“Terminology”, as it’s normally defined, signifies specialized jargon. There’s medical terminology, biological terminology and so forth. Some terms refer to different objects within specific classes, broadly speaking, such as anatomical terms and taxonomic terms. Other terms refer to functionality within a system; biological terminology would be a prime example. Moreover, some terms refer to varying logical structures; think of “supervenience” in philosophy. And, of course there is a good deal of overlap between these categories, but these categories are good guides of thought nonetheless.
Today, I want to zero in on Economic terminology; not merely descriptive or functional economic terminology, such as ‘bank’ or ‘lending’, but more correlational terms, such as “adverse selection” and “division of labor”. The binding factor of these ‘correlational terms’ is that they are–in contrast to functional and easily explainable terms–terms that entail relational, sociological processes. Another way in which to think about these terms is that they are “snapshot definitions” of sorts. They attempt to describe complex, relational processes, by isolating certain aspects and solidifying them into an easy-made term. And, in my opinion, the use of terms to categorize and to translate these relations/correlations into varying domains is a risky business. Let’s see why.
Let’s say that, within the economics world, there is a consensus that there is a correlation between the variables, a and b. And let’s assume that they call this relation, C. Let’s also say that there is another accepted correlation between a and d, E. And let’s say that these economists have discovered an “economic law”, stating that:
C, in conjunction with E, leads to F, ceteris paribus.
This law is held to be the last word for quite some time, but one day, the economics world is shaken by the proclamation:
C, in conjunction with E, actually leads to G, ceteris paribus.
But let’s say that the initial effect, F, only known by economists to exemplify the correlation, x^y, actual entails another hidden correlation, b^d. So a variablistic translation of what the economists’ original law actually entailed would look like:
a^b, in conjunction with a^d, leads to x^y(b^d), ceteris paribus.
But, what if the correlation of x^y(b^d) is already recognized by the economists to fall under an entirely separate term, G? And here’s the thing: Even if the economists recognize that there is a hidden variable within the term, F, there is no guarantee that there isn’t another, ill-suited term in use that recognizes this relationship. This is what I call the terminological paradox.
This illustrates an inherent issue with an over-reliance on terminological structure. Economics is a prime example of this, simply due to current position that the discipline is in. Economics is stuck between a deductive, terminological form of reasoning and a relational, variablistic form of reasoning. This predicament can be better envisioned by imagining what predicament physics would be in if, for instance, physicists relied heavily on terminology, rather than mathematics. Terminology certainly has its place, but an over-reliance on it often leads to unnecessary confusion and impedes progress.