# Fundamental Uncertainty: Rationality and Plausible Reasoning

Uncertainty, plausible reasoning and the continuum of inductive methodsA refinement of the distinction between risk and uncertainty: fundamental uncertaintyPlausible reasoning under fundamental uncertaintyThe scope of the volume and its contributionsEpilogueNotesReferencesLogic, Empiricism and Probability StructuresKeynes's Treatise on ProbabilityLogic and empiricismProbability a logical relationProbability valuesRamsey's criticismA logical relation?Dutch BookBlack and white ballsAssessing the philosophical issuesNotesReferencesThe Weight of ArgumentThe somewhat novel questionPeirce on balancing reasonsKeynes as a conceptualistKeynes on frequentismIs more information always a good thing?Keynes and Ramsey (and Savage and Good)Inductive warrant and weight of argumentNotesReferencesA Critical Evaluation of Comparative ProbabilityIntroductionProbability as the degree of rational beliefThe epistemological dilemma between quantitative and qualitative probabilitySufficient condition of comparabilityComparative indifference principleConclusion: epistemological advantages of comparative probabilityNotesReferencesA Theory of Similarity and UncertaintyTwo sides of uncertaintyVariety and typesImprecise circumscriptions and limited uniformityPolar and intermediate casesPatterns of similarityOntological criteria and epistemic criteriaSimilarity relations and measures of distanceUncertainty under similarity structuresOrders of similarity and similarity judgementsSimilarity, likelihood and uncertaintyShort-term and long-term orders of likelihoodReasoning with uncertaintyCognitive tension under fundamental uncertaintyBalancing actsNon-exclusion, uncertainty, and similarity thresholds: concluding remarksNotesReferencesGeneralized Theory of Uncertainty: Principal Concepts and IdeasIntroductionUncertainty and probability theoryThe concept of NL-computationThe concept of precisiationThe concept of cointensive precisiationA key ideaâ€”the meaning postulateThe concept of a generalized constraintPrincipal modalities of generalized constraintsThe concept of bimodal constraint/distributionThe concept of a group constraintPrimary constraints, composite constraints, and standard constraintsThe generalized constraint language and standard constraint languageThe concept of granular valueThe concept of protoformThe concept of generalized constraint-based computationProtoformal deduction rulesExamples of computation/deductionThe Robert exampleThe tall Swedes problem We start with the information setTall Swedes and tall ItaliansSimplified trip planningConcluding remarkReferencesWeight of Argument and Economic DecisionsIntroductionDefinitions of 'weight of argument'Weight of argument and modalities of uncertaintyPractical relevance of the weight of argument: preliminary analysisThe weight of argument in the light of theory of decision under uncertaintyThe weight of argument in the General TheoryConcluding remarksNotesReferencesThe Relevance Quotient: Keynes and CarnapIntroductionFrom the coefficient of influence to the relevance quotientThe formal definition of the relevance quotientRegular probabilitiesExchangeable probabilitiesExchangeability, independence and relevance quotientInvariant probabilitiesThe main theoremA new demonstrationInductive applicationsParticle statisticsClosed dynamical systemsDestruction and creation probabilitiesUnary movesTwo economic applicationsCustomers and shops: Ewens's limitStock-price dynamics: thermodynamic limitThe role of probability in economicsReferencesNon-Self-Averaging Phenomena in Macroeconomics: Neglected Sources of Uncertainty and Policy IneffectivenessIntroductionCoefficient of variation and policy ineffectivenessBinary choice: model 1Policy multiplier in binary choice: model 2Two-parameter Poisson-Dirichlet distribution of innovation arrival processesGDP is non-self-averagingMittag-Leffler functionIneffective policy choices in non-self-averaging modelsThe non-self-averaging phenomenon in two blocks of economiesThe master equation, probability generating function and cumulant equationsThe dynamics for the mean and the covariance matrix elementsThe behaviour of the coefficients of variationRelated simulation studiesNon-self-averaging triangular urn modelsBalanced triangular urn modelsConcluding remarksAppendix: Mittag-Leffler function and its distributionNoteReferencesA Critical Reorientation of Keynes's Economic and Philosophical ThoughtsIntroductionInduction and the 'atomic' universeA model of ethical behaviour and the atomic hypothesisThe Quarterly Journal of Economics article and the atomic hypothesisThe General Theory and the atomic hypothesisThe 'theory' of effective demandThe 'principle' of effective demand: Pasinetti's viewThe Keynesian world view: deterministic uniformity in the macro world versus the uncertainty of an individual unit in the micro worldThe 'whole-parts' issue: views of scientists and scholars in the natural and moral sciences15Physicists' views of natural lawsThe sociological view according to Emile DurkheimSaussure's view of 'systeme'Sraffa's production system: a theory independent of the atomic hypothesisA critical reorientation of Keynes's economic theoryNotesReferencesUncertainty and Rationality: Keynes and Modern EconomicsChanging views about the future in a monetary economyNon-ergodicity, Keynesian uncertainty and probabilistic riskKnight's and Keynes's distinction between risk and uncertaintyPost-Keynesians, historical time and crucial decision makingInstrumental rationality, cognitive rationality, and the structure of long-period expectationsNew Classical Economics and Keynes's stochastic processesKeynes' conception of instrumental rationalityUncertainty and long-period expectationsConcluding remarksNotesReferencesMoral Good and Right Conduct: A General Theory of Welfare under Fundamental UncertaintyIntroductionWelfare theories based on the ethics of motiveTraditional utilitarianism: BenthamismThe neo-Humean viewOrdinal utility: new welfare economics and the theory of social choiceCardinal preferences: Harsanyi's rule utilitarianismInstrumental rationality and ethics of motiveSubstantive rationalityMaximization of expected utility, and bounded rationalityWelfare theory and ethics of end: from Moore to KeynesThe nature of the good: the ideal as a state of mindKeynes's moral philosophy and theory of rational decisionsKeynes' view of moral value: the principle of organicismEthical goodness and economic welfareEthics of end and right conductKeynes' criticism of ideal utilitarianismLogical probabilityWeight of argument and moral riskRight conduct when knowledge is not enoughRational dualismOther procedures: conventional judgementDiscussion: A general theory of welfareSubjective valuesObjective valuesConclusionNotesReferences