The specter of irreparable ignorance: counterfactuals and causality in economics

Those economists who have emphasized true uncertainty tended to draw an epistemic distinction between ascertainable past and unknowable future. But in one critical respect—in extracting causal relationships—that is not warranted. Whether they are situated the or future, arguments economics depend equally on counterfactual reasoning. Counterfactualizing entails construction of fictitious narratives—narratives about worlds that do exist. Unfortunately, there no dependable method for ascertaining uniquely correct counterfactual. This implies claims economics, too, irreducibly fictitious. The chief value counterfactuals, then, prove causation but help scholars practitioners confront inscrutable world—to imagine prepare possible futures. In this endeavor, economic pluralism, which expands range plausible be taken as a virtue rather than curse.