modeling

The Pretence of Knowledge

Friedrich Hayek, in his Nobel Prize lecture of 1974, “The Pretence of Knowledge,” observes that

the great and rapid advance of the physical sciences took place in fields where it proved that explanation and prediction could be based on laws which accounted for the observed phenomena as functions of comparatively few variables.

Hayek’s particular target was the scientism then (and still) rampant in economics. In particular, there was (and is) a quasi-religious belief in the power of central planning (e.g., regulation, “stimulus” spending, control of the money supply) to attain outcomes superior to those that free markets would yield.

But, as Hayek says in closing,

There is danger in the exuberant feeling of ever growing power which the advance of the physical sciences has engendered and which tempts man to try, “dizzy with success” … to subject not only our natural but also our human environment to the control of a human will. The recognition of the insuperable limits to his knowledge ought indeed to teach the student of society a lesson of humility which should guard him against becoming an accomplice in men’s fatal striving to control society – a striving which makes him not only a tyrant over his fellows, but which may well make him the destroyer of a civilization which no brain has designed but which has grown from the free efforts of millions of individuals.

I was reminded of Hayek’s observations by John Cochrane’s post, “Groundhog Day” (The Grumpy Economist, May 11, 2014), wherein Cochrane presents this graph:

The fed's forecasting models are broken

Cochrane adds:

Every serious forecast looked like this — Fed, yes, but also CBO, private forecasters, and the term structure of forward rates. Everyone has expected bounce-back growth and rise in interest rates to start next year, for the last 6 years. And every year it has not happened. Welcome to the slump. Every year, Sonny and Cher wake us up, and it’s still cold, and it’s still grey. But we keep expecting spring tomorrow.

Whether the corrosive effects of government microeconomic and regulatory policy, or a failure of those (unprintable adjectives) Republicans to just vote enough wasted-spending Keynesian stimulus, or a failure of the Fed to buy another $3 trillion of bonds, the question of the day really should be why we have this slump — which, let us be honest, no serious forecaster expected.

(I add the “serious forecaster” qualification on purpose. I don’t want to hear randomly mined quotes from bloviating prognosticators who got lucky once, and don’t offer a methodology or a track record for their forecasts.)

The Fed’s forecasting models are nothing more than sophisticated charlatanism — a term that Hayek applied to pseudo-scientific endeavors like macroeconomic modeling. Nor is charlatanism confined to economics and the other social “sciences.” It’s rampant in climate “science,” as Roy Spencer has shown. Consider, for example, this graph from Spencers’s post, “95% of Climate Models Agree: The Observations Must Be Wrong” (Roy Spencer, Ph.D., February 7, 2014):

95% of climate models agree_the observations must be wrong

Spencer has a lot more to say about the pseudo-scientific aspects of climate “science.” This example is from “Top Ten Good Skeptical Arguments” (May 1, 2014):

1) No Recent Warming. If global warming science is so “settled”, why did global warming stop over 15 years ago (in most temperature datasets), contrary to all “consensus” predictions?

2) Natural or Manmade? If we don’t know how much of the warming in the longer term (say last 50 years) is natural, then how can we know how much is manmade?

3) IPCC Politics and Beliefs. Why does it take a political body (the IPCC) to tell us what scientists “believe”? And when did scientists’ “beliefs” translate into proof? And when was scientific truth determined by a vote…especially when those allowed to vote are from the Global Warming Believers Party?

4) Climate Models Can’t Even Hindcast How did climate modelers, who already knew the answer, still fail to explain the lack of a significant temperature rise over the last 30+ years? In other words, how to you botch a hindcast?

5) …But We Should Believe Model Forecasts? Why should we believe model predictions of the future, when they can’t even explain the past?

6) Modelers Lie About Their “Physics”. Why do modelers insist their models are based upon established physics, but then hide the fact that the strong warming their models produce is actually based upon very uncertain “fudge factor” tuning?

7) Is Warming Even Bad? Who decided that a small amount of warming is necessarily a bad thing?

8) Is CO2 Bad? How did carbon dioxide, necessary for life on Earth and only 4 parts in 10,000 of our atmosphere, get rebranded as some sort of dangerous gas?

9) Do We Look that Stupid? How do scientists expect to be taken seriously when their “theory” is supported by both floods AND droughts? Too much snow AND too little snow?

10) Selective Pseudo-Explanations. How can scientists claim that the Medieval Warm Period (which lasted hundreds of years), was just a regional fluke…yet claim the single-summer (2003) heat wave in Europe had global significance?

11) (Spinal Tap bonus) Just How Warm is it, Really? Why is it that every subsequent modification/adjustment to the global thermometer data leads to even more warming? What are the chances of that? Either a warmer-still present, or cooling down the past, both of which produce a greater warming trend over time. And none of the adjustments take out a gradual urban heat island (UHI) warming around thermometer sites, which likely exists at virtually all of them — because no one yet knows a good way to do that.

It is no coincidence that leftists believe in the efficacy of central planning and cling tenaciously to a belief in catastrophic anthropogenic global warming. The latter justifies the former, of course. And both beliefs exemplify the left’s penchant for magical thinking, about which I’ve written several times (e.g., here, here, here, here, and here).

Magical thinking is the pretense of knowledge in the nth degree. It conjures “knowledge” from ignorance and hope. And no one better exemplifies magical thinking than our hopey-changey president.

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Related posts:
Modeling Is Not Science
The Left and Its Delusions
Economics: A Survey
AGW: The Death Knell
The Keynesian Multiplier: Phony Math
Modern Liberalism as Wishful Thinking

Modeling, Science, and Physics Envy

Climate Skeptic notes the similarity of climate models and macroeconometric models:

The climate modeling approach is so similar to that used by the CEA to score the stimulus that there is even a climate equivalent to the multiplier found in macro-economic models. In climate models, small amounts of warming from man-made CO2 are multiplied many-fold to catastrophic levels by hypothetical positive feedbacks, in the same way that the first-order effects of government spending are multiplied in Keynesian economic models. In both cases, while these multipliers are the single most important drivers of the models’ results, they also tend to be the most controversial assumptions. In an odd parallel, you can find both stimulus and climate debates arguing whether their multiplier is above or below one.

Here is my take, from “Modeling Is Not Science“:

The principal lesson to be drawn from the history of massive government programs is that those who were skeptical of those programs were entirely justified in their skepticism. Informed, articulate skepticism of the kind I counsel here is the best weapon — perhaps the only effective one — in the fight to defend what remains of liberty and property against the depredations of massive government programs.

Skepticism often is met with the claim that such-and-such a model is the “best available” on a subject. But the “best available” model — even if it is the best available one — may be terrible indeed. Relying on the “best available” model for the sake of government action is like sending an army into battle — and likely to defeat — on the basis of rumors about the enemy’s position and strength.

With respect to the economy and the climate, there are too many rumor-mongers (“scientists” with an agenda), too many gullible and compliant generals (politicians), and far too many soldiers available as cannon-fodder (the paying public).

Scientists and politicians who stand by models of unfathomably complex processes are guilty of physics envy, at best, and fraud, at worst.

Physics Envy

Max Borders offers a critique of economic modeling, in which he observes that

a scientist’s model, while useful in limited circumstances, is little better than a crystal ball for predicting big phenomena like markets and climate. It is an offshoot of what F. A. Hayek called the “pretence of knowledge.” In other words, modeling is a form of scientism, which is “decidedly unscientific in the true sense of the word, since it involves a mechanical and uncritical application of habits of thought to fields different from those in which they have been formed.” (“The Myth of the Model,” The Freeman, June 10, 2010, volume 60, issue 5)

I’ve said a lot (e.g., here, here, here, here, here, here, here, and here) about modeling, economics, the social sciences in general, and the pseudo-science of climatology.

Models of complex, dynamic systems — especially social systems — are manifestations of physics envy, a term used by Stephen Jay Gould. He describes it in The Mismeasure of Man (1981) as

the allure of numbers, the faith that rigorous measurement could guarantee irrefutable precision, and might mark the transition between subjective speculation and a true science as worthy as Newtonian physics.

But there’s more to science than mere numbers. Quoting, again, from The Mismeasure of Man:

Science is rooted in creative interpretation. Numbers suggest, constrain, and refute; they do not, by themselves, specify the content of scientific theories. Theories are built upon the interpretation of numbers, and interpreters are often trapped by their own rhetoric. They believe in their own objectivity, and fail to discern the prejudice that leads them to one interpretation among many consistent with their numbers.

Ironically, The Mismeasure of Man offers a strongly biased and even dishonest interpretation of numbers (among other things). When a leading critic of physics envy falls prey to it, you know that he’s on to something.