RALEIGH – Let’s talk about the physicist Stephen Hawking, black holes, and the John Locke Foundation – even at the risk of setting up a joke about black holes and the John Locke Foundation.

Hawking, the Cambridge professor and bestselling author of A Brief History of Time, did something rather remarkable last week. He admitted a significant error in his previous theory of how black holes form and function. Speaking at a conference in Ireland, he offered a solution to a decades-old problem: if black holes are so dense, emanating such powerful waves of gravitational force that they prevent all matter from escaping, what happens to it? Such a conception of black holes suggested that the matter and energy were destroyed, that “all information about phenomena were lost” as physicists might put it. But that contradicts the long-established principle that they must continue to exist in some form. (Newton originally argued that neither could be destroyed. Einstein’s revision was that matter could be converted to energy, but still not destroyed.)

Hawking – who early in his career had formulated the initial theories about the event horizons of black holes that allowed them to be studied as something other than theoretical constructs – had once “solved” this paradox with the rather Roddenberry-esque theory that perhaps black holes allowed matter and energy to escape into another universe. This opened up intriguing sci fi possibilities – but alas, now Hawking says that theory doesn’t wash.

As the Associated Press reports it, “Hawking’s answer is that the black holes hold their contents for eons but themselves eventually deteriorate and die. As black holes disintegrate, they send their transformed contents back out into the infinite universal horizons from whence they came.”

Hawking had even bet a fellow scientist, John Preskill, that his initial theory was correct. Now, 29 years later, Hawking has paid off the bet with a gift to Preskill of a baseball encyclopedia. For his part, Preskill feels vindicated but says he doesn’t understand Hawking’s new theory (making me feel a lot better).

The point here is not about black holes. It’s about the nature of scientific inquiry. I’m a (partial) fan of Karl Popper, so I don’t buy the notion offered up by logical positivists that science consists of a systemic attempt to prove theories true. Rather, science consists of formulating a theory inductively that seems to fit the available facts and then deductively gathering more data and conducting experiments to see if the theory can be proven false. Importantly, to show a theory is not true represents not failure but success; knowledge is expanded by the process of elimination.

Market economies thrive because of the same process. Entrepreneurs form a theory about what consumers want to purchase and then coordinate business enterprises to test the theory. They are hoping to succeed for as long as possible, of course, and are rewarded if they do. But for the economy as a whole, failure is also valuable because it identifies what not to do. Others learn from that failure. There is no permanent solution to an economic problem, by the way, as preferences and capabilities are constantly changing. Both science and business are open-ended systems, predicated on an uncertain future.

The connection to the work of the John Locke Foundation doesn’t just have to do with our efforts to ensure that entrepreneurs have the freedom and the incentives necessary to address economic problems. It also has to do with our mission. I am frequently asked how the Locke Foundation can be a serious public-policy institute while also espousing a particular point of view – that of John Locke (who himself had something to say about acquiring knowledge), the American Founders, and the classical liberal tradition.

My answer is that before you can test a theory, you must form a theory. Our theory about how government works (or fails to work) appears to fit the available facts about human nature and human history. It is our tool of analysis. If someone tells you that he is approaching an issue with no preconceived notions, no sense of what patterns he might find in the data, then you know he is either not being honest with you – or, like the logical positivists, is fundamentally in denial about how useful knowledge is obtained.

Hood is president of the John Locke Foundation and publisher of Carolina Journal.