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I've come to believe that economics is essentially a fraudulent field of study, akin to social psychology. The result of the growing influence of those trained

• fnord123 6y ago
  There are a lot of interesting parts of economics and a lot of important measurements but indeed the story telling surrounding it is too loose. I think the relationship between astrology and astronomy is appropriate: Tycho Brahe and Johannes Kepler were astrologers and their wonderful measurements of heavenly bodies were attempts to make better astrological predictions. Through their work and the work of others was astronomy born. We are still waiting for Economics' version of astronomy. Maybe this is econometrics?
• ahussain 6y ago
  I'm curious how you relate this to the emergence of statehood. For modern states to exist there needs to be some state-level understanding of concepts like inflation, fiscal policy, central bank interest rates etc. and at the moment it seems like most of that knowledge is best understood by the economics profession. If all economists disappeared, surely we would all be worse off in the long run?
  • jcbrand 6y ago
    The idea that the state needs to pull levers in order to manage things like inflation and interest rates isn't supported by all economists. It's definitely not supported by the Austrian school.
    • pjc50 6y ago
      The state or its bank largely has to set interest rates to something - it gets to choose central bank deposit rates and bond coupons. It doesn't get to set yield (that's set at auction) but it has to set the bond payout to something. The question then arises as to whether the state has a responsibility to manage inflation and unemployment.
      • eru 6y ago
        > The state or its bank largely has to set interest rates to something - it gets to choose central bank deposit rates and bond coupons. It doesn't get to set yield (that's set at auction) but it has to set the bond payout to something. The Monetary Authority of Singapore doesn't do anything about interest rates. Neither does the equivalent institution in Hong Kong. The policy lever in Singapore is the foreign exchange rate. In Hong Kong, they more or less just fix the exchange rate to the USD. Singapore happens to have lots of government debt for weird reasons. Hong Kong has almost none. (And you could easily imagine a version Singapore without government debt.) So there wouldn't necessarily be deposit rates or bond coupons to set at all. In general, economies also don't need central banks. Many economies do just fine without them. Good examples today are lots of smaller economies that just don't bother with their own currencies, the process is commonly called 'dollarisation'. But historically we also had examples of successful large economies with privately issues means of payment and minimal government regulation. The free banking episodes in eg Canada, Scotland or Australia are well documented.
        • pjc50 6y ago
          > economies also don't need central banks. Many economies do just fine without them .. until you need a lender of last resort. > lots of smaller economies that just don't bother with their own currencies, the process is commonly called 'dollarisation' Also the Eurozone. And there we saw what the risk is under a real shock of having debt in externally-controlled currency. Describing dollarisation as being without a central bank is like "serverless"; there is a server/central bank, but it's in the US and occasionally goes down for reasons outside your control or understanding.
  • Mizza 6y ago
    This is a really good question, and it's the exactly the kind of question which needs to be asked but we're very afraid of what will happen when people start thinking about things like that. I'm going a bit out of bounds here, but I think we've already entered into an early phase of post-statehood already, but haven't really realized it yet. The American nation is completely subservient to those manning the helm of the financial structure and serves no other purpose to allow it to continue operating as smoothly as possible until there is no more profit left to extract. Politics and material conditions have become completely detached from each other, and I think the past two elections have completely proven this. There are still large ideological and political voids to explore. Where are the non-Marxist populist economists? Where are the conservative socialists? Why must we choose between 1800s Marxism and 21st century neoliberalism? People have been crying wolf about fascism a lot lately, but I think it there is a real danger that true fascism will emerge in a serious way once again once the dominoes start to fall in a few years if viable alternatives aren't developed in the meantime.
    • pjc50 6y ago
      > Where are the non-Marxist populist economists? There have been some of those; populist handouts are popular with authoritarian leaders. Arguably this was the origin of fascism - explicitly anti-communist populist arguments for solutions to the bad economic conditions of the 1930s. > Where are the conservative socialists? Do Fabianism and Blairism meet this description?
    • bscphil 6y ago
      Hang on, you are looking for "non-Marxist populist economists" but you're worried that "true fascism will emerge in a serious way"?? Which is it that you're worried about, communism or fascism? They're very different things. Even more so now that recent Marxist academics have mostly gone down explicitly anti-authoritarian routes. You want a third strain of populism that's "socialist" but not "Marxist"? What exactly is the "void" here?
      • eru 6y ago
        The comment you replied to was perhaps a bit confused, but there's plenty of non-Marxist socialism out there. Marx is kind of overrated anyway. (And, of course, 'Marxism' is being thrown around as a general accusation a lot. Just like 'neoliberalism' was a popular slur.)
  • speeder 6y ago
    The sole purpose of the state, is organize its population for war. All other stuff a state do, is extras. There were stateless societies with things like social welfare and public health and so on. But the purpose of the state itself, as organization, is organize for war, states not only can exist without economists, they exist for 5000+ years, and for much of that time without any economist existing, and some states right now still don't rely on economists. EDIT: if you disagree with me, explain why, do not downvote.
    • notahacker 6y ago
      > There were stateless societies with things like social welfare and public health and so on. Citation needed (unless we're talking about village-sized communities sharing harvest and giving access to a witch doctor, which is not the same thing, logistically) States certainly existed without economists, but the world doesn't half look richer since states started caring more about economist hobby horses like trade policies, monetary stability, investment and human capital and less about gold reserves and military action to expand them. Apart from anything else, they came up with an awful lot of influential arguments about purposes for and measures of prestige of states other than efficiently plundering their neighbours
      • eru 6y ago
        Well, I think humanity got lucky that by and large since the industrial revolution many things that improved human welfare also improved fighting power. The economist hobby horses you mention do mean that you nations can spend more resources on their military. That's both in the steady state, and what extras they can mobilize in terms of emergencies.
    • TeMPOraL 6y ago
      Counter-theory: states exist to coordinate large groups of people for mutual gain, mostly in form of shared services (such as law, law enforcement, defense, thriving markets, but in current era also healthcare and social security) and wealth redistribution (taxes go in, subsidies come out). They may start as an attempt by a group of people to subjugate and extract wealth from a wider group of people, but they don't grow and survive unless they offer all these "extras". In this way, they're another step of the natural way people divide into hierarchies as the group size grows beyond a size that's manageable through social conventions (which happens to be more or less Dunbar's number). Now that explains why they exist and why people accept them. As for their purpose, I'm reminded of the good ol' POSIWID[0] - "the purpose of a system is what it does". -- [0] - https://en.wikipedia.org/wiki/The_purpose_of_a_system_is_what_it_does https://en.wikipedia.org/wiki/The_purpose_of_a_system_is_wha...
  • eru 6y ago
    That reminds me a bit of steam engines: engineers were building quite successful steam engines and thermodynamics was only developed later in order to really understand how those engines worked. Of course, later on thermodynamics helped build better engines to an extent. But the causation is from engineering to science. Similar for modern states. Also specifically central banks are a fairly recent idea in many parts of the world. And areas like Canada, Scotland, Australia etc did just fine without them, or actually even better. (I actually do like economics and think it's very important and useful. But politicians and civil servants can run a modern state just fine without economists.)
• pfortuny 6y ago
  It is akin to psychology and social sciences but as they “use” mathematics, they get a free pass.
• h0l0cube 6y ago
  > I've come to believe that economics is essentially a fraudulent field of study, akin to social psychology Nit: psychology as a broad field of study isn't fraudulent. Perhaps sub-fields of psychology, and earlier theories, are somewhat problematic, but you can't argue that something like operant conditioning doesn't have any utility.
  • jcbrand 6y ago
    They mentioned "social psychology" which is one of the sub-fields.
    • deleted 6y ago
      [deleted]
    • h0l0cube 6y ago
      Fair call. Perhaps there's no merit to social psychology.
  • Mizza 6y ago
    I actually have a degree in psychology with a concentration in neuroscience, so I took a range of hard-science neurology classes and the required "softer" classes, and I came away with the belief the field is, largely, a sham. There are exceptions, but even some of the "hard science" subfields are really just soft-science with technological window dressings. I mean this at both low and high levels. At the low level, there are field-wide issues with reproducibility, p-hacking, sample size and selection, deliberate ignorance of compounding variables, etcetera. At the high level, the field simply cannot do what it claims to be able to do - explain the emergence of the mind and its role in behavior decision making, and will not be able to do so with the current approach that it takes, and it has very little to show in the way of falsifiability and predictive power. The utility of even the basic stuff like operant conditioning breaks down outside of all but the most constrained lab conditions, but it is largely not discussed for the same reasons I mentioned above - it is too uncomfortable to admit. I think the politics surrounding the 'Rat Park' experiment[0] is an illustration of this. There are counter-examples - behavioral and drug therapies which "work" (although it's often hard to say _why_ within any definitive proof) - but I don't think they're enough to shore up the whole field against this criticism. [0] https://en.wikipedia.org/wiki/Rat_Park https://en.wikipedia.org/wiki/Rat_Park
• pratik661 6y ago
  I'm not an economist, but to me it looks like academic economists are turning more and more to validating their theories with data. As a field, it looks like its shifting towards greater empiricism. This is likely due to the deluge of data available that previous generations of economists didn't have access to. So that makes me curious, what aspects of economics seems fraudulent in your opinion?
• tim333 6y ago
  I'm not sure if fraudulent is the word but there seems a trend to apply physics like models (you apply energy x to an object and the temperature increases by y say) to human behaviour (increase interest rates by x and spending increases by y). But human behaviour isn't like that - people do what seems a good idea the time which is a way more complex thing.
  • eru 6y ago
    Economists are aware of these problems. And many other problems we can come up with while philosophizing from our arm chairs. The economic modeling principle of 'rational expectations' is one attempt to deal with exactly the thing you pointed out. Basically it says that you have to assume that in aggregate people in your model economy are at least as smart as your model. But rational expecations' got a bad rep amongst non-economists.
    • tim333 6y ago
      >In economics, "rational expectations" are model-consistent expectations, in that agents inside the model are assumed to "know the model" and on average take the model's predictions as valid. Still seems to be overdoing the rational bit when something like 1/3 of americans believe in ghosts, UFOs and so on.
      • eru 6y ago
        Wikipedia explains it thus: > Rational expectations theories were developed in response to perceived flaws in theories based on adaptive expectations. Under adaptive expectations, expectations of the future value of an economic variable are based on past values. For example, people would be assumed to predict inflation by looking at inflation last year and in previous years. Under adaptive expectations, if the economy suffers from constantly rising inflation rates (perhaps due to government policies), people would be assumed to always underestimate inflation. Many economists have regarded this as unrealistic, believing that rational individuals would sooner or later realize the trend and take it into account in forming their expectations. Even people believing in ghosts might be able to acquire the necessary cynicism.