Economics is Dismal But Is It a Science?

On September 3^rd, Joseph Epstein’s article was published in the Wall Street Journal – Economics is Dismal, But Is It a science?*

Epstein’s worry about economics is common but misplaced because most of us do not know what a science is. Epstein is worried that an economist makes an analysis or a forecast based on something that might not always be right. He underscores the idea that because politicians abuse economics, then it must be the fault of the economics. It is more true that economics is fine. It is the politicians and the journalists who are the problem.

I am glad that Epstein didn’t write about shovels. Shovels are perfectly good tools to move dirt from point A to point B. But if Donald Trump and Nancy Pelosi were in one room and each held a shovel – he might worry that those dang shovels are just way too political. Hmmm.

This opening allows me to pontificate about economics and science. When I was in graduate school at Chapel Hill I was fortunate to take a course in what was called economic methodology. It would have been better named economic philosophy or the philosophy of science. You didn’t learn much micro or macro economics in that course but rather we learned what it means to seek and find truth. That sounds hoity toity but it is a way to describe what we do as people every day.

In the USA we drive on the right side of the road. If you drive on the left you soon learn a lesson about safe driving.  You might say we learn by doing. We find similar truths in many ways every day. Sometimes we find truth by merely thinking about things. You do not need to throw a dart in the air above your head to find out it might come down and hit you on the head. Instead, you could sit in a nice chair and think about the law of gravity. You learn that what goes up must come down. So, you might not throw a dart or a bowling ball right above your head. The Theory of Gravity helped you learn that lesson. Of course, repeated trials could teach you the same lesson but that  might be painful. 

So what is a science? A science is basically a way to discover what seems to be true. It usually has two parts to it. The first part is the theory. We use all sorts of theories to make predictions. The theory of electricity tells you not to stick your screwdriver into the electrical socket. The theory of macroeconomics tells you that if governments have too much debt this might raise interest rates and/or inflation.

The second part of a science is to test to see if your theory holds in the real world. Have your worst friend stick a screwdriver into the socket 100 times to see if the theory holds. Or watch to see how large government debts affect interest rates and inflation in various countries at various times.

Epstein worries that economics is not a science. But surely all one has to do is theorize a bit and then put the theories up to testing in the real world and you have a science. Of course some people make distinctions between hard and soft sciences. Chemistry might be a hard science because physical laws are pretty old and tested. Economics is a soft science largely because it is the new kid on the block and has a ways to go before it gets the predictive accuracy of chemistry. It also deals with human behavior which can be less predictable that electrical currents. 

But please Mr Epstein do not confuse this hard/soft idea with politics and manipulation. All one needs to do is think a moment about how hard scientists disagree about such things as a hurricane’s path, the health effects of meatless meat or vaping, the timing of global warming, dangers of biofoods, the origins of black holes, and so on. No science has it all down pat. There are disagreements within all of them. This means we have not yet learned everything about a phenomenon and need to keep trying. But it also gives room whenever there is a policy issue stemming from these disagreements, for politicians and Epstein’s buddies in journalism to turn science into a heated and colorful debate.

In that sense, economics is no different from any other science – hard or soft. No matter what kind of science, when we try to extrapolate what we think we know into the future, we can never be sure we will be accurate. When we are not accurate then we should learn from the mistakes and improve the theory. But Epstein doesn’t care about that – he’d rather blame economics instead of the stupidity of politicians and the press.

* https://www.wsj.com/articles/economics-is-dismal-but-is-it-science-11567551425?mod=searchresults&page=1&pos=1