We here deliberately refer to Bochenski (1956, 1970:20): “The word ‘proposition’ has been variously used, (...) nowadays commonly as the objective content of a meaningful sentence”.
Some students of the History of Economic Thought will see a clear resemblance of above methodology and what Schumpeter called the “Ricardian vice”. Quoted by Tintner (1968:7):
“His interest was in the clear-cut result of direct, practical significance. In order to get this he cut this general system to pieces, bundled up as large parts as possible, and put them in cold storage - so that as many things as possible could be frozen and “given”. He then piled one simplifying assumption upon another, until, having really settled everything by these assumptions, he was left with only a few aggregative variables between which, giving these assumptions, he set up simple, one-way relations so that, in the end, the desired results emerged almost as tautologies.”
This is almost exactly what we shall do, except that we generate tautologies.
Step (d) comes closest to the Popperian falsificationist criterion. Our deductions need not be insulated against testing, even though this present book abstains from econometric testing since we are too much involved in creating our concepts and constructing consistent and useful propositions. [67] Abolishing the Tax Void is a good and cheap test anyway for the relevance of this analysis.
It is useful to keep Solow’s comment in mind:
“There is something deeply satisfying - not to say suspicious - about any proposition that seems to deduce important assertions about the real world from abstract principles.” (1976:148)
So, advisedly, the reader better checks what we are doing here, and governments should run their own regressions and models before they make policy decisions. But of course I only dare to present my results here since I am confident that they, in the hands of competent and true scientists, allow a real advancement.
Relating to Hicks 1983
In his essay “A discipline not a science” (1983:365-375), John Hicks argues that economics is too far from the accuracy reached in the material sciences, and explains that he cannot ‘altogether’ deny that he himself has converged on a ‘critical’ attitude. This attitude concentrates on the clarification of terms, i.e. their definitions, also by using quite unrealistic models. For example: “Though the concepts of economics (most of the basic concepts) are taken from business practice, it is only when they have been clarified, and criticised, by theory, that they can be made into reliable means of communication.” (p372-3).