by Summary:
Can economics ever be a hard science, like physics, chemistry, or biology, or is it a soft science, like psychology or sociology as it is about human behaviour, desires, wants and wishes? Should economists just stick to just pure economics as a pure science without politics, or desires, wishes, and concentrate instead on the perfect economy? What would the perfect economy look like, would it provide welfare to the poor, and would it see this welfare as an investment into a country's future because human resources are the most productive? Can economist factor this investment into their equations? What about a national health service which can help stop businessmen from going bust because of crippling health care cost so their their companies can stay in business helping the
Topics:
Mike Norman considers the following as important:
This could be interesting, too:
Can economics ever be a hard science, like physics, chemistry, or biology, or is it a soft science, like psychology or sociology as it is about human behaviour, desires, wants and wishes? Should economists just stick to just pure economics as a pure science without politics, or desires, wishes, and concentrate instead on the perfect economy? What would the perfect economy look like, would it provide welfare to the poor, and would it see this welfare as an investment into a country's future because human resources are the most productive? Can economist factor this investment into their equations? What about a national health service which can help stop businessmen from going bust because of crippling health care cost so their their companies can stay in business helping the
Topics:
Mike Norman considers the following as important:
This could be interesting, too:
Mike Norman writes Trade deficit
Mike Norman writes Bond market now pricing in one 25 bps rate cut by Fed in 2025
New Economics Foundation writes What are we getting wrong about tax
Sandwichman writes The more this contradiction develops…
Can economics ever be a hard science, like physics, chemistry, or biology, or is it a soft science, like psychology or sociology as it is about human behaviour, desires, wants and wishes? Should economists just stick to just pure economics as a pure science without politics, or desires, wishes, and concentrate instead on the perfect economy?
What would the perfect economy look like, would it provide welfare to the poor, and would it see this welfare as an investment into a country's future because human resources are the most productive? Can economist factor this investment into their equations? What about a national health service which can help stop businessmen from going bust because of crippling health care cost so their their companies can stay in business helping the economy to thrive? Have economists developed equations for this?
What about quality of life, like early retirement, or less time spent at work, which could make a person more productive and happy when at work? Where's the maths for this? Or what about having time to go back to college or university to learn a new skill or get a degree which could help people to start new businesses helping the economy? Is there any maths for any of this?
Or do we just have pure capitalism as science without emotion, where people are just workers in an highly productive system, like animals in a factory farm, where output is set for maximum profits? We know how to increase milk production by using the most cruelest methods, and how to produce the most chickens or eggs. But is there room in economics for a humane system of farming and can this be put into equations as well?
Is it best just to have pure economics as a science producing maximum profits, a pure scientific capitalism, or can economists design systems that improve quality of life and happiness for the general public? If such a system is soft science, like psychology or sociology, does it matter? KV
Alan Y Wang, an opinion.
Economists have faced a deluge of negative press in the past few years, ranging from criticisms over the failure to forecast the financial crisis, to the more recent disbelief over the granting of the Nobel Prize in Economics to three economists, two of whom hold views that can be said to be polar opposites. Indeed, the reputation of mainstream economics—specifically macroeconomics—is arguably at its worst since the formation of the field in the 1930s, with the advent of the Great Depression. This state of affairs prompted Raj Chetty, a professor of economics at Harvard, to author a defense of the field in ‘The New York Times,’ titled “Yes, Economics Is a Science.”
It seems as though economics is fighting for its right to stay in the exclusive group of fields deemed worthy enough to be called “science,” where subjects such as physics, chemistry, and molecular biology reside comfortably. Some instead opt to call economics, along with psychology and sociology, a “social science”—a vague term, often blurred with humanities, which is neither here nor there. Nevertheless, the underlying implication behind this battle is that to be a “science” is to be credible.
I don’t agree.
First and foremost, I don’t agree at all that economics is a science. Let me preface this by saying that I am concentrating in economics, and have the utmost respect for the field. Let me also clarify that when I say “economics” throughout this article, I primarily mean macroeconomics—microeconomics is an entirely different beast. While the two are intrinsically related, the methods of experimentation are so drastically different that the two can hardly be subject to the same criticisms.
Merriam-Webster’s definition of science is “a study of the natural world based on facts learned through experiments and observation.” What physics and chemistry and molecular biology have in common is that the building blocks of what they observe and experiment with don’t change. Such is the natural world. But what is the building block of economics? People. Economics does not study any unit smaller than a collection of people. And human behavior can never be absolutely predicted or explained—not if we wish to believe in free will, at any rate.
In fact, in a strict sense, economics does not even follow the scientific method. Engrained in the scientific method is the process of testing hypotheses with repeatable, falsifiable, and parameter-controlled experiments. Unfortunately for the field of economics, there are certain non-trivial barriers to experimentally tanking the Czechoslovakian economy over and over while controlling for interest rate levels. Oftentimes, the best economists can do is sit back and pore through the data given to them—data that is muddled by changing cultural standards, changing technological innovations, and changing time periods, among other factors.
All of this is not to say that I disapprove of economics, or think it illegitimate in any way—quite the opposite, actually. I believe that economics is a crucial field that directly impacts most everyone on this planet, perhaps more so than any other subject. The discovery of the Higgs-Boson made headline news around the world and has been heralded as one of the greatest triumphs of mankind’s collective intellect in history, but the Higgs-Boson has very little bearing, if any, on the daily lives of people. On the on the other hand, ill-timed economic austerity measures in Britain caused a very real, and very noticeable effect nearly immediately, setting the backdrop for the 2011 London riots.
This direct influence economics has on the individual lives of people stems from the fact that economics is, at its heart, a very person-centered and normative field of study. It is unique in the sense that economics fuses quantitative data and modeling with qualitative judgments; unlike in physics or chemistry, economics appends an implied “therefore…” statement to its conclusions. Economists’ findings that expanded insurance coverage increased lifespans and reduced costs lent implicit support to the Affordable Care Act—a law that will affect tens of millions of Americans.
Economics is not a science in the way that physics or chemistry is a science. Yet, this is not something to be lamented. Economics is not, and will never be, at the stage where models can precisely predict the day on which a financial crisis will start before it happens, but this is not due to the lack of legitimacy of the field; instead, it is due to the inherently unpredictable sphere of study in which economics operates. People are not atoms—and this is exactly why economics is immediately relevant.
What this means is that all of us—and the press in particular—should cease treating economics as though it were a science. We need to understand that economics is attempting to neatly model a very messy world.Do not expect clean answers.
Alan Y. Wang ’16, a Crimson editorial writer, is an economics concentrator in Kirkland House.