Is Economics Science?

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In a response to a link to one of my economics posts over on the book of faces someone questioned whether economics was a science at all.  The question is a valid one because when you look at folk as diametrically opposed on pretty much every point as Paul Krugman and Milton Friedman, both Nobel Prize winning economists, well, you have to wonder if “there’s any ‘there’ there.”

The thing is, there is a science of economics. What makes something “science” rather than something else is falsifiability (something that, if seen, would indicate that a concept is wrong) and the related concept of making testable predictions.

Consider, for instance, from Thomas Sowell’s memoirs, when he was working for, I think it was the Department of Labor.  As I remember it (I have the memoirs on audio book–great for listening while in the car but not so good for looking up particular points to refresh ones memory) there was a question about the cause of increased unemployment in Puerto Rico. Two popular theories were proposed.  One involved minimum wage rates.  Another involved seasonal storms. Sowell figured that while either theory, if correct, might both lead to the specific problem under investigation (unemployment) there should be something, some result, different between one being the cause vs. the other. After much thought he figured one out (if I’m being vague, again, it’s because it’s been a while since I listened to the audiobook), something related to agricultural production. If theory A were correct then they’d also see this change in the particular agricultural aspect. If theory B were correct, then they’d see a different result.

Of course, there’s always the possibility of “C” something they hadn’t thought of yet, being the “real” cause.  But then, that’s true in other sciences as well.  After all, for along time there were two competing theories regarding the

That, right there, is science in all its purity. You formulate a hypothesis (as Feynman put it “you guess”), you determine what the results would be if your hypothesis is correct, and then you go look.

The problem was in that last step, the DoL didn’t have access to the relevant data. That would be the USDA. To get the information he would have to send a request up the chain in the DoL, at an appropriate level it would be passed over to USDA and then back down the chain to the particular branch which had the relevant data. So he sent in the request. As of the writing of the memoirs and long after Sowell had left the DoL, according to Sowell, the request still had not completed its journey.

So, yes, there is a science of economics. The problem is that the subject matter is complex enough that people will often simply skip the whole “testable predictions” thing.  Instead they’ll look through a vast sea of information, find something, anything that can be presented as supporting their particular view (and quietly sweeping things that refute that view under the rug), and go “Ah, hah!”, something Thomas Sowell called, suitably enough “‘Ah, hah!’ statistics.”

And while the “social sciences” are particularly prone to this phenomenon, the physical sciences are not immune.  People are all too often prone to letting their politics dictate their science.  Whether it’s the “Union of Concerned Scientists” and their “doomsday clock” which is nothing more than a measure of how much they dislike the current administration and its policies or the “Climate Change” peole who, instead of making testable predictions and abiding by the results simply point at any bad thing happening (and there’s always something bad happening somewhere in the world) and saying “See?  Human caused climate change.”

So, while there is a science of economics there are also a whole bunch of people out there attempting to hide that fact and use the cachet of science to justify their own “philosophy” which can be summed up as: “If A is false, I will be sad. Therefore, A is true.”

6 thoughts on “Is Economics Science?”

  1. I read the below and my mind went off on a tangent.
    ” (I have the memoirs on audio book–great for listening while in the car but not so good for looking up particular points to refresh ones memory)”
    I wonder if speech recognition software for writers could be able to listen to the audiobook, and turn it into a searchable text format.

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  2. I hate with a capital H listening to books. My mind constantly wanders and then I find that I have missed pages. I have, of course, no idea how many pages I have missed, so I have to skip back in ten second increments until I hear something I recognize. Now I am not sure what led up to that, so I have to try to figure out where I am in the story or argument. Tried it several times, then ditched it for podcasts and music when on the move.

    Good article once again. Best explanation for the difference between science and not is the falsifiability doctrine. The science is NEVER done.

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  3. Economics, beyond the bare basics, is not science. It is unequal parts psychology, philosophy, politics, and the mathematical equivalent of creative writing.

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    1. [sigh]. Acutally, there’s quite a bit of science in economics. The problem is that a lot of people attempt to use the language of economics to present…other things. The snake oil salesman and the medical researcher may use the same language but they’re not doing the same thing. The astrologer and the astronomer may both talk about stars and planets but, again, not doing the same thing.

      Economics doesn’t tell you how to run a major multinational business. It can, however, tell you why someone who does know how to do that is worth paying millions–or why it’s worth millions to make a bad one go away with minimum fuss.

      When someone claims that some policy will have a particular result–save jobs, improve incomes, stimulate trade, what have you–they are making a testable prediction. That’s science. Implementing the policy (or looking at where someone else has implemented the policy) counts as an experiment and, again, is science. Failing to circle back and look to see whether the results matched the predictions? That’s where things usually break down but that’s a fault not of economics but of economists. It does not invalidate the science any more than “N Rays”, “Polywater”, “cold fusion” or any of that like invalidates the physical sciences.

      Mind you, a lot of people dismiss the things that come out of the science aspect as “just common sense” or similar phrasing. Yet what they don’t get is that people making diametrically opposite statements also call them “common sense” (or similar phrasing).

      And even if you dismiss things as “bare basics” those basics can have profound and far reaching consequences, some of which I have gone into a bit in other posts.

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  4. Yes, Economics is a science. Look at price theory: raise the price of a good, and people will buy less of it. They will either do without or find substitutes. Yet many people, even economists, will ignore that and advocate for a minimum wage – which will not help the working poor, it will just turn them into unemployed. Those who point that out will be accused of hating the poor. This is part of the ““If A is false, I will be sad. Therefore, A is true.””.
    There are also philosophies and belief systems that have theories in opposition to economics. TheWriterinBlack has written on this a lot. The point is that many will deny or obfuscate economic principles to advance their beliefs and/or their agendas, and this leads to fog and confusion around what economics actually has as principles.
    Well, that and the fact that economics deals with people, in all their activities and needs, which makes the term ‘complex’ rather weak.

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    1. There’s also a lot of chaos and uncertainty in economics- as is with all human interactions. For example, while technically speaking raising the price of goods means people will buy less of them, you have a lot of examples where the converse comes into play. There is a market for conspicuous consumption and upscale goods, and too low of a price can cause consumers to question the quality (or legality) of the item being sold.

      It does turn into a cargo cult pseudoscience when people begin to think that they have somehow cracked the code of how people work, and know the infallible rules dictating the arrow of history.

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