[lbo-talk] Economists are the forgotten guilty men

Mike Beggs mikejbeggs at gmail.com
Thu Mar 5 14:57:33 PST 2009


On Thu, Mar 5, 2009 at 3:28 PM, Peter Ward <nevadabob at hotmail.co.uk> wrote:


>
> Well, I'd regard so called economics, of whatever school, a quack science.
> I'm not sure even deserving of being considered a primitive science like
> historic astrology. That serious attempts are never made to test theory
> against reality implies inherent dishonesty and cannot be excused as mere
> ignorance (this is typically avoided by concocting a metaphysical
> distinction between natural science and economics unfortunately the claimed
> distinction is groundless).

This is a big mistake. Economics is a social science. I have no idea why you think the distinction between natural science and social science is 'groundless'. There are plenty of reasons why they are fundamentally different - for a start, the subjectivity of human beings, the impossibility of experimental closure, etc. Some of these problems also exist for some natural sciences also, so I suppose you could argue that there is no firm line - though the problem of human creativity, which means an inherent uncertainty and instability in social processes and structures, is unique to social science

The discipline of economics is also way less monolithic than a lot of people think. There are huge and fundamental differences of opinion and approach, not only between 'heterodoxy' and 'orthodoxy' but within the orthodox itself. Same in every social science. And as Joan Robinson writes in 'Economic Philosophy', there is certainly an ideological component to economics, but there is also a scientific component - even though they are very difficult to disentangle.

As for the question of testing hypotheses, it happens all the time. It is inherently difficult in economics, however, given the impossibility of establishing a closed system, so that absolute falsifications are impossible. This is the same for any social science, but economics is blessed/cursed with an enormous array of quantitative data that holds out a mirage of precision and finality.

So much economics since WWII is held together by an exoskeleton of econometrics rather than the rationalist structure of general equilibrium theory. This is especially true of the practical economics of central bankers etc. The motivation of econometrics as a discipline is the desire to compensate for the lack of closure so that hypotheses can be tested. This can go to empiricist extremes as bad as the rationalist picture you have of economics, and it has a pretty bad track record on long data series simply because social structures evolve qualitatively. But it's not a tendency you seem to be aware of at all.

Cheers, Mike Beggs



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