testimony
Hayek: the pretence of knowledge (1974) From Friedrich Hayek's 1974 Nobel lecture, *The Pretence of Knowledge*. Delivered at the height of the stagflation that the Old Keynesian framework had described as theoretically scarce; the lecture's argument is that the postwar fashion for treating economics as a quantitative-predictive science had produced policy advice exceeding the field's actual epistemic warrant.
From the 1974 Nobel lecture, on the limits of quantitative-predictive economic science.
It seems to me that this failure of the economists to guide policy more successfully is closely connected with their propensity to imitate as closely as possible the procedures of the brilliantly successful physical sciences — an attempt which in our field may lead to outright error.
Delivered in Stockholm in December 1974 with US CPI inflation running near 12 percent and unemployment rising — the conditions the postwar Phillips-Curve consensus had described as theoretically scarce — Hayek’s lecture is the most direct articulation of the Austrian methodological objection to the postwar mainstream. The “pretence” of the title is the field’s pretence that complex social phenomena admit the same quantitative-predictive treatment as simple physical ones; the argument is that the resulting policy advice has overstepped what the discipline actually knows. The lecture is widely read as the symbolic moment at which the Austrian framework received its fairest postwar hearing — coincident with Friedman’s 1968 natural-rate prediction coming due in the data.
Friedrich Hayek , 1974. Friedrich A. Hayek, 'The Pretence of Knowledge,' Nobel Memorial Lecture, December 11, 1974. . source ↗
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