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Economics isn't a science. > I call it organized religion with equations, superstition. The only way to become free of superstition is through overcoming. But

by sacomo 6y ago

Economics isn't a science. > I call it organized religion with equations, superstition. The only way to become free of superstition is through overcoming. But you need to study. I’ve always pissed off my academic colleagues and other economists who actually believe that is real science what they are doing. > Our mathematical models of the weather can be judged by objective reality. If I am a meteorologist and come up with a prediction that tomorrow there is going to be a heatwave in Leicester square, all we have to do is to wait until tomorrow to see if I’m right or wrong. The weather will either confirm or junk my theories about it. > Let’s say that I have the same kind of computer model and actual machine and data mining that the meteorologist does, but instead of using it to predict the weather I use it to predict the stock exchange. And suppose that I was somebody very highly respected as a predictor of stock exchange changes and let’s say that today, I were to predict that tomorrow is going to be a major crash in the stock exchange. There might be because I predicted it! In society and in the economy, our beliefs about the phenomenon under study are part of the phenomenon under study. > ~ Yanis Varoufakis Anyone who says otherwise is trying to convince you why the poor should exist.

derbOac 6y ago
It doesn't mean economics can't be scientific, only that, e.g., the act of measuring can't be separated from the measurand. Sound familiar? Of course, the solution is pretty trivial now: commit the predictions to a blockchain or third party under seal, encrypted, whatever, and reveal it later. Or start applying quantum mechanical descriptions to economics. This paper and discussion are sort of interesting because there's been analogous debates about ergodicity assumptions in psychology modeling growing over the last couple of decades. They started in the 90s and have become prominent topics of discussion in the last decade or so. Almost no one really believes ergodicity assumptions truly hold anymore in those discussions. The catch is that neither necessarily does stationarity. That is, in the Nature Physics paper cited, something like the left side of Equation 1, although defineable, is not really estimable (because any function of time will change over time), so the right side, although not strictly equal to the left, becomes just as good of an estimate in many cases (because a system at one point in time practically speaking becomes a different system at a different point in time). The problem isn't in the expectations, it's in the uncertainties around those expectations -- or at least, in understanding when the uncertainty about the long-term time average of f is great enough that using the [cross-sectional] expectation value of f is better in some sense. Put another way, are there times when it makes sense to predict your future self better by looking to other persons, or are you always better off treating your situation as unique? The discussions in the paper are generally about different types of issues, but they dovetail and coincide in certain ways. I'd have to reread the paper cited in the piece to get a better grasp on how. I'm not disagreeing with it; I think it's interesting, but wonder if it's falling into the trap itself is criticizing others for at some level.
didibus 6y ago
> Economics isn't a science Why not? Human trade is a natural phenomenon, and economics is the study of its structure and behavior. I don't see why that couldn't be a science. Now if you mean to say that we're far from understanding it properly, or that there's little it has yet allowed us to apply for practical needs, maybe. But I'm not following the "it's not a science" bit. Edit: Oh, or you are criticizing that the current practice isn't properly using the scientific method for it.
pzone 6y ago
That the poor exist is not surprising at all. For almost all of the 200k years of human history, everyone was poor. It is the default human condition. Only in the modern era have many people managed to escape poverty. The interesting empirical question is how and why the creation of wealth is possible, and how to foster greater prosperity.
- bromuro 6y ago
  At this point I wonder what “being poor” means.
  - imtringued 6y ago
    It basically means being worse off than somebody else. There are fair and unfair ways to create poverty.
imtringued 6y ago
>why the poor should exist. That's an area of politics. You can create poverty by increasing living standards faster than people can increase their income. You can create poverty by allowing people to increase their income beyond someone else's income because poverty can always be relative. You can increase poverty by making it harder to get a job in the first place. There are so many reasons that have nothing with economics but politics. Whether the coin flip game increases poverty or not is also purely about politics. If the one lucky guy cooperates with all the other players then everyone is better off. That cooperation can be implemented as a government policy.
- asianbison 6y ago
  After you say "That's an area of politics" you give two economic theories that reason poverty's production. Is poverty an indicator of a better economy? Do the poor need to exist in better economies? What makes an economy better in the first place? These are all questions studied by economists and all influence this "should poor exist" question. There is no reason to qualify economic questions by saying they're political; they just coincide and that is all.
gtsop 6y ago
I find varoufakis to be a very unrrliable source of information. Full of falacies and contradictions. So let's fix this statement and get on with our lives: Economics as practiced by most contemporary analysts isn't a science because they don't even try to see it as a science
nix23 6y ago
>Anyone who says otherwise is trying to convince you why the poor should exist. That's an easy one, because others can have have much more then, no convincing needed.
tim333 6y ago
Well, it's a 'social science': >the branch of science devoted to the study of societies and the relationships among individuals within those societies. (wikipedia) Which coming from a physics background I think of as not a proper science but lots of people study that stuff and you can get some results out of it. I think people get in trouble with economics if they start thinking it's an exact science like physics rather than a guess at what a bunch of people will do.

by sacomo 6y ago

derbOac 6y ago

It doesn't mean economics can't be scientific, only that, e.g., the act of measuring can't be separated from the measurand. Sound familiar? Of course, the solution is pretty trivial now: commit the predictions to a blockchain or third party under seal, encrypted, whatever, and reveal it later. Or start applying quantum mechanical descriptions to economics. This paper and discussion are sort of interesting because there's been analogous debates about ergodicity assumptions in psychology modeling growing over the last couple of decades. They started in the 90s and have become prominent topics of discussion in the last decade or so. Almost no one really believes ergodicity assumptions truly hold anymore in those discussions. The catch is that neither necessarily does stationarity. That is, in the Nature Physics paper cited, something like the left side of Equation 1, although defineable, is not really estimable (because any function of time will change over time), so the right side, although not strictly equal to the left, becomes just as good of an estimate in many cases (because a system at one point in time practically speaking becomes a different system at a different point in time). The problem isn't in the expectations, it's in the uncertainties around those expectations -- or at least, in understanding when the uncertainty about the long-term time average of f is great enough that using the [cross-sectional] expectation value of f is better in some sense. Put another way, are there times when it makes sense to predict your future self better by looking to other persons, or are you always better off treating your situation as unique? The discussions in the paper are generally about different types of issues, but they dovetail and coincide in certain ways. I'd have to reread the paper cited in the piece to get a better grasp on how. I'm not disagreeing with it; I think it's interesting, but wonder if it's falling into the trap itself is criticizing others for at some level.

didibus 6y ago

> Economics isn't a science Why not? Human trade is a natural phenomenon, and economics is the study of its structure and behavior. I don't see why that couldn't be a science. Now if you mean to say that we're far from understanding it properly, or that there's little it has yet allowed us to apply for practical needs, maybe. But I'm not following the "it's not a science" bit. Edit: Oh, or you are criticizing that the current practice isn't properly using the scientific method for it.

pzone 6y ago

That the poor exist is not surprising at all. For almost all of the 200k years of human history, everyone was poor. It is the default human condition. Only in the modern era have many people managed to escape poverty. The interesting empirical question is how and why the creation of wealth is possible, and how to foster greater prosperity.

bromuro 6y ago
At this point I wonder what “being poor” means.
- imtringued 6y ago
  It basically means being worse off than somebody else. There are fair and unfair ways to create poverty.

imtringued 6y ago

>why the poor should exist. That's an area of politics. You can create poverty by increasing living standards faster than people can increase their income. You can create poverty by allowing people to increase their income beyond someone else's income because poverty can always be relative. You can increase poverty by making it harder to get a job in the first place. There are so many reasons that have nothing with economics but politics. Whether the coin flip game increases poverty or not is also purely about politics. If the one lucky guy cooperates with all the other players then everyone is better off. That cooperation can be implemented as a government policy.

asianbison 6y ago
After you say "That's an area of politics" you give two economic theories that reason poverty's production. Is poverty an indicator of a better economy? Do the poor need to exist in better economies? What makes an economy better in the first place? These are all questions studied by economists and all influence this "should poor exist" question. There is no reason to qualify economic questions by saying they're political; they just coincide and that is all.

gtsop 6y ago

I find varoufakis to be a very unrrliable source of information. Full of falacies and contradictions. So let's fix this statement and get on with our lives: Economics as practiced by most contemporary analysts isn't a science because they don't even try to see it as a science

nix23 6y ago

>Anyone who says otherwise is trying to convince you why the poor should exist. That's an easy one, because others can have have much more then, no convincing needed.

tim333 6y ago

Well, it's a 'social science': >the branch of science devoted to the study of societies and the relationships among individuals within those societies. (wikipedia) Which coming from a physics background I think of as not a proper science but lots of people study that stuff and you can get some results out of it. I think people get in trouble with economics if they start thinking it's an exact science like physics rather than a guess at what a bunch of people will do.