May I humbly/respectfully suggest, Arnold, that you consider replacing your economics-is-not-a-science meme with an economics-is-like-applied-science (i.e. engineering and medicine) one.
Reading a draft of Jeffrey Friedman’s next book, I gather that this was John Dewey’s notion. Just as doctors often “treat empirically” (by trial and error), policy science can improve by trial and error.
The parallels with medicine are interesting. Just as it seems to be the case that a lot of health care spending goes to medical treatments with high costs and low benefits, it is the case that a lot of government programs and regulations have high costs and low benefits.
I reject Dewey’s model as a description of actual policy practice. Policy makers almost never design proper trials, and they almost never correct errors. Pretty much every anti-poverty program that has been tried since the 1960s is still around, regardless of how (or whether) it was evaluated.
In my latest book, I argue that the profit system does a much better job of trial-and-error learning. The incentives to learn are much stronger. If you make enough mistakes, you lose money and go out of business. Also, upstart companies are much more willing to attempt a radical innovation than are established organizations, whether those established organizations are corporations or government agencies.
Also, I believe that social phenomena are more complex than the problems that engineers encounter. That is why I see mathematics in economics as pretentious. More than that, it can be harmful, as it focuses economists on building models that are so simple that they are deceptive rather than helpful.
All that said, I prefer that economists present themselves as doctors than as scientists, as long as they make it clear that they have not discovered the cures for the diseases with which they are presented.
As a practicing engineer, I dispute the idea that economics is similar enough to draw useful parallels. If economics is an applied science, what is the underlying science? If it is applied, how is it repeatable (and actually repeated) enough to draw conclusions about whether the appropriate theorems have been applied to a particular problem, and whether they have been applied skillfully?
As the son of a doctor, I think the parallels between economics and medicine are only a little bit stronger than between economics and engineering. Medicine does lack a rigorous scientific undergirding for a lot of things, but our understanding of common medical conditions is far more complete and demonstrable than for economic conditions. Especially for macro-level afflictions, I think the diversity of mutually orthogonal explanations from highly regarded economists illustrates that they we (humanity) do not really understand the diseases, much less how to cure them.
One key difference between economics and other sciences is that the system adapts to the current beliefs. The rules change. It’d be interesting to get your thoughts.
For example, I am of the belief that economic agents target an overall volatility of wealth. So if you successfully take volatility out of the business cycle, people/businesses simply add leverage. Hence the massive leverage expansion during the Greenspan era. Volatility is still there, just in a different place. So a “rule” that worked at one point in time could easily have a different effect at another point in time.
Medicine makes a good analogy in that it encompass a very broad range of inquiry and in which there are some areas (ironically ‘macro-medicine’, large-scale procedures like setting bones or removing appendices, stopping bleeding, etc.) where the problems and underlying mechanisms are well understood and the procedures have high success rates and demonstrable benefits in excess of costs.
But there is also ‘micro-medicine’ involving conditions resulting from obscure and hopelessly complicated interacting phenomena on a genetic or molecular scale, and where understanding is weak and even the best attempts at treatment are of doubtful utility.
And yet the strong and weak parts tend to get lumped together in one high status profession, the latter getting to ride the reputation and prestige wave of the former, leading people to place too much confidence in the advice of the fields experts in those weak areas.
Mainstream economics has strong and weak areas in the same way, again correlating with causal density and complexity.
Asking a typical macroeconomic how to fix a recession is like asking a neurosurgeon how to fix autism.
Ask yourself: at what point in the history of medicine did it, apprehended in the aggregate, become a clear tangible (as opposed to placebo/psychological) positive contributor to human health. My educated guess is ~1850.
Then ask yourself where the analogized science of economics stands, again apprehended in the aggregate. Do the resources dedicated to economic study and the interventions justified by same deliver a positive net result and in which time periods or cultures under what forms of government or conditions?
I’m firmly in the not at all like engineering camp. One small example: sure we use models for structural design and lots of approximations. However, those approximations are typically made to simplify the problem, and not because “it’s too hard”, but because it’s “close enough”.
And the close enough proof is in the fact that buildings aren’t falling down all over the place… And when they do, you can typically read a very detailed report by ASCE or some other agency about the failure mechanism.
In contrast, I’m still waiting on THE definitive post mortem for the great recession.
Check out David Wooten’s brilliant and erudite Bad Medicine, a comprehensive history of how bad doctors were from the ancients to the 19th century .
Government and markets do different things so can’t be judged by the same criteria. Math isn’t that important, but data definitely is.
I think economics can be a science but like biology. Nobody ever wonders if biology is a science, we just realize how little we understand. Nobody ever seems confused that the math is the biology or surprised when they don’t match up. They just realize they have learned something else they didn’t know they didn’t know. Doctors are like the business majors of biology
I suspect economics suffers from a confidence game tied to winning political elections. You don’t win many votes telling people how interesting deep recessions are or how you can’t predict futures..
I’m flattered that you considered my suggestion, Arnold. I was very much thinking about engineering, something like the early days of bridge building rather than a trial and error model I think you are describing in medicine. Engineering deals with non-linear systems (in the mathematical sense), that is, complex systems with more variables than you can solve for (or are even aware of) and the same is true for economics. I agree completely with your assessment that mathematics in economics is pretentious and I guess my core thesis is that its due to an under-appreciation of non-linear systems. I also agree that economic systems are more complex (more non-linear) and that is the main point, there is a spectrum of complexity with non-linear systems and our confidence in those models should decrease with increasing complexity. Economics deals with math, data, and models just like engineering. Early bridges failed, the load models were not enough they needed to account for lateral winds, more failures and they had to account for fatigue due to uneven loads (trains on one side), more failures and they had to account for the brittleness of steel due to temperature, so on and so on. Bridges now fail less, viewing the process that got us to this point is more informative than the epistemology of pure science. I’m not assuming that each failure improves economic models, a failure without understanding the causation, either in conditions or new factors, should doom an economic model.
Medicine is also a mess; but wading into that morass is not for the faint of heart.