Saturday, June 30, 2018

The Economics Novice

Weekend reading. There are only three entries. Easy read.

Ed Zimmer is an engineer and has only recently encountered economics.
But I had now picked up an interest in macroeconomics — and started seriously reading many of the economists' blogs and papers. But the more I read, the more disillusioned I became. Having no previous introduction to economics, I initially assumed economists were scientists (and that was reinforced by the math I was seeing). But as I read their blogs and papers and worked through many of their mathematical models, I came to realize they're not scientists at all — but philosophers. A model reflecting reality simply CANNOT be built from variables that cannot be precisely defined and accurately measured — so their models are essentially useless. They may give insights (for readers to test with their own logic), but any notion that they're offering "truths" is just simplistic.
And to compound that weakness, most economists' papers share the academic weakness of trying more to disprove other economists' work than offer viable solutions to real-world problems. So much of what is found in today's economics textbooks and blogs is simply false — the real-world truth often being the exact opposite of what is written. Economics is not that complicated — little more than the disiplined logic every human is capable of.

So that's how this site has become The Economic Novice. It gives me a platform to lay out my solutions (admittedly novice, but hopefully clear and logical) to societal problems resulting from technological change. I'm doing this as a webpage (rather than a blog) simply because I don't want arguments mucking up the presentation. I'll point to this site as applicable in others' Comments sections and that's where arguments will occur. If anyone wants to argue via email, you'll find me at
The Economics Novice


Ryan Harris said...

"they're not scientists at all — but philosophers"

I expect Tom would take issue with that. Tom is a philosopher and his thoughts are organized, rigorous, thorough and he quickly pierces through nonsense while the mainstream economists revel in the pig parlor of economics.

Tom Hickey said...

I expect Tom would take issue with that. Tom is a philosopher and his thoughts are organized, rigorous, thorough and he quickly pierces through nonsense while the mainstream economists revel in the pig parlor of economics.

Actually, I've already spoken to that. Most of economics is really philosophy instead of science, that is, based on introspection rather than beginning with data, processing data into information, and reasoning about it using models that are representational enough to be checked against information that is data-derived.

A big problem is that a lot of things of interest in economics cannot be subjected to scientific method and model generation as they can in the natural sciences. This may involve both logical and epistemological problems, measurement and specification issues, and possibly ontological problems involving radical uncertainty. But economics could become more scientific if economist upped their game. On the other hand, economics is a lot like the other social sciences and business/finance. All of them involve theory that is non-empirical owing to the suppositions and presuppositions, and in many areas data is sparse, or measurement imprecise. Moreover, there are issues with scope and scale — macro is not scaled up micro owing to the fallacy of composition, but conventional economists insist on strict microfoundations anyway.

These issue can be dealt with by being more carefully analytical and admitting limitations, and applying scientific method only where appropriate instead of using it as handwaving. Business schools figured this out long ago, for example. And the results come too quickly in finance to indulge in handwaving without being exposed. Interestingly, Goldman's chief economist, Jan Hatzius, employs Wynne Godley's monetary economics in his forecasting. He was named most accurate economist in 2009 and 2012.

There is good philosophy and bad philosophy. Most conventional economics is bad philosophy in that it is sophism, using rhetoric to hide in the shadows of reasoning. A lot of the use of math is like use of Latin in medieval theology.

At least Mises, Hayek, Rothbard, Rand and others were open about their philosophical underpinnings. Whether they wrote good or bad philosophy is arguable.

Marxists and Marxians also admit the philosophical basis pdf their thought. Whether this is good or bad philosophy depends on how dogmatic they are.

Matt Franko said...

They’re typical art majors... they are creating an illustration of what material people are doing... “art imitates life”...

GLH said...

Economics is propaganda initiated by the financial world in order to subjugate the rest of society. There is no science to it. Math adds to fakery. Economist are simply magicians creating an illusion in order to shuck the people.

Ed Zimmer said...
This comment has been removed by the author.
Noah Way said...

+++ GLH

Economics is ideology.