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15-04-2020

Behavioral symmetry, rent seeking, and the Republic of Science

Authors: Diana W. Thomas, Michael D. Thomas

Published in: Public Choice | Issue 3-4/2020

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Abstract

Scientific inquiry, like all other human activity, cannot be separated from the humans conducting the inquiry. While public discourse often treats science as sacrosanct and scientists as devoid of any but the purest motives, the science of science literature has long understood scientific inquiry as a fundamentally social activity undertaken by self-interested, partial, human choosers with limited information (Polanyi in Minerva 1(1):54–73, 1962; Kuhn in The structure of scientific revolutions. The University of Chicago Press, Chicago, IL, 1962; Leonard in J Econ Methodol 9(2):141–168, 2002). In this essay, we review the assumptions of two of the original contributions to the science of science literature regarding human agents and compare them to the assumptions underlying economic models. We assert that Michael Polanyi and Thomas Kuhn did for the science of science literature what Buchanan and Tullock (The calculus of consent: Logical foundations of constitutional democracy. Liberty Fund, Indianapolis, 1962) did for politics in the 1950s, which is to reassert behavioral symmetry. We then extend some of Buchanan’s insights from his study of politics and constitutions, public choice and constitutional political economy, to the study of science and draw out implications for interest-group influence in the republic of science.

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Along the same lines, what Lenonard (2002, p. 141) calls “Critical Science Studies” (CSS) has generated a consensus among scholars of science that “science is a social enterprise, and its practitioners are flesh and blood people motivated by more than truth and the social good”.

As we will point out below in more detail, substantial evidence exists suggesting that Polanyi and the scholars at Virginia’s Thomas Jefferson Center had significant opportunities for cross-fertilization. Polanyi spent six months at the TJC in 1961 (preceding the publication of both the Republic of Science and the Calculus of Consent), during which he gave a series of four lectures titled “History and Hope: An Analysis of our Age” (Polanyi 1961). In those lectures, Polanyi developed an articulation of the scientific process distinct from scientific rationalism based on Descartes (among others). Polanyi’s description of the scientific process includes considerations of tacit knowledge, or things the individual “knows but cannot tell”, which Polanyi suggested was connected intimately to individual action and necessarily required a conception of discovery as driven by the individual.

It also is important to note that our description of different contributions as based on the assumption of methodological individualism is not methodologically reductionist in the sense that it assumes individuals behave automictically or in a vacuum. Rather, individuals are modeled as the source of action thay culminates in a pattern of aggregate outcomes that are emergent, i.e., the result of human action but not of human design. For a longer discussion of the methodological individualism see Mises (1949, p. 42).

In The Organization of Inquiry Tullock (1966, p. 158) similarly applies behavioral symmetry to the analysis of science, but concludes much less optimistically than we do here, that the “motives to attempting to obscure or conceal the truth” abound in the social sciences.

Imre Lakatos (1970) also discussed the “hard core” of knowledge that comprise the unchallenged positions that help to define it as a science (see also Caldwell 1991, p. 99).

See Martin (2009) for a discussion of the importance of tighter and weaker epistemic feedback environments for the analysis of institutions.

An interesting connection can be found between Kuhn’s concept of scientific paradigms and Denzau and North’ (1994) concept of shared mental models. Scientific paradigms shape the questions scientists investigate and seek to answer, shared mental models shape the way in which individuals within a society act and perceive the costs and benefits of their actions. In that sense, scientific paradigms may be thought of as the equivalent of shared mental models for scientific communities.

Boettke and Candela argue that the TJC group was responsible for producing insights that were foundational not only for public choice economics, but also property-rights economics and law and economics. Those insights shared what Boettke and Candela call a Wicksteedian reading of Knightian opportunity cost reasoning, which treated opportunity costs not as parameters, but instead variables of economic activity. That particular perspective on the concept of opportunity cost was only possible because the scholars at the center shared strong Chicago school price-theory roots as well as a solid connection to the London School of Economics. By providing their non-paradigmatic perspective on opportunity costs, the development of public choice economics in particular was paradigm-shifting for political science.

Levy and Peart (2020, p. 18) confirm that what brought the Virginia economists together was their Knightian training and the hope of making a difference at the margins of the profession. The letter from Warran Nutter to Ronald Coase includes the following passage: “We have, I think, the makings of what could be a rather interesting little group in Buchanan, Vining, and myself—all solid Chicago products who did our lessons in Knight well.”

The commitment to publication according to disciplinary standards is reflected in the foundational documents of the TJC. In his correspondence with Kermit Gordon of the Ford Foundation, reprinted in Levy and Peart (2020, p. 76 ff.), James Buchanan reiterates repeatedly that he refused “to contribute to doctrinaire publications”; the original grant proposal to the Ford Foundation (also reprinted in Levy and Peart 2020, p. 60) stipulated support for the “publication of the results of research and study.”

Sah and Stiglitz (1986) make an analogous point. They argue that the design of an economic system determines the errors individuals in the system make as well as their aggregate effects.

Unlike politics and science, markets, while not immune from such rationally irrational behavior on the part of individuals, are much less likely to generate that kind of incentive structure because the costs of private irrationality usually are borne by the individual himself. It is only in cases when significant negative or positive externalities of individual action persist that markets can generate similarly inefficient results in the aggregate.

For additional discussions of the problems of replicability and lack of counterfactuals in economics, also see Ioannidis et al. (2017), McShane et al. (2019) and McCloskey and Ziliak (1996).

An analogy can be drawn to Hayek’s (1973, p. 88) discussion of the law developing in undesirable ways and having to be corrected by legislation. Tullock (1966) provides an institutional explanation for the pervasiveness of such cul-de-sacs in the social sciences. He suggests that the social sciences suffer especially from the fact that confirmatory replication is not rewarded institutionally.

The “no true Scotsman” fallacy refers to attempts to protect a generalization from counterexamples by changing definitions of the problems addressed in an ad hoc manner.

For more on how Lakatos is used to “demarcate science and non-science”, see Caldwell (1991, p. 103).

In Economics from the Outside In: Better than Plowing and Beyond, James Buchanan (2007) affirms the general stance of the Virginia research program as applying a scientific understanding of social interactions to the normatively chosen question of how individual can live in a social order while preserving their own liberties. Buchanan (Ibid., p. 107) suggests that “Scholars associated with the program have consistently eschewed the question: How can the state exert more effective control over individuals? Those scholars who associate themselves with the interest of ‘the state’ have never found, and will not find, Virginia Political Economy congenial.”

Our example is developed from comments by Walker Todd based on an earlier version of this paper.

See Phelps (1967) and Friedman (1968) for the original contributions challenging the theoretical foundations of the long-term relationship between inflation and unemployment depicted by the familiar Phillips curve.

See, for example, Blanchard (2016) or Mankiw (2019), or as a retort to Mankiw (2019), Cochrane (2019).

Baumol (1990) argues famously that existing institutions determine the direction of entrepreneurial innovation in society. He specifies three potential directions: productive, unproductive and destructive entrepreneurship.

It is important to note that both rent seeking and market competition both are types of competitive behavior. The way in which competitive behavior manifests, i.e., either as rent-seeking competition (destructive) or market competition (productive) ultimately is institutionally contingent and a direct result of the existing reward structure (Baumol 1990).

As with rational irrationality, rent-seeking activity is more rampant in the social sciences wherein, as Tullock (1966) argues, no standard of replication exists.

In a general sense, all research is entrepreneurship to the extent that it seeks to resolve uncertainty with regard to particular unanswered questions. Polanyi (1962, p. 62) asserts that such entrepreneurial activity is constructive as long as it is guided by scientific opinion, but can become destructive when it is directed toward the creation or extraction of rents rather than mere scientific progress. Kuhn (1962, p. 58) promotes a particularly Kirznerian, error-discovering vision of the entrepreneurial nature of scientific discovery when he writes that “the perception that something had gone wrong was only the prelude to discovery.”

Assuming that a person can seek funds that do not demand an ideological bias, which can work in at least two ways. One is that a biased researcher agrees with a biased funder and funding is available to researchers of many different biases. Alternatively, no bias on the part of funder or recipient is evident.

Polanyi (1962, p. 8) suggests that “only a strong and united scientific opinion imposing the intrinsic value of scientific progress on society at large can elicit the support of scientific inquiry by the general public.”

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Title: Behavioral symmetry, rent seeking, and the Republic of Science
Authors: Diana W. Thomas
Michael D. Thomas
Publication date: 15-04-2020
Publisher: Springer US
Published in: Public Choice / Issue 3-4/2020
Print ISSN: 0048-5829
Electronic ISSN: 1573-7101
DOI: https://doi.org/10.1007/s11127-020-00807-4

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