“A puzzling feature of the many contributions in economics that refer to Karl Popper’s writings is how few of them mention his propensity interpretation of probability.(1) This may well be because this interpretation was initially proposed with physics in mind (Popper 1967). Yet by the end of his life it had become clear that his propensity theory had developed into something with much wider implications. As he puts in his last book, after he had first proposed it in the 1950s the “theory had further grown so that it was only in the last year that I realized its cosmological significance. I mean that we live in a worm of propensities, and that this fact makes our world both more interesting and more homely than the world as seen by earlier states of the sciences” (Popper 1990: 9). My aim in this paper is to document this development, to point out its affinities with Critical Realism (CR), and to raise some implications for two prominent Popperian themes in economics.”

http://mises.org/daily/3779