
| Minimal theory, consides theorizing as a disease to resist | Everything needs to fit some grand, general socioeconomic model and “the rigor of economic theory”; frowns on the “descriptive” |
| Does not believe that we can easily compute probabilities | Built their entire apparatus on the assumptions that we can compute probabilities |
| Model: Sextus Empiricus and the school of evidence-based, minimum-theory empirical medicine | Model: Laplacian mechanics, the world and the economy like a clock |
| Develops intuitions from practice, goes from observations to books | Relies on scientific papers, goes from books to practice |
| Not inspired by any science, uses messy mathematics and computational methods | Inspired by physics, relies on abstract mathematics |
| Ideas based on skepticism, on the unread books In the library | Ideas based on beliefs, on what they think they know |
| Assumes Extremistan as a starting point | Assumes Mediocristan as a starting point |
| Sophisticated craft | Poor science |
| Seeks to be approximately right across a broad set of eventualities | Seeks to be perfectly right in a narrow model, under precise assumptions |
I cannot accept a pretense of science. I much prefer a sophisticated craft, focused on tricks, to a failed science looking for certainties. Or could these neoclassical model builders be doing something worse? Could it be that they are involved in what Bishop Huet calls the manufacturing of certainties?
Let us see.
Skeptical empiricism advocates the opposite method. I care about the premises more than the theories, and I want to minimize reliance on theories, stay light on my feet, and reduce my surprises. I want to be broadly right rather than precisely wrong. Elegance in the theories is often indicative of Platonicity and weakness—it invites you to seek elegance for elegance’s sake. A theory is like medicine (or government): often useless, sometimes necessary, always self-serving, and on occasion lethal. So it needs to be used with care, moderation, and close adult supervision.
The distinction in the above table between my model modern, skeptical empiricist and what Samuelson’s puppies represent can be generalized across disciplines.
I’ve presented my ideas in finance because that’s where I refined them. Let us now examine a category of people expected to be more thoughtful: the philosophers.
Philosophers in the wrong places—Uncertainty about (mostly) lunch—What I don’t care about—Education and intelligence
