Concerning fields comparable to economics, a commenter wrote,
How about an analogy to medicine? We didn’t design the human body. It is a painfully complex system that emerged from evolution and some human intervention (cultural preferences for mates, for example). But we know how to fix it when it breaks under a large variety of circumstances and are getting better at it every day.
I think this is one of the more interesting analogies. I think it is helpful in understanding the preference for economists with “answers.” People would rather see a Shaman who promises to cure them than consult someone who admits that they have no cure.
Until around the late 19th century, a doctor was probably more likely to make you worse than make you better. Even now, we have Hansonian medicine, so progress in some areas has been somewhat offset by flawed thinking in others.
In economics, we face the additional challenge that the economy evolves not (typo corrected) at the speed of cultural evolution, which is faster than biological evolution. Thus, our theories have to hit targets that are moving much faster.
I think of economics as being about where medicine was around, say, 1900. But the pace of progress in economics is slower.
Typo? ” the economy evolves ^not^ at the speed of cultural evolution, which is faster than biological evolution”
Fixing cars is easier than fixing economies, because you can usually figure out the designer’s intentions. And as my Father once said, horses often fix themselves, but cars usually don’t.
Very good analogy. One way it breaks down is that with billions of humans we can learn in medicine by trial and error. And humans are really good at learning by trial and error. But we generally only get at most a couple of economic situations that are similar enough to be comparable which makes learning from them much harder.
If doctors always advised weight gain and only prescribed stimulants, then yes, economics would be like medicine.
Economics confronts the reality that virtually ANY policy faces aggressive opposition from somebody. In medicine, treatments that work are sometimes openly accepted. (Not necessarily things like exercise….)
This suggests to me that economics may face the inherit unpredictability of, say, weather. Because for almost any policy, there is some substantial group that will gain by thwarting or abusing it, very little that economics recommends will actually be accepted. (Medicine faces a similar problem, but to a lesser degree.)
You might be right; medicine in the late 1800s. Or ecology in 2015, when we really don’t know how to fix complex ecologies. The best we do is simplify the ecology to a single asset – say, corn, or cattle – and kill almost everything else.
” is a painfully complex system that emerged from evolution ”
How? Care to be more specific? I don’t believe it.
Certainly medicine is a much more reasonable scientific standard for economics to aspire to (much more so than physics). However, two primary hurdles inhibit the achievement of this ideal.
The first is, as the commenter pointed out, a lack of agreement about what constitutes “health” in terms of social systems. As G. K. Chesterton put it nearly 100 years ago:
“Now we do talk first about the disease in cases of bodily breakdown; and that for an excellent reason. Because, though there may be doubt about the way in which the body broke down, there is no doubt at all about the shape in which it should be built up again. No doctor proposes to produce a new kind of man, with a new arrangement of eyes or limbs…Medical science is content with the normal human body, and only seeks to restore it…This is the arresting and dominant fact about modern social discussion; that the quarrel is not merely about the difficulties, but about the aim. We agree about the evil; it is about the good that we should tear each other’s eyes out.”[1]
The second hurdle, as pointed out by Jim Manzi much more recently[2], is that we cannot generalize about the way societies will react to social “treatments” in same way that we can generalize about the way human bodies will react to medical treatments.
[1] https://www.gutenberg.org/files/1717/1717-h/1717-h.htm#link2H_4_0002
[2] http://www.weeklystandard.com/jim-manzi-talks-science-knowledge-and-freedom/article/666107
You might enjoy Greg Cohran’s recent thoughts on this subject:
https://westhunt.wordpress.com/2017/01/13/freedom-of-medicine/
“But we know how to fix it when it breaks under a large variety of circumstances” I’d like to see the numbers on this.
When I had encephalitis the resident neurologist spent 20 minutes telling me she couldn’t talk because she had to go on vacation. I kid not.
So, luckily (for me) that type of neurology usually resolves. If it was a fatal type I’d be dead. So what they did was nothing plus some unnecessary and painful and expensive tests.
So, I have doubts.
The problem with economics is when “economic laws” are used in some gov’t policy and there is an attempt to control people. In cases where no control is done, the economics works ok. In most cases, where gov’t is trying to control free-agent people, those mostly-rational people actively try to avoid and subvert the control, which often neutralizes the attempted control.
The key economic law that should be remembered: Incentives matter.
Whatever behavior gov’t wants more of should be explicitly rewarded — and EVERY behavior that is rewarded will see more of that behavior.
Helping the poor because they’re poor, inevitably, generates more poor; tho particular poor individuals often do get help.
This may be an interesting analogy from the point of view of thinking about why someone would wish it were true, but it falls apart rather quickly. If each of the 10 trillion cells of the human body, not to mention the 90 trillion other cells in or on the human body consisting of bacteria, viruses and other microorganisms, had an equal claim on its respective individual rights, then yes, the human body might offer a helpful analogy.
Even then, I don’t think it would be helpful in the way suggested, as it would only go to prove that many “cures” that may work on one economy don’t work on another economy that seemingly had the same problem (highlighting the monumental challenges of defining exactly what the problem is (as contrasted with symptoms) and what constitutes a cure — e.g. you would probably get different definitions of the problem and cure if you asked the virus vs. the antibody).
The analogy is not biology, it’s medicine. The reasons you state are actually economics is to the economy as medicine is to biology is a decent analogy.
If a doctor’s only option to treat a patient was by dispensing the same medication to every person in the world, then yes, it would be a good analogy. You can’t tweak each person’s economy separately.
I think the commenter vastly overestimates the state of human knowledge about the chemistry and biology of the human body. Ask any medicinal chemist online about how much we know about the body and how likely we are to be able to intelligently control even parts of it, much less its integrated whole.
Even though we don’t know much, relatively, about the body, it still springs from basic physical principles.
The fundamental difference between biology and economics that I see is that the human body, complex as it is, eventually boils down to a set of chemical and physical interactions that, however opaque to us now, can be discovered through experimentation. An economy is a set of interactions between highly unpredictable individuals. One might argue that in the aggregate and on average, an economy follows certain basic laws, which have been shown to be consistent, but they are laws of man (even if not consciously written), not necessarily of nature.
In a similar way, software engineering differs from the other engineering disciplines in that its precepts follow rules that derive from the designs of humans, not from the basic principles of nature. While many software problems can be described mathematically, just as economic problems can be, they are still descriptions of the behavior of complex systems defined by humans, not by the fundamentals of the universe.
I think there are two types of complex systems here: those derived through conscious effort and therefore subject to rules that are essentially arbitrary; and those that have developed from the basic physical underpinnings of the universe. (leaving aside philosophical ideas such as concepts of multiple universes or simulation, etc.)
The two types of systems are fundamentally different in that one is arbitrary, yet designed, and one springs from basic unchanging principles. While both may be explained through mathematical and scientific principles, the problem of controlling them differs by orders of magnitude.
When a doctor sets bones, he is doing 1% of the healing work. The other 99% is being done by incredibly complicated mechanisms inside specialist cells evolved for that purpose over a hundred million years, give or take. To say nothing of the immune system. A lot of successful medicine rides on these internal self-corrective processes, which are infinitely more sophisticated than our current medical understanding and capability.
In a way, all medicine rides on it. We are only now applying very modest tissue engineering strategies. And if we lose antibiotics efficacy some fear most progress will be lost.
I think we have some good ideas on how to fix the economy, too. It’s just that we currently prefer the shaman methods over the stuff that works better — like let people learn from trial and error. Most policy recommendations tend to result in fewer trials and too much noise on the error feedback loop to learn from them.
The same has been said of economics for over a century, as the excellent Illiberal Reformers book had shown.
Henry Farnam found that surgery was once primitive and dangerous, but advances in science, particularly the discovery of germs, had made it most beneficial to society. Similarly, the economic expert had by 1910 enough scientific knowledge to make its reforms “more effective and less dangerous.”
The analogy was repeated over 50 years later by Dr. Alain Enthoven, Assistant Secretary of Defense for Systems Analysis, who said “My general impression is that the art of systems analysis is in about the same stage now as medicine during the latter half of the 19th century; that is, it has reached the point at which it can do more good than harm.”
I personally think that economists don’t learn like medical doctors. Perhaps entrepreneurs and economies do, through trail-and-error methods, but economist themselves don’t seem to derive scientific truths from trial-and-error in the same way.