Lars P. Syll's Blog
Chicago economics — where do we unload the garbage?
quoting Advice Unasked
My comment there:
Not sure it can ever be set right. Economics is conceived by most economists on the model of a hard science, which it is not at present, and there is no prospect for it ever becoming a hard science in the foreseeable future. It's one of those, well, nothing is impossible "in the long run" kind of things.
Business canned economics as useless long ago. The chief economist at Goldman, Jan Haztius, uses a Godely-based SFC model as a guide to projecting economic contingencies based on various inputs that are continually evolving based on a vast web of behavior, individual, institutional and cultural, that constantly adjusts through feedback.
From this standpoint, convention economics is finished as a practical discipline. It's mostly magical thinking based on a priori assumptions without relevance to the real world. At it's worst it is simply advocacy for interests under the guise of being "scientific." To paraphrase Ronald Coase, the data can be made to say anything if tortured enough. Mirowski has demonstrated this is in work, for instance.
The economics profession should just realize that if economic is "scientific" at all it is a social science and not a natural science. There are no "laws of nature" in the social world, which is complex, adaptive, and emergent — non-ergodic, in other words.. If mathematical models are to be at all applicable, they will have to take complexity and evolutionary theory into account, as social and biological scientists like David Sloan Wilson have pointed out.
Kenneth Boulding pointed the way to economists decades ago when he abandoned conventional economics and adopted a general systems theoretical approach instead. Contemporary economists should just follow him on that.
Moreover, economics is not totally positive and descriptive and many assume. It is fundamentally normative and prescriptive as well. This means that in addition to having a scientific side it also has a philosophical, because it deals with quality and ends as well as quantity and means.
I generally agree with what you have written, but I think you need to add one precision - this is the sub-field of business cycle macro that I am guessing that you have in mind. Yes, it is the most interesting part of economics, but I believe that this is now a shrinking part of academic economics. (This is based on comments by Simon Wren-Lewis, I do not follow what is happening in academia in other subfields of economics.) So it may be that the academic economic community is starting to move on in other directions; although I have no idea whether those other directions make any sense or not.
ReplyDeleteIt is the central bank reseearch staffs (who are very numerous) who are producing a lot of the mainstream macro. And central banks value their independence highly, so they would never admit that their decisions have an impact on income distributions.