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Bonus Quotation of the Day…

… is from page 354 of the 2014 collection, The Market and Other Orders (Bruce Caldwell, ed.), of some of F.A. Hayek‘s essays on spontaneous-ordering forces; this particular quotation is from Hayek’s January 1970 lecture at the University of Salzburg, “The Errors of Constructivism”:

[I]t is not, as may sometimes appear, the progress of science which threatens our civilization, but scientific error, based usually on the presumption of knowledge which in fact we do not possess.

DBx: Facts, by themselves – no matter how well and beautifully processed and organized they might be – are never knowledge.  Reason – abstract thought and theorizing – are necessary to extract from such facts whatever knowledge they can convey to us.  But even theories and models – regardless of their elegance or complexity – must be handled with care and wisdom.  There is no recipe or scientific formula for distinguishing ‘good’ theories from ‘bad’ theories, or helpful theories from misleading theories.  That task ultimately falls to those most elusive of qualities, wisdom and good judgment.

Too many are the people who, having mastered econometrics and gathered lots of data, wrongly suppose themselves thereby to possess knowledge.  Likewise, too many are the people who, having mastered mathematics and memorized the mechanics of lots of theoretical models, wrongly suppose themselves thereby to possess knowledge.  Too rare are the people who correctly understand that, no matter how smart they are and how much they might genuinely learn about economics, econometrics, and ‘the data, neither they nor others can ever hope to come close to knowing the details of economic reality in the same way that, say, a physicist can know the details of some physical material under his or her investigation.