Carleton University economist Frances Woolley is a superb microeconomist, and a colleague of Nick Rowe, my favourite macroeconomist. She points out that “culture” can explain any observed behaviour, so therefore explains nothing.
[A] problem with “culture” is that it can explain anything. People in Uttar Pradesh select for sons?” It must be their culture. People in Kerala don’t select for sons?” It must be their culture. Since “culture” is compatible with any conceivable set of facts, it is not falsifiable.
From a scientific standpoint, theories that can, potentially, be proved to be false are the best type of theories. Why? It’s impossible to prove that any theory about the world is true. For example, once upon a time, Europeans had a theory: “All swans are white”. They believed it was true, because they had observed thousands of swans, and all of them were white. But, of course, it wasn’t, as the Europeans discovered when they went to Australia.
Since we can never prove our theories to be true, the best we can do is develop theories with testable predictions, and test them. Try as hard as we possibly can to show that the theory is false. If the theory stands up to all of our tests, then we accept it – for now.
Frances Woolley , “Why “culture” is a lousy explanation“, Worthwhile Canadian Iniative, 27 March 2013.
Read the entire post – including the comments section. If you are interested in the preference for sons over daughters in some societies, see also her subsequent post “How can son preference persist?“.
Frances does not mention this, but it was the Austrian philosopher Karl Popper (1902-1994) who famously defined science as the search for falsification of received hypotheses. But unfalsifiable statements (principles and theorems) can be useful, even if they are not ‘science’, narrowly defined. Years ago, I ended a lengthy blog post on the subject with two paragraphs, which I reproduce below.
Only recently did it dawn on me that comparative advantage is a theorem, like a theorem in mathematics: it is true by definition. Since it is not falsifiable, it is not a scientific hypothesis. This does not make it any less important for policy purposes, but it does lead one to question whether economics is a science, dismal or otherwise. Perhaps it is more helpful to think of economics as ‘codified common sense’.
Karl Popper insisted that science consists of falsifiable hypotheses. “All swans are white” is falsifiable, since identifying a single black swan refutes the hypothesis. “2+2=4″ is true by definition, as is the statement “All white swans are white”; neither is falsifiable. The principle of comparative advantage, arguably the most important statement of economics, is not falsifiable, so is true by definition. Unfortunately, the definition is a bit more complex than 2+2=4, so many otherwise intelligent people fail to understand its logic. As someone once said ‘Common sense is very uncommon.’ The Spanish term for common sense is ‘buen sentido’ (good sense), which is more accurate.
Larry Willmore, “Comparative advantage is not science“, Thought du Jour, 29 September 2005.
My example was comparative advantage as an explanation of trade flows, rather than culture as an explanation of gender preference. Comparative advantage is a term that everyone is familiar with, but few understand. Here is an excellent definition, from the World Trade Organisation (WTO):
What did David Ricardo mean when he coined the term comparative advantage? According to the principle of comparative advantage, the gains from trade follow from allowing an economy to specialise. If a country is relatively better at making wine than wool, it makes sense to put more resources into wine, and to export some of the wine to pay for imports of wool. This is even true if that country is the world’s best wool producer, since the country will have more of both wool and wine than it would have without trade. A country does not have to be best at anything to gain from trade. The gains follow from specializing in those activities which, at world prices, the country is relatively better at, even though it may not have an absolute advantage in them. Because it is relative advantage that matters, it is meaningless to say a country has a comparative advantage in nothing. The term is one of the most misunderstood ideas in economics, and is often wrongly assumed to mean an absolute advantage compared with other countries.
