Deduction is as different from Inference as Chalk from Cheese. Deduction is very specific and contextual. It is the necessary tool for urban survival and used by all clever and pragmatic people. Inference is less obvious and quintessential, tested over many situations and across time. Only half mad people can pursue inference as some kind of distilled truth or philosopher's stone. But mathematics has grown in modern era and now offers many scientific tools to make Inference.

An Inferential model is a great leveller, It makes achievement and fallibility, prosperity and poverty and any pair of opposites amenable to measurement based and un- biased study.  It cannot be constructed on few observations of one individual which are at best deductive and on the worst side, a cuckoo in the hat. The very existence of contradictions like market based economy that increases inequity and welfare economics that seeks to reduce inequity can be studied through an inferential model.

The Basel regulation of the Banking sector implemented across all nations is an example of an Inferential Model. It captures capital requirement of various competing sub-businesses of banking and lays down prudential norms. Yet its existence reminds us that the role of the Banking sector in creating asset prices has been kept outside the ambit of the model and is a stark need of the hour. That is where the political economy steps in with its received wisdom.

It is true that we all have to fight the daily onslaught of traffic on the road and bacteria in our food and we make some good deductive decisions everyday to manage our time and to keep ourselves healthy. But getting the Inferential piece correct becomes the raison d' etre for institutions and corporations. If it doesn't exist then we have accountants running these organisations !!!