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Paul Krugman once said something to the effect that all economists agree on supply and demand, but disagree on everything else. I think you're right in your as

Paul Krugman once said something to the effect that all economists agree on supply and demand, but disagree on everything else. I think you're right in your assertion that the "dismal science" is cherry-picked to support a perspective, not unlike using hard science in the same way, but without the ability to reliably reproduce results.

snrplfth 10y ago
The trouble is that economists, of whatever theoretical school (well, except Marxians who are rather different) usually are asked to weigh in on the issues that are not well-investigated and where considerable disagreement exists. Basic concepts like supply and demand, and subjective value, are taken for granted by economists, even though they're the things that the average layperson does not understand and really should. The genuinely important insights of economics are too rarely discussed, while the controversies get all the airtime - so of course what we hear is the non-reproducible, opinion-driven stuff.
bjourne 10y ago
> Paul Krugman once said something to the effect that all economists agree on supply and demand, but disagree on everything else. That's why it is hard to take economists seriously. If economy is a science, then facts should establish themselves and economists should agree on more and more things. That does not seem to happen. Take the statement "Lowering income taxes causes people to work more and in the end generates more revenue for the state". That theory has been put to test in many countries (like in the US during Reagan's presidency) but they still can't agree on if it is true or not. So how can economy be a science when empirical evidence doesn't cause facts to accumulate?
- michaelkeenan 10y ago
  I searched for that Krugman quote and found nothing. I think he never wrote it. I think that is exemplary of the problem here - not that economists struggle with facts, but that most people struggle with facts, including facts about other people struggling with facts. I recommend this article at The Atlantic about what economists agree on. It has citations to surveys of economists: http://www.theatlantic.com/business/archive/2012/04/4-politically-controversial-issues-where-all-economists-agree/255600/ http://www.theatlantic.com/business/archive/2012/04/4-politi...
- claytonjy 10y ago
  I think it might be useful to distinguish micro and macroeconomics here; microeconomics is much easier to call a science, because lots of it can be experimentally validated. Macroeconomic systems can't be reproduced for experimentation in quite the same way, and are thus much harder to draw conclusions from. Related but reductionist cartoon: http://www.smbc-comics.com/?id=3117 http://www.smbc-comics.com/?id=3117
- snrplfth 10y ago
  Economics is a science the same way climatology is a science, or ecology is a science. While you can fairly accurately determine what will happen on very small scales on short time spans (microeconomics, in short), questions about what will happen on larger scales over longer time spans get exponentially more difficult as you scale up, since the system is so complex and so difficult to measure. It doesn't mean that it's not worth doing, it just means that there needs to be some epistemological humility there. And contrary to popular belief, economists would generally agree that certain facts have established themselves and been agreed upon. For example, subjective value: https://en.wikipedia.org/wiki/Subjective_theory_of_value https://en.wikipedia.org/wiki/Subjective_theory_of_value This is an essential insight of economics, and one that was not really systematically grasped until recently (and still not grasped by the majority of the public.) It is as close to true as a sociological/ecological thesis can be, and is almost universally accepted. But because it is so accepted, you don't hear much about it. What you're referring to is the Laffer curve - based on the observation that, at both 0% and 100% marginal tax rates, no tax revenue will be collected (none at 0% because no tax, essentially none at 100% because of disincentive.) That means that, in between those two end-points, there has to be a curve of some shape showing the total revenue collected, with a peak (or peaks) somewhere on it where revenue is maximized. The discussion is about where this peak is, and how the curve is shaped. To say "does lowering income taxes increase revenue" is an incomplete question: lower from what rate? Under what macroeconomic conditions? At what overall national wealth level? Interacting with what other taxes? Considering what conditions in capital markets? Etc, etc. Teasing out these huge numbers of other factors is the challenge of economic study, and why so many seemingly "simple questions" are unanswered: because they're not actually simple.
  - ghaff 10y ago
    They're not actually simple and we don't actually get to play god with populations of actual people interacting in the real world under different conditions. We can devise experiments that (imperfectly) try to compare the results of different legal and other environments on outcomes. And some compelling results in economics come about from creating especially interesting "experiments" in this manner.
  - bjourne 10y ago
- barry-cotter 10y ago
  "Lowering income taxes causes people to work more and in the end generates more revenue for the state". Reducing taxes does cause people to work more. Whether it results in more revenue for the state depends on how much income tax was before and after the change. Elasticity of labour supply is not constant over all tax rates. I know people like to crap on the Laffer curve but they crap on it because it's trivial if you have the barest knowledge of economics, not because it's false. Macroeconomics is closer to the morass you describe but it still accumulates truth, if possibly depressingly slowly and with thirty year periods of regress. Microeconomics is on much firmer ground, in large part because they have more data and it's easier to accumulate it. If you want a very readable introduction to price theory, which is a large part of microeconomics check out "Hidden Order" by David D. Friedman. It's based on his Price Theory textbook but rewritten for interest and readability. If you want something a bit more mathematically sophisticated, (basic calculus) look at Intermediate Microeconomics, Hal Varian.
  - bjourne 10y ago
    > Reducing taxes does cause people to work more. Is there any evidence to back that statement up?
- enoch_r 10y ago
  > Take the statement "Lowering income taxes causes people to work more and in the end generates more revenue for the state". That theory has been put to test in many countries (like in the US during Reagan's presidency) but they still can't agree on if it is true or not. So how can economy be a science when empirical evidence doesn't cause facts to accumulate? This is not the best example. When a panel of economists was asked whether "a cut in federal income tax rates in the US right now would raise taxable income enough so that the annual total tax revenue would be higher within five years than without the tax cut," none of them answered in the affirmative. 8% said they were "uncertain," and 71% either "disagreed" or "strongly disagreed." (5% answered "no opinion" and the rest didn't answer at all.) See: http://www.igmchicago.org/surveys/laffer-curve http://www.igmchicago.org/surveys/laffer-curve If you don't take economists seriously, you might not notice when they agree on things.
- meotai 10y ago
  It's a social science; you can't exactly run experiments like they do in natural sciences. There are measurement errors & omitted variables errors you have to deal with in social science.
  - gozur88 10y ago
    This. The real problem with making definitive statements in economics is you can't run double-blind experiments. Let's say you create some sort of giant monetary stimulus package. If the economy gets worse proponents will say "Whew! Just think how terrible things would have been without our stimulus package," and opponents will say "Things got worse because of the stimulus package!" There's no way to know who's right. The best you can do is make imperfect models to encapsulate trillions of individual decisions people make. But that's not proof.
  - alphonsegaston 10y ago
    And yet this shortcoming seems to in no way inhibit the field's broad pronouncements and interjection of themselves into public policy. Emmisaries of far more rigorous and testable scientific fields comport themselves with a great deal of academic probity(e.g. Climatologists whose verifiable observations have amongst the most dire of consequences for us, and yet whom still are cautious in their framing). Meanwhile, economists like Rogoff and Reinhart never missed a chance to peddle their faulty math and data errors as God's Only Truth to every outlet available. Or buddy up to oppressive regimes like Friedman and his University of Chicago ilk. Or to peddle discredited, vaguely eugenicist studies like Levitt and Dubner for the sake of selling books.

snrplfth 10y ago

The trouble is that economists, of whatever theoretical school (well, except Marxians who are rather different) usually are asked to weigh in on the issues that are not well-investigated and where considerable disagreement exists. Basic concepts like supply and demand, and subjective value, are taken for granted by economists, even though they're the things that the average layperson does not understand and really should. The genuinely important insights of economics are too rarely discussed, while the controversies get all the airtime - so of course what we hear is the non-reproducible, opinion-driven stuff.

bjourne 10y ago

> Paul Krugman once said something to the effect that all economists agree on supply and demand, but disagree on everything else. That's why it is hard to take economists seriously. If economy is a science, then facts should establish themselves and economists should agree on more and more things. That does not seem to happen. Take the statement "Lowering income taxes causes people to work more and in the end generates more revenue for the state". That theory has been put to test in many countries (like in the US during Reagan's presidency) but they still can't agree on if it is true or not. So how can economy be a science when empirical evidence doesn't cause facts to accumulate?

michaelkeenan 10y ago
I searched for that Krugman quote and found nothing. I think he never wrote it. I think that is exemplary of the problem here - not that economists struggle with facts, but that most people struggle with facts, including facts about other people struggling with facts. I recommend this article at The Atlantic about what economists agree on. It has citations to surveys of economists: http://www.theatlantic.com/business/archive/2012/04/4-politically-controversial-issues-where-all-economists-agree/255600/ http://www.theatlantic.com/business/archive/2012/04/4-politi...
claytonjy 10y ago
I think it might be useful to distinguish micro and macroeconomics here; microeconomics is much easier to call a science, because lots of it can be experimentally validated. Macroeconomic systems can't be reproduced for experimentation in quite the same way, and are thus much harder to draw conclusions from. Related but reductionist cartoon: http://www.smbc-comics.com/?id=3117 http://www.smbc-comics.com/?id=3117
snrplfth 10y ago
Economics is a science the same way climatology is a science, or ecology is a science. While you can fairly accurately determine what will happen on very small scales on short time spans (microeconomics, in short), questions about what will happen on larger scales over longer time spans get exponentially more difficult as you scale up, since the system is so complex and so difficult to measure. It doesn't mean that it's not worth doing, it just means that there needs to be some epistemological humility there. And contrary to popular belief, economists would generally agree that certain facts have established themselves and been agreed upon. For example, subjective value: https://en.wikipedia.org/wiki/Subjective_theory_of_value https://en.wikipedia.org/wiki/Subjective_theory_of_value This is an essential insight of economics, and one that was not really systematically grasped until recently (and still not grasped by the majority of the public.) It is as close to true as a sociological/ecological thesis can be, and is almost universally accepted. But because it is so accepted, you don't hear much about it. What you're referring to is the Laffer curve - based on the observation that, at both 0% and 100% marginal tax rates, no tax revenue will be collected (none at 0% because no tax, essentially none at 100% because of disincentive.) That means that, in between those two end-points, there has to be a curve of some shape showing the total revenue collected, with a peak (or peaks) somewhere on it where revenue is maximized. The discussion is about where this peak is, and how the curve is shaped. To say "does lowering income taxes increase revenue" is an incomplete question: lower from what rate? Under what macroeconomic conditions? At what overall national wealth level? Interacting with what other taxes? Considering what conditions in capital markets? Etc, etc. Teasing out these huge numbers of other factors is the challenge of economic study, and why so many seemingly "simple questions" are unanswered: because they're not actually simple.
- ghaff 10y ago
  They're not actually simple and we don't actually get to play god with populations of actual people interacting in the real world under different conditions. We can devise experiments that (imperfectly) try to compare the results of different legal and other environments on outcomes. And some compelling results in economics come about from creating especially interesting "experiments" in this manner.
- bjourne 10y ago
barry-cotter 10y ago
"Lowering income taxes causes people to work more and in the end generates more revenue for the state". Reducing taxes does cause people to work more. Whether it results in more revenue for the state depends on how much income tax was before and after the change. Elasticity of labour supply is not constant over all tax rates. I know people like to crap on the Laffer curve but they crap on it because it's trivial if you have the barest knowledge of economics, not because it's false. Macroeconomics is closer to the morass you describe but it still accumulates truth, if possibly depressingly slowly and with thirty year periods of regress. Microeconomics is on much firmer ground, in large part because they have more data and it's easier to accumulate it. If you want a very readable introduction to price theory, which is a large part of microeconomics check out "Hidden Order" by David D. Friedman. It's based on his Price Theory textbook but rewritten for interest and readability. If you want something a bit more mathematically sophisticated, (basic calculus) look at Intermediate Microeconomics, Hal Varian.
- bjourne 10y ago
  > Reducing taxes does cause people to work more. Is there any evidence to back that statement up?
enoch_r 10y ago
> Take the statement "Lowering income taxes causes people to work more and in the end generates more revenue for the state". That theory has been put to test in many countries (like in the US during Reagan's presidency) but they still can't agree on if it is true or not. So how can economy be a science when empirical evidence doesn't cause facts to accumulate? This is not the best example. When a panel of economists was asked whether "a cut in federal income tax rates in the US right now would raise taxable income enough so that the annual total tax revenue would be higher within five years than without the tax cut," none of them answered in the affirmative. 8% said they were "uncertain," and 71% either "disagreed" or "strongly disagreed." (5% answered "no opinion" and the rest didn't answer at all.) See: http://www.igmchicago.org/surveys/laffer-curve http://www.igmchicago.org/surveys/laffer-curve If you don't take economists seriously, you might not notice when they agree on things.
meotai 10y ago
It's a social science; you can't exactly run experiments like they do in natural sciences. There are measurement errors & omitted variables errors you have to deal with in social science.
- gozur88 10y ago
  This. The real problem with making definitive statements in economics is you can't run double-blind experiments. Let's say you create some sort of giant monetary stimulus package. If the economy gets worse proponents will say "Whew! Just think how terrible things would have been without our stimulus package," and opponents will say "Things got worse because of the stimulus package!" There's no way to know who's right. The best you can do is make imperfect models to encapsulate trillions of individual decisions people make. But that's not proof.
- alphonsegaston 10y ago
  And yet this shortcoming seems to in no way inhibit the field's broad pronouncements and interjection of themselves into public policy. Emmisaries of far more rigorous and testable scientific fields comport themselves with a great deal of academic probity(e.g. Climatologists whose verifiable observations have amongst the most dire of consequences for us, and yet whom still are cautious in their framing). Meanwhile, economists like Rogoff and Reinhart never missed a chance to peddle their faulty math and data errors as God's Only Truth to every outlet available. Or buddy up to oppressive regimes like Friedman and his University of Chicago ilk. Or to peddle discredited, vaguely eugenicist studies like Levitt and Dubner for the sake of selling books.