The the process of generalizing during deduction, a

The received view derives from the philosophy of logical practivism,
where knowledge arises from logic/logicism and sense experience/empiricism. It
employs the demarcation criterion, only accepting analytic1 and
synthetic statements, to distinguish scientific knowledge from other knowledge
forms2. Scientific theories organize observational
(obtained by sense experience) data3
and theoretical statements through correspondence rules, explaining certain
studied aspects and establishing fundamental laws in case of regularity of
events. Since laws are dependent on the process of generalizing during
deduction, a necessary requirement of the tested condition is
the absence of a restricted time period and special region. This is problematic
due to the difficulty of certainly stating that something is always true,
especially in case of economics, – a future observation may not always confirm
past generalizations 4
i.e. laws sometimes cannot be verified, being one of the main flaws of
logical positivism.

The establishment of universal laws5 is key
for knowledge in logical positivity. It is often impossible to conduct
experiments because of the nature of the case studied, especially in economics.

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Trygve Haavelmo’s method of establishing laws outside laboratory6 separated
potential and factual factors affecting a certain economic variable (y), determining the degree of
consistency of relationships over time. Yet, while a system of casual factors
may explain a variable, there are still unlimited factors with potential impacts
on y. Furthermore, empirically found
relationships tend to be simpler than theoretical7, as it
is occasionally impossible to identify reasons for factor’s factual influence. Cowles
Commission reduces the incompleteness of empirical determination by deriving complete
systems of descriptive equations in increasingly comprehensive model, includes
many influencing factors to predict consequences of policy changes. Despite the
increased sophistication of the model, it could still not assert that such econometric
models certainly predict the impact of policies.

The problem of positive economics originates from shortcomings of
scientific methodology of logical positivism, impeding it from being
independent of normative judgments or limited empirically based generalizations.

The difficulty of making deductive generalizations hinders its predictive ability.

While generalizations’ objectiveness can be improved through precision, scope
and conformity, they are still not always universal due to differing economic
conditions and dynamics in each case. I believe despite the difficulty in describing
economic theories as universal laws, like in science, it becomes less problematic
from the instrumentalist8 perspective;
the usefulness of a certain theory may be more important than its accuracy. The
principle of confirmationism9 may also
be applied to economics, since it is not possible to obtain exact predictions
of economic out comings, theories may be used to expect outcomes with a certain
probability.

1 Analytical
statements are true by definitions, such as specific meanings of terms (e.g. nucleophile is a chemical species that donates an electron pair to an electrophile), while the latter are proven by
empirical research, with either synthetic data (obtained through sense
perception) or predicates (empirically verifiable).

2
Mainly pseudo-science.

3
Synthetic or predicates

4
Hume, 2007

5
Empirically

6
Boumans & Davis, 2016, p.40

7
Boumans & Davis, 2016, p.41: “cannot
always distinguish whether the potential influence is small or whether the
factual variation of this factor … is non-existent.”

8 Boumans & Davis, 2016, p.19

9 While the outcomes of a certain
economic policy are specific to each specific circumstances, some general
outcomes are likely to appear to an extent.