Guardian publishes a no brainer–economics is not a science

I thought that economics was more than it is when I was first attracted to it 25 years ago. I figured since economics is so influential in the public sphere, it had good methods.

When I read von Mises, Hayek, Sowell, Hazlitt, Skousen and others, I was educated to the limits of economics as a social science–it is a study of human economic behavior–and limited by the complexities of human action (I stole that from von Mises).

Hayek said the “fatal conceit” was born of intellectuals with the pretense that they could accumulate enough knowledge to make central planning of economies possible–leftist still promote that canard, on display with Keynesian nonsense like Krugman at the NYT and the behavior of the Federal Reserve nomenklatura.

This essay in The Guardian proves that even a bad newspaper can get it right sometimes, even bloody eyed socialists can identify hocus pocus and pretense, even though lefties have more pretensions than most.

I would add another significant contribution of this author–the problem of culture of banking and finance. It should not be ignored that behavior of people in banking and finance is now ruthless and often immoral, very short term and selfish so that institutions are put at risk.

The essay tells the story of Alan Greenspan’s naivete’, a naivete that is inexcusable in a man with his experience and knowledge–he couldn’t imaging people allowing their own banks to go down if the actions taken would allow personal gain? Really? A self serving pretentious person can’t imagine an amoral manipulative banker or two?

Economics is a social science, and things happen because of personal interests and knowledge of the systems.

At one time, about 20 years ago I knew a PhD from U of Chicago so I asked him what he knew about von Mises, and Hayek. I was shocked when he told me he knew nothing about their ideas, that econometrics was all the rage when he was at U of C. He claimed he enjoyed reading Human Action (1949), Socialism (1936), that I provided for him with all my dog ears and marks. I kinda doubt it. Since Hayek was at U of Chicago, but not liked there, I didn’t bother to offer him Road to Serfdom (1944), or The Fatal Conceit (1988), two of the most popular economics books ever.

So economics is a social science–I do believe and economists may be deluded.

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9 responses to “Guardian publishes a no brainer–economics is not a science

  1. Oh, please…

    YES, economics is a science. The Guardian seems to think that a specific theory being wrong somehow makes the entire field magically not-science, which is ridiculous. Scientists can’t ever be wrong now?

    • sorry IKO, a science has reliable methodologies that allow for applying rules that work to make reliable predictions about would happen If. . .

      If you want to insist that a study of chiropractic or acupuncture, or something unhinged from basic physiology and anatomy is a science or if you would like to consider the social sciences science because they claim it–then go right ahead. I guess I find it impossible to ignore the soft discpiplines as distinct from the hard ones. I will grant you some gray zones Where fuzzy science is all we can generate, and that occurs in almost any area of intellectual inquiry. Economists are still struggling with methodologies and reliability at the core, hard sciences are well advanced by comparison.

      The point is that a science has reliable methodologies and verified and replicated findings.

      That’s why Popper said Freudian theories were not science and when he had some cojones he said that darwinism was not science.

      social sciences can occasionally approach reliable methodologies and reliable findings that will be replicated, but economics will only reach that status if it can predict things reliably–and we know they haven’t done so well.

      They will have to be sorta science or half science or unreliable inquiry that looks scientific?

  2. “science has reliable methodologies and verified and replicated findings.”

    Nope. That is a GOAL, but science is a PROCESS.

    And, in the real world, Economics does in fact possess “reliable methodologies and verified and replicated findings” Your ignorance of them does not make them go away.

  3. My ignorance is not the issue, the ignorance is your committment to the idea that economics has reliable methodologies and produces reliable evidence that justifies claims of knowledge.

    I think you lose on that one–economics “experts” not only don’t know what is going to happen, they hardly know what has happened.

    Blow hard and posture, Still won’t make economcis a reliable endeavor.

    It is hocus pocus. Give it up, you are betting on a lame horse.

  4. Uh, actually your ignorance is exactly the issue. You don’t understand economics, and you don’t understand science in general.

    That you bring up Keynes is telling. Gee, Keynes was wrong, so all of economics is wrong? What about Ramsey, Solow, Tobin, Sidrauski (and their many and varied coauthors)? They weren’t wrong.

    Why didn’t economists predict the Great Recession? Well, we DID predict the collapse of the housing bubble. That was a no-brainer. When exactly? Insufficient information, sorry. And that a recession would follow was pretty obvious.

    Great Recession? Well, that wasn’t caused by the housing bubble. That was caused by government reaction. Predicting exactly what government will do? Sorry, insufficient information. Can YOU predict their future policies? No? Then don’t condemn us for it.

    I know what the information I have will lead to. I can’t tell you about the information I lack.

    Your favorite physicists know every force that acts on a die and the effect they will have. They still can’t predict a die roll in the real world. They don’t have the necessary information. Apparently by your standard, physics is not a science then. In fact NOTHING is a science by your ridiculous ‘rules’.

  5. My ignorance is not the issue, the ignorance is your commitment to the idea that economics has reliable methodologies and produces reliable evidence that justifies claims of knowledge.

    I think you lose on that one–economics “experts” not only don’t know what is going to happen, they hardly know what has happened.

    Blow hard and posture, Still won’t make economics a reliable endeavor.

    It is hocus pocus. Give it up, you are betting on a lame horse.

  6. “My ignorance is not the issue, the ignorance is your commitment to the idea that economics has reliable methodologies and produces reliable evidence that justifies claims of knowledge.”

    Yep. Know the difference between us? I actually studied economics. You didn’t.

    von Mises, Hayek, Sowell, Hazlitt, Skousen

    Interesting list. But what do you think it’s a list of? Where are the economists? Where are Marshall, Hicks, Arrow, or Becker? (not to mention a myriad of others).

    Of that list I read Hayak. Period. For my own interest. No economics course assigned him that I recall.

    You want to know what economics really is? Never mind those guys you read. Read Varian.

  7. You are full o shit Ike, Varian? give me a break.

  8. Once again your comment is telling, in a bad way. Varian (Microeconomic Analysis) is THE textbook of graduate (micro)economics. You wanted reliable methodologies and rules that make accurate predictions? That’s what Varian IS. It is one stop shopping for all the theorems, proofs, and reasoning that economists rely on. (well, not the statistical stuff, different textbooks for that).

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