Of course, this process of extraction of information from a data is lossy, almost never lossless (in some purely classification sciences it may be discrete and lossless, but it&#x27;s a totally different story). Data is not perfect, and the required precision is always finite. Once you take it into account, you can think of the entire process of scientific discovery as a mechanical, dumb data compression.<p>So, the corrected wording for that paragraph should be the following:<p><i>Plausible-sounding theories are believed to be true as long as their numeric predictions conform to all of the experimental facts within this theory supposed range, up to this theory supposed precision.</i><p>And a theory falsified by a new set of facts does not become immediately &quot;false&quot;. It just get its range cut down to that range of facts where it is still giving an acceptable prediction precision.<p>Back to physics analogy, the phlogiston theory is still <i>correct</i> and <i>true</i>, as long as it is applied within the range of the phenomenological thermodynamics. But this does not happen in the classic economics - all those crazy theories are coming from the depths of an insane mind, not from any particular set of facts. They never had any specific range where they were known to be applicable. Therefore, phlogiston is science, and economic theory is not.