by Mario Rizzo
Paul Krugman is now saying that the Obama prototype of a stimulus plan is not enough. Other, more cautious economists are saying there is no economic evidence that it will be enough. We don’t even have a Congressional bill yet but macroeconomists like to think in aggregates and the specific content of the plan is not, I gather, all that important.
Now, of course, this is probably just ordinary academic uncertainty. Yet from the perspective of the philosophy of science, this seems like the beginning of what Karl Popper and Hans Albert, philosophers who emphasized the importance of rational criticism of theories, called an “immunizing strategy.” (See Karl R. Popper, The Logic of Scientific Discovery, Chapter. 1.)
For example, suppose the fiscal stimulus policy is perceived to have failed. Has the theory been refuted? “No” will be the likely answer because the stimulus was not large enough. But if we are indeed out of the realm of the available evidence then such a statement is purely ad hoc – a fancy term for an expedient intellectual invention. Today’s Keynesians are getting nervous. They are either at the threshold of their greatest victory or at the precipice of their greatest failure. They want to be prepared for either.
Let’s see what happens.