Thursday, March 22, 2018

Rick Kelo on the 2 Types of Knowledge

For anyone who didn't feel like torturing themselves in college and sitting through an Epistemology class here's a chance to learn something interesting.  Did you know there are 2 different types of human knowledge?  They exist like 2 mutually exclusive circles:

  • A priori knowledge
  • A posteriori knowledge
Rick Kelo, a West Point graduate and Chicago tax recruiter, recognizes the importance of distinguishing between these two types of knowledge.  They apply in almost every public discussion of any political or economic topic.  A priori knowledge is proven by logically sound deduction.  It cannot be disproved by empirical measurement.  A posteriori knowledge is proven by empirical measurement and can be disproved by contradictory measurements.

This becomes important because something that we know through a priori knowledge cannot be disproved by quantitative measurements.  For example, you cannot disprove the Pythagorean Theorem by running around measuring triangles.

Now consider a hot political topic: the Minimum Wage.  As Rick Kelo shares, economists have a universal law called the Law of Demand.   It was established by logical deduction, or is a priori knowledge.  It states that if the price of something goes up, then the quantity demanded goes down.  So when you apply that universal law to the Minimum Wage it teaches us that if we raise the price of labor per hour, then the hours of labor that employers will purchase goes down.

In other words: unemployment rises!

There have been some poorly conducted empirical studies that seem to show otherwise, Richard Kelo notes.  One such infamous study was a 1990 study by David Card and Alan Krueger.  Except, because we know the Law of Demand is proven a priori any a posteriori study that seems to contradict it must contain flaws, just as Card & Kreuger was later shown to contain.

Rick Kelo