Marginal Thinking about Theories

Some wise advice from p. 26 of Armen Alchian and William Allen’s superb economics textbook Universal Economics (free PDF):

Don’t make the intellectual mistake of asking whether the theory (the set of principles) is “true.” No theory is perfect. Ask instead, “Is it useful and reliable enough for my purposes? That is, will it lead to generally correct implications and guidance at sufficiently low cost without intolerable error?” That’s the question to ask in every discipline, whether Chemistry, Physics, Biology, or Economics.

Besides being good common sense, this is an excellent example of thinking at the margin.

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