Sponsored Content




Intermarkets' Privacy Policy
Support


Donate to Ace of Spades HQ!



Recent Entries
Absent Friends
Bandersnatch 2024
GnuBreed 2024
Captain Hate 2023
moon_over_vermont 2023
westminsterdogshow 2023
Ann Wilson(Empire1) 2022
Dave In Texas 2022
Jesse in D.C. 2022
OregonMuse 2022
redc1c4 2021
Tami 2021
Chavez the Hugo 2020
Ibguy 2020
Rickl 2019
Joffen 2014
AoSHQ Writers Group
A site for members of the Horde to post their stories seeking beta readers, editing help, brainstorming, and story ideas. Also to share links to potential publishing outlets, writing help sites, and videos posting tips to get published. Contact OrangeEnt for info:
maildrop62 at proton dot me
Cutting The Cord And Email Security
Moron Meet-Ups

NoVaMoMe 2024: 06/08/2024
Arlington, VA
Details to follow


Texas MoMe 2024: 10/18/2024-10/19/2024 Corsicana,TX
Contact Ben Had for info





















« Top Headline Comments (9-5-13) | Main | Thursday Morning News Dump »
September 05, 2013

The 'Dismal Science' certainly is dismal, but is in no way a science

Philosophy professors Alex Rosenburg and Tyler Curtain ask, “What is economics good for?”. And the answer, as far as they can tell, is “Not much.” Richard Epstein, a noted libertarian law professor, dissents somewhat from this view.

Normally I would be in full-throated agreement with Professor Epstein, but I think he kind of misses the point in his essay (though his heart is certainly in the right place). Epstein's point, boiled down, is that even if economics is not predictive it still has value as a modeling theory and helps us to define our terms and establish boundaries when discussing economics. But here again economics falls down -- its practitioners cannot even agree on a basic model. Keynesian school? Austrian school? Chicago school? Marxist school? Anarcho-capitalist school? These models do not overlap much and often lead to wildly-different results. (Disclaimer: I am a partisan of the Austrian school of economics.)

Economics is not a science of any kind (though I guess you could wedge it in as a sub-specialty of human psychology). It is not predictive, and not at all rigorous either in theory or practice. Never mind the fancy mathematics or complex models: modern economics isn't far removed from astrology or the casting of bones or reading tea leaves.


Professor Epstein tries to retrieve the field of economics from the dustbin by drawing a line between macro economics and micro economics, and seems to assert that economic theory can be rigorous on the scale of the micro. I find this unpersuasive, because macro is simply a scaled-up micro -- the phenomenology is more complex, but contains the same basic elements. Chemistry is still chemistry, whether you're talking about a few molecules or a whole bucketful of goo; physics is still physics, whether inside an atom or at the scale of a whole galaxy.

Macro economics is simply micro economics writ large. If you can’t scale your theory up, then there’s something wrong with your theory. (Physics, it must be said, faces this exact problem with its inability to unify gravity with the other basic forces. There is something wrong, or at least incomplete, in the current model. It is nevertheless observationally accurate and highly predictive, and so remains valuable as a scientific theory.)

I've always thought that a useful conceptual model for economic systems would be cellular automata. It still wouldn't be predictive, but it would provide insight into how scarcity and environmental factors influence emergent systems (human behavior being an emergent phenomenon). You can't "fix" economics until you "fix' human behavior, and that's just never going to happen...so the next best thing is to understand chaotic, emergent behavior a lot better than we do now.

Perhaps what we need is more philosophy and less science in economics. The question of "how" in economics matters less to me than "why" (beyond the obvious existential reasons) -- human motivations and goals in economics are the real questions we're trying to answer, after all, not simply the tracing of every financial transaction and manufactured good.

But it's not as if the philosophers inspire confidence. Rosenburg and Curtain throw out this howler:

For the foreseeable future economic theory should be understood more on the model of music theory than Newtonian theory. The Fed chairman must, like a first violinist tuning the orchestra, have the rare ear to fine-tune complexity (probably a Keynesian ability to fine-tune at that).

Well, of course it would be a Keynesian symphony, wouldn't it? (You'll have to imagine the sarcasm-dripping tone of voice here.)

Clearly, I think that Rosenburg and Curtain’s assertion that economics can be understood like music theory to be absurd. Doubly so if you include the Keynesian fallacy they introduce; Keynesian music theory would simply posit that more tones equals better music, regardless of their placement in the staff or the instrument playing them. And it should be up to the conductor and not the composer to decide when and where to introduce all those new tones. The end result would not be particularly musical, but then in Keynesian music as in Keynesian economics the benefit of the audience is not really the point.

The more basic objection is this: if you screw up a piece of music, the only harm you have done is to the ears of your audience. If you screw up the economy, you can destroy your entire society. The stakes are just a bit higher with economics than they are with a musical performance. Once again we see the ancient leftist desire for control, the conceit that they can tinker with some fantastically-complex (and badly-understood) phenomena without any negative consequences.

The best approach to any potentially-dangerous phenomena you don’t understand is to use extreme caution, and limit your interference as much as possible. Hippocrates understood this many centuries ago when he founded the science of medicine: First, do no harm.

We have discovered, through many centuries of trail and error, that market capitalism performs the best of any economic model we’ve tried so far. That doesn’t mean there aren’t better ones, just that no one has discovered any yet. The wonderful thing about market capitalism is that it runs pretty well with very limited intervention. It doesn’t require a great deal of regulation or fine-tuning -- in fact, regulation and fine-tuning tend to degrade the performance of a market-capitalist economy rather than improve it.

There may come a time when economics becomes a robust, predictive science, but I rather doubt it. As I said before, economics is really the study of human behavior, and creatures as irrational and contrary as we are resist definitive analysis. I think we’ll have to make peace with the fact that all we can do in terms of “managing” the economy is to “manage” it is little as we possibly can.

digg this
posted by Monty at 08:15 AM

| Access Comments




Recent Comments
Nova Local: "69 "Local news here quietly discussed that most/al ..."

redridinghood: "Wishing all a blessed Good Friday. ..."

LinusVanPelt : "No. Burr was a POS, certainly. But it was a duel, ..."

Rufus T. Firefly: ">>>Local news here quietly discussed that most/all ..."

Village Idiot's Apprentice: ""Local news here quietly discussed that most/all w ..."

Ben Had: "..., boggles the mind, it does. May Spring bring ..."

Nova Local: " And the names of the two deceased workers who's ..."

... : "We MUST defend Ukraine. And we MUST stop Israel ..."

Dem Propagandists: "Republicans made Obamacare expensive and unafforda ..."

Ben Had: "JT, Good morning. Hope all is well with you ..."

JT: "Hiya BenHad ! ..."

m: "Where's our SFGoth? ..."

Recent Entries
Search


Polls! Polls! Polls!
Frequently Asked Questions
The (Almost) Complete Paul Anka Integrity Kick
Top Top Tens
Greatest Hitjobs

The Ace of Spades HQ Sex-for-Money Skankathon
A D&D Guide to the Democratic Candidates
Margaret Cho: Just Not Funny
More Margaret Cho Abuse
Margaret Cho: Still Not Funny
Iraqi Prisoner Claims He Was Raped... By Woman
Wonkette Announces "Morning Zoo" Format
John Kerry's "Plan" Causes Surrender of Moqtada al-Sadr's Militia
World Muslim Leaders Apologize for Nick Berg's Beheading
Michael Moore Goes on Lunchtime Manhattan Death-Spree
Milestone: Oliver Willis Posts 400th "Fake News Article" Referencing Britney Spears
Liberal Economists Rue a "New Decade of Greed"
Artificial Insouciance: Maureen Dowd's Word Processor Revolts Against Her Numbing Imbecility
Intelligence Officials Eye Blogs for Tips
They Done Found Us Out, Cletus: Intrepid Internet Detective Figures Out Our Master Plan
Shock: Josh Marshall Almost Mentions Sarin Discovery in Iraq
Leather-Clad Biker Freaks Terrorize Australian Town
When Clinton Was President, Torture Was Cool
What Wonkette Means When She Explains What Tina Brown Means
Wonkette's Stand-Up Act
Wankette HQ Gay-Rumors Du Jour
Here's What's Bugging Me: Goose and Slider
My Own Micah Wright Style Confession of Dishonesty
Outraged "Conservatives" React to the FMA
An On-Line Impression of Dennis Miller Having Sex with a Kodiak Bear
The Story the Rightwing Media Refuses to Report!
Our Lunch with David "Glengarry Glen Ross" Mamet
The House of Love: Paul Krugman
A Michael Moore Mystery (TM)
The Dowd-O-Matic!
Liberal Consistency and Other Myths
Kepler's Laws of Liberal Media Bias
John Kerry-- The Splunge! Candidate
"Divisive" Politics & "Attacks on Patriotism" (very long)
The Donkey ("The Raven" parody)
Powered by
Movable Type 2.64