Hi everyone - welcome to the blog.
Click on the topic title to access the article I'm talking about.
In this piece from last year, Guy Sorman claims that the discipline of economics has come of age as a true science. To support this view, he puts forward 10 propositions that he claims economics has shown to be true beyond doubt. These are:
1) The market economy is the most efficient of all economic systems
2) Free trade helps economic development
3) Good institutions help development
4) The best measure of a good economy is its growth
5) Creative destruction is the engine of economic growth
6) Monetary stability is necessary for growth, and inflation is always harmful
7) Unemployment among unskilled workers is largely determined by how much labour costs
8) While a welfare state is necessary in some form, it isn't always effective
9) The creation of complex financial markets has brought about economic progress
10) Competition is usually desirable
What does anyone think about this? Do you think economics has shown these things to be true? How do these claims compare with the sorts of things that scientists claim to be true? Can economics be a "true" science? Let's try to apply some of the concepts we have been discussing over the last month.
Bring it on!
Wednesday, February 18, 2009
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4 comments:
Over my 3 year study of economics I've come to a tentative conclusion that economics is one big assumption; its not much more than a controlled lie built on largely abstract principles.
From what I know, i agree with all the above points. Yes all the points raised ring true and if the 'true scienciness' of economics was based on this then it is justified.
Economics does follow the scientific method also so thats a plus.
However, these 10 point do not sum up economics. Take the concept of Perfect Competition for instance- certain aspects of this are true however, it is largely theoretical; consumers do not have full knowledge of the market, product diversification DOES take place etc. This whole concept is built on elaborate 'ifs' and precision of predictions is low IN COMPARISON to the natural sciences.
The basics of demand and supply are more accurate(probably because they are more logical and practical)however, even then, the placement of so many measure (ceteris paribus) makes it so much less credible and less deserving of a scientific status.
yes, the natural sciences work with measures and conditions also but you do not perpetually walk into a wall of 'ceteris paribus' or other condition at every turn.
Now I think I'm just letting out frustrations but economics is too riddled with 'ifs'. Sorry all economics, you do get it right sometimes...
Good comments Antye504,
Don't you think "good institutions help development" is pretty much like saying "matter is made of atoms"? Doesn't it seem a bit obvious from a 21st century perspective?
Now I'm worried that we are giving economics a severe hammering! Who can stand up and defend one of the most popular subjects in our IB programme? Someone - please!!!
"Economics is not really a science in the true sense, but rather a set of sociological behavior matrices, based on mathematic theories applied to conditional scenarios"
The above is from a blog i was reading that seemed quite interesting; it throws new light on the matter.
the URL is:
http://wizbangblog.com/content/2008/05/06/economics-is-not-a-pure-science.php
Interesting quote. I'm not quite sure what "sociological behaviour matrices" might be, but maybe I need to research further.
How about the following quote from Hazel Henderson, writing in the Monde Diplomatique in 2005:
[Hard scientists] contend that the economics prize devalues all of the real Nobel prizes and has become an embarrassment. Many critics liken [economics's] tenets, such as the postulate of an invisible hand of markets, to religious beliefs... I have long maintained that [economics] is a profession, not a science, since so many of its principles are unlike the tested principles in physics that can, for example, take a spaceship to the moon... The temptation to mathematize concepts and faulty assumptions in economics obscures value-laden baises. It conceals public issues seen as too technical for the public... Thus economists gain influence with the wealthy and powerful institutions in society that usually employ them, and they are not held to the standards of accountability as other professions. If a doctor makes a patient sick, a malpractice suit can be filed; but economicst's bad advice can make whole countries sick, with impunity.
It would be good if someone could argue against this view...
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