>Anyway, I thought you were arguing that explanations are arbitrary, "explanatory posits", and wouldn't that mean that an explanation doesn't improve prediction?

I don't mean to say that explanations are arbitrary, rather that causes are not observed only inferred. But we infer causes because of the explanatory work they do. This isn't arbitrary, it is strongly constrained by predictive value as well as, I'm not sure what to call it, epistemic coherence and intelligibility maybe? Explanatory models are satisfying because they allow us to derive many phenomena from fewer assumptions. Good explanatory models are mutually reinforcing and have a high level of coherence among assumptions ("epistemic coherence"). They also require the fewest number of assumptions taken as brute without further justification ("intelligibility").

Why think explanatory models are better at prediction? Because the mutual coherence among assumptions and explanatory power of the whole (ability to predict much from few assumptions) suggests the explanatory model is getting at the productive features of the phenomena that result in the observed behavior. Essentially, the fewer number of posits, the fewer ways to "bake in" the data into the model. If we were to cast this as a computational problem, i.e. find a program that reproduces the data, shorter programs are necessarily more explanatory. There's no other way to explain the coincidence of program picked out of a small space generating data picked out of a very large space without there being an explanatory relation between the two. Further, our credence for explanation increases as the ratio of the respective spaces diverge.

This is really the problem of machine learning in a nutshell. Is the data vs parameter count over some threshold such that training is biased towards explanatory relations? Is the model biased in the right way to discover these relations faster than it can memorize the data? LLMs seem to have crossed this threshold because of the massive amount of data they are trained on, seemingly much larger than can comfortably be memorized, and the inductive biases of Transformers that search the space of models to extract explanatory relations.

>Are you saying that including explanations in training data can improve prediction? That would make sense, but this is very hard to do when training a predictive model on text. In that case, the explanations are at best hidden variables and language models are just not the right kind of model to model hidden variables.

I agree with this, and I think these explanatory relations are implicit in human text. I gave the example in another comment that I say things like "I picked my cup off the floor" rather than "I picked my cup off the ceiling" because causal relations in the real world influence the text we write. The relation of "things fall down" is widely explanatory. But it seems to me that LLMs are very much general modelers of hidden variables, given the wide applicability of LLMs in areas that aren't strictly related to natural language. But then again, any structured data is a language in a broad sense. And the grammar can be arbitrarily complex and so can encode deep relationships among data in any domain. Personally, I'm not so surprised that a "language model" has such wide applicability.