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POLITICS IN DISGUISE
by Jay Hanson
A large percentage of the Nobel laureates in economics live in cocoons.
-- E.O. Wilson
The problem is, of course, that not only is economics bankrupt
but it has always been nothing more than politics in disguise ...
economics is a form of brain damage. -- Hazel Henderson
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Economics should be seen as politics -- not science -- for two reasons:
(1) Economists do not use the "scientific method". (2) The economist's agenda is explicitly "normative" (political).
The scientific method is the best way yet discovered for winnowing the truth from lies and delusion. The simple version looks something like this:
1 Observe some aspect of the universe. 2 Invent a theory that is consistent with what you have observed. 3 Use the theory to make predictions. 4 Test those predictions by experiments or further observations. 5 Modify the theory in the light of your results. Go to step 3. [ http://www.xnet.com/~blatura/skep_1.html ]
Economists will argue that "Economic systems are generally too complex to be replicated in a laboratory environment, so economists analyze the data."
But consider the POLITICAL heart and soul of economics: the "rational utility mazimizer".
"One of the peculiarities of economics is that it still rests on a behavioral assumption -- rational utility maximization -- that has long since been rejected by sociologists and psychologists who specialize in studying human behavior. Rational individual utility (income) maximization was the common assumption of all social science in the nineteenth century, but only economics continues to use it.
"Contrary behavioral evidence has had little impact on economics because having a theory of how the world 'ought' to act, economists can reject all manner of evidence showing that individuals are not rational utility maximizers. Actions that are not rational maximizations exist, but they are labeled 'market imperfections' that 'ought' to be eliminated. Individual economic actors 'ought' to be rational utility maximizers and they can be taught to do what they 'ought' to do. Prescription dominates description in economics, while the reverse is true in the other social sciences that study real human behavior." [p. 216, Thurow, 1983, http://dieoff.com/page162.htm ]
The reason that economists cling to nineteenth-century behavioral assumptions is because without them, they are out of a job!
It's a fact of life that economic theories can only be replaced by better economic theories. And since economists can not invent a better theory because of a fundementally-flawed world view, they work to make the world match existing theory. If economists told the truth, they would be unemployed.
The solution of course, is to junk economics, economists and start over:
"No compelling reason has ever been offered why the same strategy [of consilience] should not work to unite the natural sciences with the social sciences and humanities. The difference between the two domains is in the magnitude of the problem, not the principles needed for its solution." -- E.O. Wilson http://www.theatlantic.com/unbound/bookauth/eow1.htm
Jay
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