Francis Bacon, an Englishman, was born in 1561 and died in 1626.
Bacon's thinking had a profound influence upon the development of Western
civilization, because he founded what is known as the scientific method.
All the scientific advances of mankind up to the present day, are based on
this method, which is - in a few words - orderly experimentation upon things
of the natural (physical) world in order to arrive at a truth. He was the
first to outline the bases of the methodology to discover physical truths.
In contrast to his way of approaching reality, we have the example of
alchemy, the forerunner of chemistry. For the alchemist, there was not a
clear separation between the physical and the spiritual properties of matter.
Thus, the alchemist was typically fascinated by the possibility of
manipulating the spiritual properties of metals, in order to transmute a
metal of very low value, such as lead, into the metal of highest possible
value, gold. Infinite riches would be the prize for discovering that method.
The processes were mysterious and thought to be hidden in codes provided by
earlier alchemists. Even the great physicist, Sir Isaac Newton (1642 -1726)
still dabbled in alchemy, while doing his enormous work in astronomy.
Logicians tell us that the process of arriving at a truth through prior
experimentation is inductive reasoning, where the mind is led
into the truth through experiment. If you put a fresh egg into boiling
water for, say, 12 minutes, your egg will be a hard-boiled egg. Repeat this
experiment as many times as you want, and you have a physical law:
"Fresh egg boiled for 12 minutes produces hard-boiled egg." Such is
Physics. The truth expressed by the aforementioned Law is arrived at through induction.
The huge and unquestioned successes which the world has enjoyed through
the application of the scientific method founded by Francis Bacon have led to
an overvaluation of the scientific method and to its abuse. For while this
method is the correct method for the investigation of the natural world and
knowledge of its characteristics, both down to the sub-atomic level and up to
the level of knowing what the landscape of Pluto looks like, it is not the
only scientific method of acquiring knowledge.
The other method of acquiring scientific knowledge is not based on prior
experimentation and is not based on induction.
I do not know what to call this alternative method of acquiring scientific
knowledge - perhaps an indication of the more humble position which it
enjoys, in our highly materialistic world.
However, there exist examples of this alternative method of acquiring
scientific knowledge: One of them is Logic and another is Mathematics.
Logic is not born of experience and experimentation. It is inborn in the
human being. Where Bacon's scientific method reveals truths a posteriori,
that is to say, after experimentation, Logic is a priori -
inborn in us, and exists in us before experience. The same holds for
Mathematics: the science of number is independent of prior experience.
The truths derived from Logic and from Mathematics are a priori, and all
further truths arrived at in Logic and in Mathematics are arrived at by an
intellectual process which is different from that applied in Bacon's
scientific method: they are arrived at by deduction, and not by
induction.
There is a third field in which scientific knowledge is obtained through
deduction. I refer to Economics. Economics is the study of the Logic
of Human Action. It is an a priori science, whose postulates are arrived at
through a deductive process from the initial a priori truth - a truth within
each human being - that human beings act; from which we deduce that
human beings choose, from which we deduce that the human being prefers one
thing to another. From which I deduce that the reader is preferring to read
this article rather than doing something else with his time. And so on and so
forth.
Thus Economics is the study of conscious human behavior.
Such is the hold which Bacon's scientific method for the study of the
natural world exerts upon mankind, that in our day all "mainstream
economists" are trained to study human events through the methodology of
induction, which is by its nature based on experiment. This is highly
unfortunate, for induction through experiment is logically inapplicable in
the field of human events, because controlled experiment, the foundation
of Bacon's scientific method, is impossible when studying how humans behave.
Atoms have no choice, they must always behave in the same manner under
similar conditions. Planets have no choice, they follow their orbits without
fail. On the other hand, human choice, whether individual or collective,
varies from instant to instant. You, the reader, have the choice to continue
reading, or not, for instance.
All true Economics is based on an undeniable fact: humans act, from which
we deduce another undeniable fact: humans choose . True Economics applies a different
methodology - the methodology of deduction - to the study of human
affairs; this methodology is radically different from the methodology which
is appropriate for the study of the natural world.
All the present woes, uncertainty, unjustified speculation and enrichment
of a few to the detriment of whole nations, the utter madness of ZIRP and now
NIRP, the call for the banning of cash, and so on and so forth, all the
anomalies which now plague our world are due to the false methodology upon
which "mainstream economics" operates.
The High Priests of the Fed and the ECB, of the Central Banks of China, of
Russia, of the whole world in fact, are doing nothing more than experimenting
upon mankind. They are "Sorcerer's Apprentices" and attempt one
policy after another, hoping that the next experiment will provide the
success they wish for. They are all looking at numbers, at graphs, at
percentages of change, at trend-lines, at the results of prior experiments in
past years, attempting to derive some knowledge of what they must do. But a
posteriori information is useless - it only can show what happened in the
past, and not what they desperately need: scientific certainty of
what they must do now to achieve the ends which they seek.
"Mainstream Economics" functions on the basis of an
inappropriate method. The inductive method cannot apply in the realm of human
affairs, where each situation, individual or collective, is unique and not
repeatable; no matter how well-intentioned "mainstream economists"
may be, their methodology - induction - must fail to solve the problems they
face.
In order to de-throne these impostors, it would seem advisable to undercut
their presumptuous airs with the argument that they really do not know what
they are doing, because they are basing their policies on the wrong
methodology and cannot possible achieve any success. This argument attacks
the very foundation upon which "Mainstream Economics" has built its
castle.
The most influential and prestigious universities of the world, such as
Stanford, Princeton, Yale, Harvard, MIT, and the London School of Economics,
are all training would-be economists in the wrong methodology:
in the scientific method which is applicable to the natural world, induction
through experimentation, which is, however, utterly useless and
counter-productive when applied in the realm of human behavior, where only
deduction from a priori knowledge, as taught by the New Austrian School of
Economics, is the correct methodology. All we can expect from these young men
and women who will graduate from their studies as "accredited
economists" will have to be further chaos and disorder, and further
breakdown of prosperity, which will end in the complete impoverishment of humanity.
For more on this subject and the misguided efforts of "Mainstream
Economics" I refer to you Ludwig von Mises' fascinating book, "Epístemological
Problems of Economics" and to the work of Professor Antal E.
Fekete, founder of the New Austrian School of Economics, whose work can be
found at www.professorfekete.com.
