1. I am not a big fan of Raj Chetty’s recent op-ed for the New York Times. It’s not that I think economics is not a science. It’s because I don’t think we should hold consensus as the ultimate standard by which to judge a science. This sounds bad, because there are people who adamantly stick to a belief, despite the mountain of evidence against it. I’m not one of these people (at least, I try not to be). But, I do recognize that the probability of getting everything right is very low, and that challenging established beliefs allows us to explore what we’ve missed.
2. In any case, Mark White has convinced me to care less about whether economics is really a science. His second point is gold,
If economists want to claim the status of Science in order to earn some badge of honor in objectivity, I’m afraid they’ll be disappointed. This is where the criticism of the Shiller/Fama Nobel is instructive: if I cared about whether economics is a science, I would take the dual nature of this award as a positive sign because it shows vibrant disagreement that science should emulate, not frown upon. (Nancy Folbre, writing today in The New York Times, disagrees.) Disagreement reflects criticism and skepticism and it spurs on further investigation. It shows that truth is never found but forever sought; we can approach it and approximate it, but we should never presume to “have” it, because when we think we’ve found truth, we stop questioning it and we grow too comfortable in our “knowledge.”
In his third point, he compares the social sciences to the natural sciences, suggesting that the former will never have the predictive ability of the latter. A lot of the topics that natural scientists look at are not heavily advertised in the media — they aren’t as glamorous as economics. But, natural scientists also study complex phenomena, and in these areas, just like with the social sciences, there’s very little predictive power. The objective becomes not to predict, but to understand. (This being said, there seems to be a layman/specialist miscommunication. Oftentimes, when economists use the term “predict,” they’re questioning whether the outcome illustrated by a model shows up in the data. But, the reason we care about it is not so that we can predict future events, but to know whether the model can explain reality.)
3. This Paul Krugman post on the topic is not very good,
- Policy-making is not economics. The task of the economist is not to make policy recommendations, it’s to explain some facet of the real world;
- That someone disagrees with some “established” result does not strip them of the title of scientist. I agree that there are people out there who never acknowledge the strength of opposing arguments, and that these people should lose credibility (or, at least, that the specific set of theory should lose credibility), but Krugman applies this rule of thumb much more loosely than it should be. I, for example, don’t challenge Stiglitz’ scientific credentials because he continues to peddle the line that misaligned CEO compensation was one cause of the financial crisis, despite the fact that much of the empirical literature disagrees.
4. In his op-ed, Chetty talks about several things the empirical literature agrees on. Krugman also acknowledges some of these areas. They know the literature much better than I do, but my experience is very different than theirs. Usually, I find that results in economics are much more disputed. Empirical studies are often criticized for problems in the method, authors’ interpretations of the evidence are often questioned, and alternative methods provide alternative results. So, when someone tells me that such and such has been, for all intents and purposes, empirically proven, I’m skeptical, because in my experience that is almost never the case.