Evaluating What Works
Robert Richardson and Matt Statler
Paul Krugman (2009) recently attributed the ongoing global financial crisis to a confusion among economists who have, he alleged, allowed an appreciation of the beauty of certain theoretical models to cloud judgment about their truth. Although organizational theorists have considered the relationship between truth and beauty periodically over the years (e.g., Astley 1985; Weick 1989; Nonaka 1993), no attempts have yet been made to consider the debates among contemporary philosophers about the distinction between facts and values (Putnam 2002). in this chapter, we trace out the history of these philosophical debates, seeking to develop a pragmatic theory of meaning that has general implications for organizational theory and specific implications in view of the ongoing financial crisis.
as a Confusion of Beauty and Truth
In a New York Times column titled “How Did Economists Get It So Wrong?” the Nobel laureate Paul Krugman (2009) alleges that economists have, first and foremost, mistaken beauty for truth. Falling under the woozy sway of predictive power, they have mistaken their models for the real world. As a matter both of disposition and practice, they have gathered data from the world that confirm the veracity of these models, and they have discounted data that do not support them. These mistakes, Krugman claims, set up the global markets for a crisis, and so long as we do not critically examine and learn from those mistakes, we will continue to perpetuate the situation in