Jason Smith — Noah is stealing my material

More on econ as science.

Noah says to prove the assumptions are wrong. Lars says show that they are correct. Who has the better case?

The issue is how well a theoretical model works. Assumptions are always simplifications for economy and tractability of explanation. 

There is nothing inherently wrong about assumptions not being precise. They only need to be precise enough to yield results within an acceptable degree of tolerance.

The proof of the pudding is though hypothesis testing more than verifying assumptions, although if assumptions are not reasonably correct, then the model is questionable as an explanation that is generalizable. 

It is possible that a dodgy model can sometime yield positive results (pace Friedman's instrumentalism), as broken clock is correct twice a day. The test of theory is how well the model performs as an explanation of how things stand over time, that is, taking change into account. Theoretical models that don't reliably predict as not generalizable explanations. They are only generalizable in terms of restrictive assumptions that may or not hold in specific cases. That is to say they are models of special cases. 

I would say that scientific method is applicable in econ as it is in other social sciences and also in philosophy, since even speculation must take established truths into account. The question really is whether econ is a natural science like physics, a hybrid science positioned between natural science and life and social sciences, a narrative explanation of occurrences like history, or speculation based on principles grounded in intuition, like speculative philosophy. 

I would say that econ as practiced is some of each, and all approaches make their own contributions to the field. Defenders of econ as science can cite examples to make their case, and opponents can do likewise.

Jason Smith has written on this previously, to which I have linked here at MNE.

Is human agency Noah's big unchallenged assumption?

Falsifiabilité, simplicité, succès ... ou la mort

On the use of hypotheses: or, what do you get when you assume non-ergodicity?

Prescott and Lucas aren't Romer's problem

What does the AD-AS model mean?

There are more posts there, but these are representative.

The title,  Is human agency Noah's big unchallenged assumption?,  hits the nail on the head. The social sciences are about human agency, and so are behavioral psychology and motivational psychology and some other branches of psychology. So is theory of history. And in philosophy, so are theory of man, ethics, theory of action, and social and political philosophy.

Economics is based on a theory of man and theory of action. The theory of man and of human action are not subjects of study in the field of economics, or at least not exclusively so (pace Ludwig von Mises).

There is no agreed upon general theory of man or of human action in either the sciences or philosophy. Why? Foundational disagreement is often due to lack of criteria that are agreed upon, or failure of agreed upon criteria to determine a definitive result. It is also possible that data or method are insufficient. 

As a result, general agreement is usually limited to quite specific cases under particular conditions that are not generalizable, that is, special cases. As a result, the case method is generally used in business schools, for instance, that than theoretical economics.

Information Transfer Economics
Noah is stealing my material
Jason Smith