Dear Duncan:

At least since Hacking's volume The Emergence of Probability, it is
commonplace that Keynes's Treatise revived the epistemic approach to
probability, in opposition to the frequency approach. But this must be
distinguished from the subjective approach, for Keynes's insisted on the
logical character of his idea of probability relations.
Whether he later surrendered to Ramsey's critique and then abandoned his
early epistemology is controversial. But Keynes never the endorsed sharp
probability assignments on which de Finetti and Ramsey based their on
subjective approach. It remains to see whether a Bayesian approach is
compatible, for instance, with a set a probability priors as proposed by
Isaac Levi, who also refers to Keynes's Treatise.

Best regards, Carlo Zappia

On Wed, 12 Aug 2015 07:25:58 -0400, Duncan Foley <[log in to unmask]> wrote:

>Dear Pedro, Rob, and others,
>
>As I read the Treatise on Probability it appears to me at its heart to be
an attempt to outline the approach to inference that later developed into
“Bayesian” probability using language that Keynes thought might be
acceptable to the philosophical tradition of the Cambridge of his time (and,
given lags and the Great War, perhaps ten or fifteen years before the
publication of the Treatise). The important themes of the Bayesian approach
are a “subjective” view of probability as a statement of the degree of
belief of a decision maker given particular evidence (or information), and
the importance of “prior” judgments as to possible hypotheses in
disciplining quantitative inference. Keynes characteristically emphasized
the many factors that make the application of this model to social and
economic phenomena, particularly inferences and predictions about
macroeconomic fluctuations and financial asset prices (which Keynes had been
observing as a participant for some time) problematic.
>
>The two central elements in Keynes’ critique seem to me to be the
difficulty in establishing a coherent prior over social and historical
events, and the ensuing incoherence of trying to express inferences and
judgments in quantitative form as numerical probabilities. I don’t think
Keynes had much quarrel with the Bayesian (or Laplacian) analysis of games
of chance or scientific data generated by observation of nature, but had
severe doubts about the applicability of these methods to human historical
sciences, of which economics (or political economy) is an example.
>
>A particularly relevant issue in this respect is the interpersonal aspect
of prior formation and the process by which communities form consensus on
priors, which Keynes seems to have thought of as “conventions”.
>
>Keynes’ views on these fundamental issues do not seem to have changed
much over his career. He consistently deprecated the idea of what we now
think of as “econometric” estimation of probabilities over complex
social and economic events as a kind of fantasy. Keynes was intensely
interested in economic data and a pioneer in the organization of national
income accounts so his attitudes were far from anti-empirical. His
philosophical investigation of probability seems to have convinced, him,
however, that the project of applying systematic theories of quantitative
inference at aggregate levels was a will o’ the wisp.
>
>Duncan Foley
>
>> On Aug 12, 2015, at 5:31 AM, Rob Tye <[log in to unmask]> wrote:
>> 
>> Dear Pedro,
>> 
>> OK – I take your point.  But the sort of suggestion Wittgenstein seems
to be
>> making in that LP quote, and later much expanded on, seems to have been one
>> just as clearly in the mind of the early Keynes himself, so to me, the
>> question reads rather like: ‘did the early Keynes influence the later
>> Keynes’ (answer: yes).  Skidelsky mentions a close intellectual
relationship
>> between the two began on 30th October 1912.  Wittgenstein was then new to
>> philosophy, but Keynes had by then been working on exactly these matters for
>> 6 years.
>> 
>> The Walley work certainly builds on a position taken in the later part of
>> the Keynes Treatise.  But it, (like Keynes himself) seems to contradict what
>> is very prominently stated in the first part of the Treatise.  If Keynes
>> meant ‘fuzzily numerical’ by ‘not numerical’, he surely owed it
to his
>> reader to say that clearly from the onset?
>> 
>> Best Wishes
>> 
>> Rob Tye
>
>Duncan K. Foley
>Leo Model Professor
>New School for Social Research
>Department of Economics
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