It is generally considered that a theory must be supported by facts. The problem with the use of data as a support of a theory is the interpretation of such data.
An example helps to understand this. If a historian discovered that due to an increase in the supply of a product X, the price of the product increases instead of decreasing, is that enough to discredit the law of supply and demand ? Of course, no. Confounding factors may have come into work. For example, a dramatic drop in the supply of a product Y, which is a substitute to the product X. The very idea of accepting a theory because it receives some ’empirical support’ is absolutely ridiculous. In the given example, this means that the law of supply and demand is erroneous. It would be difficult to believe that when the supply of a good increases, it will not exert any downward pressure on prices. No one would believe that the infinite use of printing money wil not diminish the value of the money. And no one would believe that one seller facing a countless number of buyers will not exert any bargaining power.
Likewise, if one makes the assumption that incarceration rate decreases criminality, and that statistics have once shown that there was an increase in criminality following an increase in the prison population, does that mean that the incarceration rate tends to increase criminality ? This assumption makes absolutely no sense – there are confounding factors that came into play, which are not captured by data. In other words, if crime has increased following an increase in the number of prisoners, we should say that crime would have been higher if incarceration rate has not increased. The facts and historical evidence are meaningless if we fail to interpret it correctly.
Accepting an illogical theory just because it is supported by data is a mere fallacy.