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Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsWhat is economics good for?
http://opinionator.blogs.nytimes.com/2013/08/24/what-is-economics-good-for/?_r=0The fact that the discipline of economics hasnt helped us improve our predictive abilities suggests it is still far from being a science, and may never be. Still, the misperceptions persist. A student who graduates with a degree in economics leaves college with a bachelor of science, but possesses nothing so firm as the student of the real world processes of chemistry or even agriculture.
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Its easy to understand why economics might be mistaken for science. It uses quantitative expression in mathematics and the succinct statement of its theories in axioms and derived theorems, so economics looks a lot like the models of science we are familiar with from physics. Its approach to economic outcomes determined from the choices of a large number of atomic individuals recalls the way atomic theory explains chemical reactions. Economics employs partial differential equations like those in a Black-Scholes account of derivatives markets, equations that look remarkably like ones familiar from physics. The trouble with economics is that it lacks the most important of sciences characteristics a record of improvement in predictive range and accuracy.
The irony is that for a long time economists announced a semiofficial allegiance to Karl Poppers demand for falsifiability as the litmus test for science, and adopted Milton Friedmans thesis that the only thing that mattered in science was predictive power. Mr. Friedman was reacting to a criticism made by Marxist economists and historical economists that mathematical economics was useless because it made so many idealized assumptions about economic processes: perfect rationality, infinite divisibility of commodities, constant returns to scale, complete information, no price setting.
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Moreover, many economists dont seem troubled when they make predictions that go wrong. Readers of Paul Krugman and other like-minded commentators are familiar with their repeated complaints about the refusal of economists to revise their theories in the face of recalcitrant facts. Philosophers of science are puzzled by the same question. What is economics up to if it isnt interested enough in predictive success to adjust its theories the way a science does when its predictions go wrong?
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Its easy to understand why economics might be mistaken for science. It uses quantitative expression in mathematics and the succinct statement of its theories in axioms and derived theorems, so economics looks a lot like the models of science we are familiar with from physics. Its approach to economic outcomes determined from the choices of a large number of atomic individuals recalls the way atomic theory explains chemical reactions. Economics employs partial differential equations like those in a Black-Scholes account of derivatives markets, equations that look remarkably like ones familiar from physics. The trouble with economics is that it lacks the most important of sciences characteristics a record of improvement in predictive range and accuracy.
The irony is that for a long time economists announced a semiofficial allegiance to Karl Poppers demand for falsifiability as the litmus test for science, and adopted Milton Friedmans thesis that the only thing that mattered in science was predictive power. Mr. Friedman was reacting to a criticism made by Marxist economists and historical economists that mathematical economics was useless because it made so many idealized assumptions about economic processes: perfect rationality, infinite divisibility of commodities, constant returns to scale, complete information, no price setting.
...
Moreover, many economists dont seem troubled when they make predictions that go wrong. Readers of Paul Krugman and other like-minded commentators are familiar with their repeated complaints about the refusal of economists to revise their theories in the face of recalcitrant facts. Philosophers of science are puzzled by the same question. What is economics up to if it isnt interested enough in predictive success to adjust its theories the way a science does when its predictions go wrong?
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What is economics good for? (Original Post)
Recursion
Aug 2013
OP
Fumesucker
(45,851 posts)1. The majority of scientific endeavors do not have the profound effect on the 1% that economics does
Most economists appear to be in the business of telling very rich people what they wish to hear rather than searching for some elusive truth.
Far too many vested interests are threatened to allow for truly skeptical inquiry into economics.