

Economics Is Not A Natural Science - csbartus
http://edge.org/3rd_culture/rushkoff09/rushkoff09_index.html

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jswinghammer
Whenever I see arguments like this it makes me wonder if the author just
doesn't like the laws of economics as we understand them and then proceeds to
suggest that we should disregard them because they're inconvenient. For now
there is a lot of scarcity and until that changes we're bound to our fate that
we have to work hard to build a future for ourselves, our families, and our
community. We've tried printing a lot of money to build prosperity to give us
a short cut and now we're paying the price for that. We've also tried
centralized planning on a massive scale (e.g. in the Soviet Union) and that
didn't end well either. It seems like we need to get over the fact that we all
need to work hard.

The notion that the market isn't reflecting our values is silly it seems to be
the only reflection of our values. The title of this article is correct in
that economics is not a science on the level of physics or chemistry but it's
not exactly something you can just disregard entirely either.

~~~
presidentender
While economics can't be disregarded, modern Keynsian economics bears as much
resemblance to science as it does to religion. Its "Laws" are not laws in the
sense that the Laws of Thermodynamics are laws, and the scientific method is
not employed in developing them, because the scientific method is ill-suited
to the subject.

The issue here is one of vocabulary, but it's an important issue nonetheless.
Perhaps if we stop treating calling non-sciences "sciences," the credibility
of real science will be improved, and the formerly unassailable opinions of
economists will come under more scrutiny. I think that would be a good thing.

~~~
CWuestefeld
That's true, but Keynesians are just one school of thought. Austrians try to
derive their understanding from pure logic; this isn't such a religion, but
still isn't directly susceptible to the scientific method.

On the other hand, the Chicago school is certainly empirical, and to this
extent, theories can (frequently) be investigated for proof or disproof.

~~~
presidentender
I almost agree with you, but assert that "frequently" isn't good enough; the
Chicago school's attempt to rely on empirical evidence is necessarily
incomplete, just due to the sheer volume of data.

That said, I tend to subscribe to the Austrian school, which I believe we can
agree does not qualify as a science.

~~~
CWuestefeld
Actually, I agree with your disagreement :)

It's simply not possible for Chicagoans (is that the word?) to test all their
ideas. There are plenty of theories for which no real-world data exists, so
they must remain as speculation for now.

And I'm extremely sympathetic to the Austrian ideas. I love Mises' _Human
Action_ (at least the parts of it I've been able to get through so far). At
the same time, I must acknowledge that the deeper one goes into such
reasoning, the greater the chance for failing to notice that you made an
assumption, one that may be wrong. So there's a necessity to get back to a
touchstone of the real world occasionally.

It may not seem so, but it's easy for pure logic to go astray. Mathematicians
pride themselves on logical rigor, but the fact is that many modern-day
mathematical proofs are so complex that no one is _really_ sure that they're
correct.

And I'm dismayed that the Keynesians have been crowing about multipliers of
late, when all of our experience during the 70s has shown us fundamental flaws
in the Keynesian philosophy (yes, you can easily have high inflation _and_
high employment at the same time!).

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ccc3
This struck me as a ranting collection of unsupported claims.

Unfortunately, scarcity is, and always will be, a reality. And that is a fact
hard-wired to natural science. Sure it may be possible to create an economic
system that delivers "free software to everybody," but it could never go much
further than that. We still need to live in houses and wear clothes and even
build the computers that will be used to write all this software. All of these
goods are made from scarce natural resources and no amount of tinkering with
the rules of the economy will change that fact.

~~~
Zaak
> Unfortunately, scarcity is, and always will be, a reality.

It's true that scarcity is a reality. It is far from certain that scarcity
always will be a reality. Unless of course you define scarcity to mean that
not everyone in the solar system can have exclusive use of more than 50% of
the mass of the sun.

~~~
billswift
Scarcity will indeed always be a reality. Physical resources will always be
limited compared to what we could use them for, so they will always be scarce.
Time to do things will always be limited compared to what we may want to do,
so we will always have to prioritize and take into account opportunity costs,
time will always be scarce. And similarly for other "resources" you may
consider (energy, attention, etc).

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hyperbovine
"...with a set of underlying assumptions that have little to do with anything
resembling genetics, neurology, evolution, or natural systems."

There are some fascinating studies that have come out in the past few years
demonstrating that many of our economic intuitions and biases as humans
actually have an evolutionary basis--basically, that the same behavior can be
reliably elicited from chimps, birds, etc. Another thing that comes to mind is
Tversky & Kanheman's work on prospect theory, which showed that humans are
irrational in very predictable ways. Anyways, my point is that the essay's
main argument, which is that the laws of economics are not universal or
immutable, is only true in a limited sense. There is no universal truth about
economics, but as long as it's us humans who are doing the creating and
spending of wealth, we're going to continue to act according to some very
deep-seated principles. It's these patterns of behavior that have resulted in
markets, selfishness, and all the rest. So things are going to continue to
look very much the same. It's sort of like the way a few axioms can give rise
to an entire geometry.

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1gor
Economics is not a science at all, in its current mainstream form.

It is based on a set of hopelessly outdated assumptions about the world, and
its current toolset is easier to throw away than to modernize. Especially
since the economic academic establishment is focused more on self-defence and
self-support than on the pursuit of knowledge.

Here is the list of things that are central to modern mainstream economics but
are proven wrong.

\- the concept of equilibrium

\- efficient market hypothesis

\- modern portfolio theory

None of core economic concepts is supported by experimental evidence, so it is
as much a science, as the "scientific Marxism" was.

~~~
miloshh
Whether or not these concepts are really proven wrong, I would claim they're
not that centeal to economics. The most central idea of economics is that
there aren't enough goods for everybody to have what they want. Therefore, you
have to distribute the goods somehow.

Some (more or less) fair ways to do that would be to give the goods to those
that pay more, or work harder, or wait longer. There are other ways -
stealing, cheating, haveing influential friends.

In any case, the scarcity simply won't go away by declaring economics
unscientific.

~~~
billswift
Yes, scarcity, opportunity costs, and tradeoffs are the real core economic
principles.

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DanielBMarkham
So I see the title. I glance at the picture of the guy, and immediately my eye
drops down to his bio

 _DOUGLAS RUSHKOFF is a media analyst; documentary filmmaker, and author. His
latest book is Life Inc.: How the World Became a Corporation and How to Take
It Back._

How the world became a corporation? WTF?

They lost me as a reader right there.

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steve_mobs
Economics, business, finance is not a natural science. there is a youtube
video where george soros explains why that is the case.

