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So, at what point does Economics become a Pseudoscience?
Posted: 24 October 2008 04:42 AM   [ Ignore ]   [ # 181 ]
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Occam - 23 October 2008 04:28 PM

I believe we would be justified in thinking that Alan Greenspan is a competent economist, since he was chosen as Chairman of the Fed by two presidents.  However, in an interview today, he admitted that he was quite wrong across the board in his assessment of the effects of deregulation on the financial market.  If anyone could use the “scientific principles” of economics to make general predictions, it would seem to be Greenspan.  Since he was unable to get even close, it can’t help but lead one to question the description of economics as a science.

Occam

Very good Occam!  One wonders what might have happened had the Manhattan Project folks been so far off with their models.

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Posted: 24 October 2008 05:23 AM   [ Ignore ]   [ # 182 ]
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wesmjohnson - 24 October 2008 04:21 AM

If I ruffled your feathers I apologize.  I was asking questions about you using the only information you provided - your screen name.  By no means did I intend to offend and my questions were not intended as an attack.  I did not accuse you of being anything, I was just asking.  Your post are of interest to me although I have yet to understand your position/argument about science.  Again, I am asking for your articulation of your wider definition of science. cool smile

My feathers were only ruffled only in response to the more personal jabs.  I owe you an apology for the emotive manner in which I took part in escalating things to retort.  It doesn’t become me.  And at any rate, I do respect that you know a great deal about physical science and I am not interested in belittling it.  I think that our only real disagreement, in this thread, is definitional.

I have said that I think that there are differences between the physical and the social sciences.  And that there are also similarities.  I am not taking a hard line position either way.  There is something (A) which examines physical data… maybe rocks or trees or stars, and makes concise reasoned conclusions about that data.  There is also something (B) which examines broader sorts of information (such as the economy, history, sociology, human behavior, etc.) and makes reasoned conclusions about that data.  Perhaps these come across as a great deal less concise.

How we choose to incorporate those differences and similarities in the terminology that we use (for example, what we call “science” and what we call something else) is a semantic distinction.  Should we give group A and group B entirely separate terms such as “science” to describe the one and something else to describe the other?  Or should we use the terms “physical science” and “social science” to distinguish the differences and the term “science” to refer to the shared qualities?

On one level, I don’t suppose that it matters what we call these things.  A rose by any other name is still a rose.  But then there are more nuanced side implications of the terms we choose.  If we are to say that economics is not a science then we are not just saying that it is something that is different from what physical scientists do.  We are suggesting that it can not make meaningful statements.  Take another look at the title of this thread.

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Posted: 24 October 2008 07:22 AM   [ Ignore ]   [ # 183 ]
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On one level, I don’t suppose that it matters what we call these things.  A rose by any other name is still a rose.  But then there are more nuanced side implications of the terms we choose.  If we are to say that economics is not a science then we are not just saying that it is something that is different from what physical scientists do.  We are suggesting that it can not make meaningful statements.  Take another look at the title of this thread

Thank you for your response.  Yes, what we call things is important.  If I say economics is not a science I am certainly not saying it cannot make meaningful statements.  Art (music, sculpture, 2 and 3 dimensional representations, dance, etc) makes meaningful statetments and is not called science.  Making meaningful statements is necessary but not sufficient condition for a science.  I am saying that economics is a different kind of thing today and takes on the trappings of science (similarities).  It may be a fledling science or a proto science, I don’t know.  What we call it matters because public perception creats its own reality.  If the public understands Economics as a science, and its results are the recent and ongoing disaster, then all science is painted with the same brush.  cool smile  So I suppose my objection to Economics as a science are political.  I find and am likely oversensitive to the disrespect scientist received in America today. 

Looking at the title of this thread as you suggest - “So, at what point does Economics become a Pseudoscience?” I have posted a response several times - IMO Economics is not a pseudoscience.  cool smile

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Posted: 24 October 2008 08:07 AM   [ Ignore ]   [ # 184 ]
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I agree to disagree with you

Fair enough!  grin

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Posted: 28 January 2009 08:05 PM   [ Ignore ]   [ # 185 ]
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wesmjohnson - 24 October 2008 04:42 AM
Occam - 23 October 2008 04:28 PM

I believe we would be justified in thinking that Alan Greenspan is a competent economist, since he was chosen as Chairman of the Fed by two presidents.  However, in an interview today, he admitted that he was quite wrong across the board in his assessment of the effects of deregulation on the financial market.  If anyone could use the “scientific principles” of economics to make general predictions, it would seem to be Greenspan.  Since he was unable to get even close, it can’t help but lead one to question the description of economics as a science.

Occam

Very good Occam!  One wonders what might have happened had the Manhattan Project folks been so far off with their models.

Hi All,

Well, a lot has happened in the year since I started this tread…..

One thing that I’ve been looking for but have yet to find is the James Randi of Economics.  I think its interesting that we have skeptics in all sorts of other areas, but it seems like we could really use a good skeptical movement in the field of economics.  Anyone know anyone doing this today?

-baloo

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Posted: 28 January 2009 10:32 PM   [ Ignore ]   [ # 186 ]
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Most economists are their own skeptics. Don’t forget the old joke about economists having three hands. I read a lot of economists recognizing multiple interpretations of any event. Usually a field is ripe for satire when it takes itself too seriously, but my read is that economists—as a group—have been among the least dogmatic of the academic disciplines. Yes, there are certainly some strongly opinionated economists; Milton Friedman springs to mind. But even he larded his writings with acknowledgements of uncertainties.

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Posted: 29 January 2009 12:11 AM   [ Ignore ]   [ # 187 ]
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Chris Crawford - 28 January 2009 10:32 PM

Most economists are their own skeptics. Don’t forget the old joke about economists having three hands. I read a lot of economists recognizing multiple interpretations of any event. Usually a field is ripe for satire when it takes itself too seriously, but my read is that economists—as a group—have been among the least dogmatic of the academic disciplines. Yes, there are certainly some strongly opinionated economists; Milton Friedman springs to mind. But even he larded his writings with acknowledgements of uncertainties.

Hi Chris,

Sure, line all the economists in the world end to end, and you still wont reach a conclusion…..

I think that if you sit down with an economist and ask them about the uncertainty in economics, they will acknowledge it, that said, they do seem more than willing to give advice without really knowing the risks involved.  And even when they do explain the risks, its often in a language that is hard for many people to understand.

Maybe its that the public puts too much faith in what they have to say.  Maybe its that we ask the wrong questions.  It seems to me that if you ask someone ‘how to win the lottery?’ and they tell you that ‘you should buy lots of lottery tickets’, and state that there is still a high degree of uncertainity in the lottery even when you buy lots of tickets, that that doesn’t quite go far enough.

It seems like there is still a role for someone to ask economists to make predictions, and the state the odds, and then measure the accuracy stated, and then go back to the public and explain that when the odds are higher than the payout then its not a good bet.  Going back over the last year, it really seems that the public has repeatedly bet on the ‘best’ economic advice, and repeatedly the bets have not paid out. 

I remember as a newly minted 21 year old, I once went to vegas and had a great plan for beating the house at roulette.  It was easy I thought, start at $1, then just double the bet every time you lose a round and eventually you’ll get everything you lost.  I mean seriously, how many times can the wheel come up red, 5, 7 times in a row maybe, as long as I have enough to get through 10 times in row on the same color, surely I’ll win.

Despite my brilliant plan, the odds were of course against me in the end.  A costly lesson, that I quickly went home and modeled in Excel only to find that I could have brought $1M to vegas, and before I made any sort of meaningful gains, I’d lose the whole thing.  And, yes, to lose a$1M it has to come up the same color some 20 times in a row, but eventually it does, something that experience doesn’t teach you the easy way.

My fear is that we(as a society) often take economic advice in somewhat the same way. 

Public: Dear Mr. Economist, what’s the best way to win at roulette?
Economist: Ok, here’s what you do, start with a $1 bet, then double it each time you lose and eventually you’ll win, in fact, the more money you start with the less likely it is you will lose. Of course there’s a chance that it comes up red 20 times in a row, but that risk is low.
Public: Makes sense let’s do that, and sure, we’re luckier than 20-30 reds in a row, and if it does happen 30 times in a row, then it must be that the casino is cheating and we can prosecute the greedy casino owners.
Politician: Yes, if it comes up red 30 times in a row, I think we have a good case against the greedy casino. Surely its more likely that they are crooked than that red comes up 30 times straight.

I don’t blame this all on economist, but clearly there is a disconnect within the public between understanding the cause and effect in basic economics.  It just seems very odd that skeptics have time to debunk spoon benders, back pokers, palm readers and star gazers, but no time to walk the public through the really tough part of economics.

-baloo

[ Edited: 29 January 2009 12:14 AM by Baloo ]
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Posted: 29 January 2009 08:12 AM   [ Ignore ]   [ # 188 ]
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Baloo - 28 January 2009 08:05 PM

One thing that I’ve been looking for but have yet to find is the James Randi of Economics.  I think its interesting that we have skeptics in all sorts of other areas, but it seems like we could really use a good skeptical movement in the field of economics.  Anyone know anyone doing this today?

-baloo

Absolutely. Ed Herman, Robin Hahnel, Hajoon Chang, Joseph Stiglitz, Dean Baker and many other economists, political economists or fellow travelers of heterodox economics. They routinely write and talk about how mainstream economics (ie free market capitalism - but also other forms) is a “myth” or faith-based economics. And they routinely employ a version of the scientific method for economics. They observe, hypothesize and test their theories.

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Posted: 29 January 2009 08:44 AM   [ Ignore ]   [ # 189 ]
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truthaddict - 29 January 2009 08:12 AM

... mainstream economics (ie free market capitalism - but also other forms) ...

I don’t know that free market capitalism is “mainstream economics”. It’s mainstream politics on the right wing, but that’s a different assertion.

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Posted: 29 January 2009 11:08 AM   [ Ignore ]   [ # 190 ]
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dougsmith - 29 January 2009 08:44 AM
truthaddict - 29 January 2009 08:12 AM

... mainstream economics (ie free market capitalism - but also other forms) ...

I don’t know that free market capitalism is “mainstream economics”. It’s mainstream politics on the right wing, but that’s a different assertion.

well I did also say “but also other forms.” I would disagree that free market capitalism is a right wing economic system. Carter, Clinton and Obama are free market advocates. on the campaign trail Obama said he was reading Adam Smith and that he “loves” markets.

But take the wikipedia entry for example:

Mainstream economics is a loose term used to refer to the non-heterodox economics taught in prominent universities. It is most closely associated with neoclassical economics.[1] Mainstream economists are not generally separated into schools, but two major contemporary orthodox economic schools of thought are the Saltwater school of the US coastal universities, notably including MIT, Berkeley, and Harvard, and the Freshwater school of the University of Chicago, which is associated with the Chicago school of economics. The Saltwater school is associated with Keynesian ideas of government intervention into the free market, while the Freshwater schools are skeptical of the benefits of the government.

It is largely defined as two schools of thought, both located in the US and both revolve around free market capitalism.

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Posted: 29 January 2009 11:28 AM   [ Ignore ]   [ # 191 ]
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truthaddict - 29 January 2009 11:08 AM

Carter, Clinton and Obama are free market advocates. on the campaign trail Obama said he was reading Adam Smith and that he “loves” markets.

One has to distinguish between a strict “free market advocate” like the people who write for the WSJ editorial page or Forbes from people like Carter, Obama, and mainstream economics. Mainstream economists “love” markets too, but not enough to believe in strict free market advocacy, which it seems to me is best described as laissez-faire or libertarian economic policies, a la some interpretations of the Chicago school or Milton Friedman.

To take another good example, Paul Krugman advocates for free markets, but not for laissez-faire economic policies. Free markets only get you so far. They have to be properly regulated. I am sure Joseph Stiglitz would agree.

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Posted: 29 January 2009 11:44 AM   [ Ignore ]   [ # 192 ]
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dougsmith - 29 January 2009 11:28 AM
truthaddict - 29 January 2009 11:08 AM

Carter, Clinton and Obama are free market advocates. on the campaign trail Obama said he was reading Adam Smith and that he “loves” markets.

One has to distinguish between a strict “free market advocate” like the people who write for the WSJ editorial page or Forbes from people like Carter, Obama, and mainstream economics. Mainstream economists “love” markets too, but not enough to believe in strict free market advocacy, which it seems to me is best described as laissez-faire or libertarian economic policies, a la some interpretations of the Chicago school or Milton Friedman.

To take another good example, Paul Krugman advocates for free markets, but not for laissez-faire economic policies. Free markets only get you so far. They have to be properly regulated. I am sure Joseph Stiglitz would agree.

theres a lot in what you wrote that i agree with and some i disagree with but none of that is my point. which is that there are many economists who are skeptical about faith-based economics.

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