The enduring allure of objective probability

Robert F. Mulligan ()
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Robert F. Mulligan: Western Carolina University

The Review of Austrian Economics, 2013, vol. 26, issue 3, No 5, 327 pages

Abstract: Abstract Probability measures are properly considered subjective, if only as a result of the knowledge limitations of human experience. Even if objective probability can be demonstrated as an unambiguously verifiable property of the physical world, our necessarily imperfect access to such aspects of reality would necessitate the construction of subjective probability measures for examinations of human behavior. This paper will explore the distinction between subjective and purportedly objective probability in principle, and demonstrate that actual probabilities can only be subjective, at least ex ante. The paper will next examine the persistent efforts of philosophers, mathematicians, and particularly quantitatively-inclined social scientists, to construct and employ mistaken conceptions of purportedly objective probability. The neo-indeterminist interpretation of sub-atomic particle physics is addressed next, with its attempt to construct an objective-probabilistic account of reality based on the Heisenberg uncertainty principle. An explanation is suggested for the persistent allure of objective probability in the social sciences, which purports to offer a more economical and parsimonious basis for human behavior and the formation of expectations. The view that there are ontologically privileged, objectively-verifiable probabilities and expectations, will be examined and criticized. It appears to be one source of the discredited, though nonetheless widespread and persistent, belief in the efficacy and feasibility of central economic planning.

Keywords: Subjective v. objective probability; Class v. case probability; Relative frequency definition of probability; Neo-indeterminist school; Heisenberg uncertainty principle; Quantum mechanics; Statistical inference; JEL codes:; 3: History of Thought; 5: Methodology; 19: Economics and Philosophy (search for similar items in EconPapers)
Date: 2013
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DOI: 10.1007/s11138-012-0189-1

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