Consensus Does Not Make a Science

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,

  1. 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;
  2. 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.

7 thoughts on “Consensus Does Not Make a Science

  1. Joel Freeman

    The highest ranked comment on Chetty’s article says:

    “If economics is a science, then why are we still debating austerity versus Keynesian stimulus spending? After all, isn’t it clear that the New Deal and eventually the war effort lifted us out of the Great Depression?”

    Again, this is the highest rated comment. Those who aspire to objective truth can stomach the notion that disagreement is, in fact, a sign of scholarly progress. That lack of consensus is intellectually healthy. Many economists can accept this (although apparently Krugman and many important individuals in the field have a hard time accepting this).

    But you still have to figure out a way to deal with the general public. The models advanced by economists aren’t just abstract models, they are used as justification for policies that affect the lives of millions. What’s the right way to make sense of this? How do you balance A) the pursuit of truth with B) the public’s desire for explanations of their economic suffering? I think economists should be troubled by this.

    Reply
    1. JCatalan

      Absolutely, and I think the effort made by people like Hayek and, more recently, Sowell in questioning the role intellectuals make for themselves as guiders of policy is very important and should be more widely recognized.

      Reply
  2. JosephFetz

    “Policy-making is not economics.”

    This is the real point, and one that most economists seem to always forget.

    Reply
  3. jjwayne

    I found many discussions whether economics is a science is totally missed the point.

    You can talk about whether a peach is ripe or not all day long. To find out the truth, you just have to taste it!

    If economics is not a science, why don’t we make it a science?

    Economics does not have immutable laws like physics. Just create physics laws of social science, please check out

    http://econpapers.repec.org/paper/pramprapa/47811.htm

    Economics does not have a universal mathematical framework like Maxwell’s Equations for electromagnetism. Just create a fundamental equation of economics, please check out

    http://econpapers.repec.org/paper/pramprapa/50695.htm

    Your time will be much better spent researching these papers than senseless philosophical debates.

    Reply
    1. Scott Gaff

      The problem with that article, the author isnt as interested in science as he is in the holistic approach to economics, viz, scientism. To paraphrase Immanuel Kant, objects aren’t transcendent but we treat them as though they are. To be a universal law of economics the law has to be free from history, biology, psychology, institutions, paradigms, which the pure categories of Praxeology already accounts for.

      Reply
  4. Scott Gaff

    That is very true in the natural sciences. Physicists seem to be the crudest of Platonists (Feynman, RIP), where only numbers are real. Of course Plato didnt really believe that, but his thoughts were so convoluted and speculative, who knows what he believed? The best Understanding of Plato’s “relativism” comes from an article i read in which the writer suggested we consider his subjectivism in terms of Paradigms, which i think most modern Platonists already do, even if they use autonomy instead. But yes, our perceptions are a “whole” of culture, genetics, and rationalism, which can be broken down into further deductions as to what exactly we mean by culture, and where things like language fits in (hint: theres no natiral language that’ll improve our communication) .

    Back on point. Physicists believe only numbers are objectively real. If we delve into the subject, there are no constants in Relativity, but they work good enough for their purposes. Science is never about questions or ontological certainty. It’s about self-discovery. Creativity is more important to science than “facts,” and the best scientists have all basically thrown their textbooks out the window. Unless you talk to a New Atheist, who will tell you science is quoting only the sources you want to be “Science” and adding zilch to our Understanding.

    Reply

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