How Seriously Can We Take Economics As A Science?

Since we are going to be writing a lot about economics in this blog, we should spend some time figuring out how seriously we should take it as an authority on the behavior of people. Because it is limited to statements on human activity in the sphere of wealth production and consumption, it is properly considered a social science.

Is there such a thing? 

Let us first be clear about what we mean when we use the word science. A science is generally considered to be a study of some part of reality in which definite predictions can be made given a definite set of antecedents. (A physicist would say that given a set of initial conditions and boundary conditions, he can solve a set of equations to determine the future behavior of the system.) Phenomena are observed, theories that make testable predictions are constructed, experiments that test the predictions are made to either substantiate the theories or disprove them, Rinse and repeat.

The problem with thinking about a social science as a real science is its main subject has something to do with the behavior of human beings. When a physical science like physics studies a many body problem using statistical mechanics, the bodies interact with each other via one or more of four fundamental forces that are well defined. The physicist can write down equations that exactly describe the interactions and their effects. (Well, at least he can down to the ultra small scale quantum level, where indeterminacy of some quantities is built into reality. But we will not go there!) In a many body problem that a social science studies, the individual particles that interact are human beings. Human beings are famously (or infamously as the case may be) indeterminate creatures whose behavior is rarely completely predictable. That is why so many novels have been and will continue to be written.

So whether or not a discipline such as economics is  a science  depends on whether the discipline can make accurate predictions of the system it studies. In this we have to admit that if economics is not yet a science, it is very science-like. Some economic laws, such as supply and demand and marginal utility, have made predications that have  been seen to be at least qualitatively correct. Others such as Ricardo’s law of comparative advantage have a more normative nature and are harder to substantiate. Other proposed laws. such as Malthus’ iron law of wages or the labor theory of value have been definitely disproven. At least one controversial economic law, J.B. Say’s law of markets, inspires great conflict between economists.   Keynesian economists even refuse to consider it a law, while many neoclassical economists would opine that it is coequal with supply and demand in importance.

So can we take economics seriously? Since economists disagree among themselves what the basic tenets (read laws) of economics are, this depends on which economists you trust and believe. At this point, economics can take on some of the aspects of a religion because it can be based on faith. Because of this tendency, one should be very careful at scrutinizing the non-faith-based evidence that supports an economic statement. One thing, however, is very sure: we cannot afford not to take economics seriously, as its subject lies at the center of all our lives.

In future individual posts I will discuss each of the major laws (or reputed laws) of economics separately.

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