the two headed economics coin
In all sciences you have two distinct sides. You have on the one hand a theory about reality that makes assumptions, contains equations, theorems and laws, etc. On the other hand you have reality, which you then look at to test the predictions of your theories. It seems to me that there is a major flaw in economics which plays on this distinction. Now we all know economics has its problems, but what I want to point out here is an interesting strategy that economists employ in their defense. Broadly put, when you point out a flaw on one side of the coin, they just show you the other side and expect you to be satisfied.
Say you point out that the assumptions made by economics don't hold in reality; perfect competition, perfect knowledge, perfect this, perfect that. This doesn't much phase the economist as they boast that despite the bad assumptions it works pretty well in reality.
But imagine you had instead pointed out that the predictions made by economics don't line up very well with what takes place in reality. Again the economists is not phased as they begin to say that this is because reality falls short of the economic theory, we should aspire to be more like economically rational agents, and we should change our market structure to be more free, etc.
You complain about theory, flip, they show you reality. You complain about reality, flip, they show you theory. Flip, flip, flip.
6 comments:
Hence why we need psychologists!
e.g.: http://en.wikipedia.org/wiki/Kahneman http://en.wikipedia.org/wiki/Tversky
sounds like you don't know much about economics, you could replace the word economics with Christianity in your post and if that was your view on Christianity then how simplistic can you get
http://jim.com/econ/contents.html
(what i mean is, you're wording it in a way which would be similar to viewing all Christians as people who think Christianity is black and white with no room for further refining or need for Bible studies etc)
I am not quite sure I follow your critique. Are you suggesting that if I had been talking about Christianity instead of economics then I would have been wrong, and thus it follows that I am also wrong about economics? If so then I think it might be your understanding of economics that should be questioned; economics is a social science but Christianity is a religion, disanalogy much?
Assuming that you are instead making the more reasonable point that within the field of economics there is a lot of diversity of views regarding these things, i.e. economists aren’t all neo-liberal-pro-free-market-loonies, then I have to concede that you’re right.
However, that does not diminish the point that this is a rhetorical move made by a large group of economists when defending their discipline against criticism. All I have really shown here is that as a rhetorical device it is pretty weak once unmasked.
((Also my understanding of economics, while not impressive, isn’t underwhelming either. Between having an economics teacher for a father, studying economics a little, and studying philosophy of social science way to much, I think I’ve garnered a few insights to the whole business.))
well i don't quite get this paragraph:
But imagine you had instead pointed out that the predictions made by economics don't line up very well with what takes place in reality. Again the economists is not phased as they begin to say that this is because reality falls short of the economic theory, we should aspire to be more like economically rational agents, and we should change our market structure to be more free, etc.
i think that is an argument based on ignorance of economics, rather than economics being wrong. anyone who's studied economics (such as your dad) beyond high school knows that perfect markets etc. is the foundation of the theory, but not the theory itself, as at university you learn that economic theory is refined by detail and the more factors you take into account the more accurate the theories are
so for example a creationist who argues evolution is bullshit because "it's just a theory" and automatically discards everything ignores the fact that it's quite substantial theory
I'm going to admit that I don't know anything about economics, and comment anyway. When you come to a scientist and say "I think your theory has a problem", a scientist should not say "oh, yeah, well its not perfect, but hey its good enough" (and they should especially not say "its not perfect, but the problem is with reality, not with theory"). Instead a scientist should seek to identify what that problem indicates, and how the theory could prove. It seems Era is right that there is something funny going on here.
I'm tempted to say that the field of economics is a confusing mixture of scientific/descriptive aspects and normative (telling you what to do) aspects. Maybe some of this flip floping is due to this confusion (eg the telling us to be more like economically rational agents). From the few classes of economics I've been to, I would like their to be much more care taken when stating what one ought and ought not to do. For example "one ought to do x on the basis of the caculation, if and only iff one wants to maximize profits regardless of other consequences". Maybe this is intended to be assumed. Yet it is still not clear to me that economics is clear on where description stops and normativity begins.
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