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Call it what you want, but it is most definitely not even close to on the same level of rigor as a hard science like physics or chemistry. Nor can it ever be ev

Call it what you want, but it is most definitely not even close to on the same level of rigor as a hard science like physics or chemistry. Nor can it ever be even comparable to a field like psychology because economics is inherently political. The commenter said that capitalism is unequivocally the best system, and to say otherwise is like denying that the earth is flat. Under what metrics is capitalism the best? Unless we can all agree on the exact same set of metrics with the exact same prioritization, then the question of whether or not capitalism is the best system is an inherently political question. The commenter mentioned maximizing GDP (as would most economists). GDP is a heavily flawed metric that gets way more attention than it should. Apart from broken window fallacy and such, it says nothing about distribution of wealth, living conditions, happiness, effect on environment, non-monetary output (eg. open source software), technological advancement, social mobility, etc. It would be impossible to reduce any of these into a single meaningful metric. The "rigor" you speak of in its models are comically oversimplified to the point where they're often completely divorced from reality and useless. One only needs to look at the atrocious track record of economists to see the uselessness of them. It's called the "dismal science" for a reason.

tptacek 9y ago
That's not why it's called "the dismal science". You sre a very simple Google query away from learning the origin of that term. Your argument about the empirical validity of economic models would be more persuasive if you could cite some of those models that are in common use in the profession, and formulate an argument about how they oversimplify reality.
- RealityNow 9y ago
  Well I already explained why GDP, the core metric economists fixate on, is flawed and incomplete. Unemployment rate as well is incomplete in that it doesn't account for those who drop out of the labor force (not to mention it says nothing of job quality or wages). I think at this point the burden of proof is on economists to justify their profession. They completely failed to foresee the recent financial crisis, with the so-called "Great Moderation" and economists like Ben Bernanke saying the depression problem has been solved. * Theory of competitive advantage is flawed and doesn't hold up to reality. Free trade is not unequivocally good. I wrote about it in this comment https://news.ycombinator.com/item?id=15159057 https://news.ycombinator.com/item?id=15159057 , but I'm basically parroting economist Ha Joon Chang who wrote multiple books about this * The assumption of individuals being rational and utility-maximizing is false (eg. charity, stock market). * Efficient market hypothesis. See any financial asset bubble. * Austerity economics. The severity of the Great Depression was exacerbated by the government's austerity response. Yet here we are 80 years later demanding austerity from Greece and such. * Money multiplier http://positivemoney.org/how-money-works/advanced/the-money-multiplier-and-other-myths-about-banking/ http://positivemoney.org/how-money-works/advanced/the-money-... * Phillips Curve Steve Keen wrote a book called "Debunking Economics" that explains theoretical flaws in the basic supply/demand curves that are the foundation of economics, though I'll admit I didn't read the book. Ultimately though, neoclassical economics is just too damn oversimplified to result in many meaningful actionable policy takeaways. It's too constrained by its owned rigid model of how economies are supposed to work, and thus too free market dependent and status-quo preserving.
  - JamesBarney 9y ago
    First of all thanks for the recommendation for "Bad Samaritans". He makes an interesting set of arguments against free trade, and I think I might buy the book and explore them. But almost every argument you bring up, was brought up a decade ago by economists, and is now considered party mainstream economics literature. Unemployment rate - Every economists knows this, unemployment rate is not the only measure of employment they use. Another one is the "prime age employment population ratio" which doesn't suffer from these same problems. GDP is again only one measure. Here is the OECD talking about how GDP is only one measure of life and well being. http://www.oecd.org/statistics/measuring-well-being-and-progress.htm http://www.oecd.org/statistics/measuring-well-being-and-prog... So economics is well aware of this. You say they failed to foresee the financial crisis, but western medicine fails to cure cancer. That doesn't mean Western Medicine is bunk, because it's still your best shot at not dying of disease. And it would have been far worse if we didn't know about fiscal or monetary policy. It's true free trade is still thought of as unequivocally producing an increase in efficiency and GDP. But the negative effects are starting to be researched. A minority of economists think individuals are rational and utility maximizing. EMH is again something economists are split about, and most economists are have much more nuanced view of this that doesn't prevent asset bubbles. And with the money multiplier, there is an argument about the mechanism. But that is different than saying that money isn't multiplier, or that reserve ratios don't have any influence on the monetary base. Philips curve describes a correlation between inflation and employment, a relationship that holds 90% of the time. It seems like your problem is with a straw man Chicago school hardliner(not for instance Paul Krugman), not with the majority of the field of economics which pretty much agrees with you on everything(besides free trade but this is changing). And maybe Ha Joon Chang is right, but there is also a lot of evidence on the other side that free trade is very beneficial to economies. It's not an open and shut case against free trade. Remember economics is really hard. Especially macroeconomics(the portion you are critical of) which is probably the hardest science there is. There are no controlled trials. You have statistical experiments where n is maybe a 100, and all trials are hopelessly confounded.

tptacek 9y ago

That's not why it's called "the dismal science". You sre a very simple Google query away from learning the origin of that term. Your argument about the empirical validity of economic models would be more persuasive if you could cite some of those models that are in common use in the profession, and formulate an argument about how they oversimplify reality.

RealityNow 9y ago
Well I already explained why GDP, the core metric economists fixate on, is flawed and incomplete. Unemployment rate as well is incomplete in that it doesn't account for those who drop out of the labor force (not to mention it says nothing of job quality or wages). I think at this point the burden of proof is on economists to justify their profession. They completely failed to foresee the recent financial crisis, with the so-called "Great Moderation" and economists like Ben Bernanke saying the depression problem has been solved. * Theory of competitive advantage is flawed and doesn't hold up to reality. Free trade is not unequivocally good. I wrote about it in this comment https://news.ycombinator.com/item?id=15159057 https://news.ycombinator.com/item?id=15159057 , but I'm basically parroting economist Ha Joon Chang who wrote multiple books about this * The assumption of individuals being rational and utility-maximizing is false (eg. charity, stock market). * Efficient market hypothesis. See any financial asset bubble. * Austerity economics. The severity of the Great Depression was exacerbated by the government's austerity response. Yet here we are 80 years later demanding austerity from Greece and such. * Money multiplier http://positivemoney.org/how-money-works/advanced/the-money-multiplier-and-other-myths-about-banking/ http://positivemoney.org/how-money-works/advanced/the-money-... * Phillips Curve Steve Keen wrote a book called "Debunking Economics" that explains theoretical flaws in the basic supply/demand curves that are the foundation of economics, though I'll admit I didn't read the book. Ultimately though, neoclassical economics is just too damn oversimplified to result in many meaningful actionable policy takeaways. It's too constrained by its owned rigid model of how economies are supposed to work, and thus too free market dependent and status-quo preserving.
- JamesBarney 9y ago
  First of all thanks for the recommendation for "Bad Samaritans". He makes an interesting set of arguments against free trade, and I think I might buy the book and explore them. But almost every argument you bring up, was brought up a decade ago by economists, and is now considered party mainstream economics literature. Unemployment rate - Every economists knows this, unemployment rate is not the only measure of employment they use. Another one is the "prime age employment population ratio" which doesn't suffer from these same problems. GDP is again only one measure. Here is the OECD talking about how GDP is only one measure of life and well being. http://www.oecd.org/statistics/measuring-well-being-and-progress.htm http://www.oecd.org/statistics/measuring-well-being-and-prog... So economics is well aware of this. You say they failed to foresee the financial crisis, but western medicine fails to cure cancer. That doesn't mean Western Medicine is bunk, because it's still your best shot at not dying of disease. And it would have been far worse if we didn't know about fiscal or monetary policy. It's true free trade is still thought of as unequivocally producing an increase in efficiency and GDP. But the negative effects are starting to be researched. A minority of economists think individuals are rational and utility maximizing. EMH is again something economists are split about, and most economists are have much more nuanced view of this that doesn't prevent asset bubbles. And with the money multiplier, there is an argument about the mechanism. But that is different than saying that money isn't multiplier, or that reserve ratios don't have any influence on the monetary base. Philips curve describes a correlation between inflation and employment, a relationship that holds 90% of the time. It seems like your problem is with a straw man Chicago school hardliner(not for instance Paul Krugman), not with the majority of the field of economics which pretty much agrees with you on everything(besides free trade but this is changing). And maybe Ha Joon Chang is right, but there is also a lot of evidence on the other side that free trade is very beneficial to economies. It's not an open and shut case against free trade. Remember economics is really hard. Especially macroeconomics(the portion you are critical of) which is probably the hardest science there is. There are no controlled trials. You have statistical experiments where n is maybe a 100, and all trials are hopelessly confounded.