Economics: Science or Cult?

Can I watch?
There are people with opinions about Economics that can’t spell it and get all emotional and non-rational. Because it is money and they feel they don’t have enough and can’t control their money.

It is science.

Interesting question. My understanding is that much of economic theory can be applied to the real world. Keynesian economics, which in the current economic crisis is unfortunately largely being ignored, has shown itself to work from both theoretical and practical points of view. I don’t know why Paul Krugman is about the only major political economist who is preaching against austerity. The Europeans have tried it and are now experiencing a double dip recession.

The question also remains why economists are so awful in their predictions. Why did conventional economists not see the current housing bubble and resulting recession coming?

Pseudoscience at best. Even wheather forecasts are more accurate.
My guess is the utter uselessness of economics stems from economists relying too much on idealised models that ignore the irrationality, greed, and cheating nature of humans. E.g. the “Invisible hand of the free market”.

Smart people consider it somewhere between art and science. Uber-conservatives consider it a religion.

Too many moving parts. You can look back at history and support for almost any economic theory. The problem is you can also look back and disprove any economic theory. Hell, economists were predicting the housing bust since the early 1990s. But it just kept growing and they just kept predicting a bust. When it did bust, you have some screaming “I predicted the bust” and of course that proves thier economic theory.

If you want to prove that spending stimulates the economy, you can look at virtually any recession and show that spending continued to rise and that proves spending fixed or at least helped the recovery. Of course you can also look at any period, recession or not, and see that spending continued to rise so how does that prove anything. We go into and out of recessions with increased spending. Hell, Bush spent like a drunken sailor and we still went into recession. But if your a keynesian, it is spending that will bring us out.

The truth is there is way too much ideology involved to gain any clear insight. Economists or not. It’s the old offer your solution, then find facts to back it up.

Has anyone considered the people who understand it or have some comprehension of the matter are using it secure their own profit?

Has any one read Michael Lewis? I seem to remember there were articles specifically about the housing prior to the crisis. No one heeded them, they were too busy making money.

I am no where near an economist, and ideas and theories usually make more sense on paper. However I think the issue we are facing was caused by greed, lack of foresight and complexity.

Most people don’t know the difference. Sad, isn’t it.

Economics can certainly be a rigorous discipline. And I think if psychology and sociology count as “sciences,” then economics certainly should as well.

Unfortunately, there seems to be less focus on peer review, accountability, and consensus in economics than in other scientific fields. Many economists are simply political hacks in a way that does not characterize other scientific branches. There is an entire branch of economics, taken as orthodoxy by most people in the GOP, that is based on made-up a priori assumptions and is hostile to using models, statistics or evidence.

So I’d call that particular branch of economics a pseudoscience, but I wouldn’t tar legitimate branches of economics with that label. Many economists have worked very hard to come up with very rigorous models that accurately predict economic behavior. That knowledge is incredibly useful, and rejecting the whole discipline as a “cult” seems just as stupid as the know-nothings who claim that “evolution is just another kind of religion.”

There are scientists in economics and then there are those who aren’t really scientists. However, science is a method that can be applied to the study of economics. That doesn’t mean that there aren’t people who have beliefs—even cultish beliefs about economics. Over time, the beliefs that can’t be supported by scientific evidence will die out. But it will take time.

Both. Here’s why.

There are economists who treat Economics like a science: they observe, look at natural experiments, compare hypothesis to data and see what went right or wrong, and if they were wrong, figure out why and change their hypothesis, learning all the time. These economists are why it’s a science.

Then there are “economists” who say that Economics is too big and complex to be ultimately knowable. These folks come up with economic ideas that they treat as ideology, and don’t seem too bothered to go back and analyze what went right or wrong when their ideas are tested in natural experiments. They know the way it “should” turn out, and either ignore evidence of wrong-headedness, or explain it away. These people are why some consider Economics to be a cult.

The key is to choose wisely, and follow the ones that are most often right, or at least willing to learn.

As with other social sciences, economic models have been validated enough to be taken seriously but wrong enough to be regarded as unreliable. Surely a heavily mathematical theory is more science than cult, however, among the actual economists, most of whom are sober scientists. “Cult” implies blind obedience to dogmatic authority – hardly the usual picture of academic science, where individuals compete to provide better explanations of observations than their peers can.

It will be a science when fully understood, but it is an extremely complex dynamical system with a huge range of strange attractors, making absolute predictability as difficult as long-range weather forecasting. That said, few outside partisan climate-change deniers would claim that weather is not subject to the laws of nature; i.e., science. When all the forces are clearly understood, both weather and economic forecasting become sciences with great predictive power. What then happens to financial markets that currently gain much of their activity from the feel of a high-stakes gambling game?

Are people predicable enough to be able to make assumptions about, and to predict,their actions in given situations? If so, does the individuals social environment or belief system affect said actions?

A science, when apparent truth isn’t too inconvenient.

@rojo The actions of a single person are bewilderingly difficult to predict. Curiously, the actions of large groups of people are easier to foretell.

Sometimes, people can be predictable in their irrationality as well. I highly recommend Dan Ariely’s book Predictably Irrational for anyone interested.

@laureth fascinating. I’ve added it to my to-read list.

And for those who don’t like to read much, Dan Ariely has done a few TED talks. http://www.ted.com/search?q=Dan+Ariely

Economics is one of the “fuzzy sciences” like anthropology, sociology, psychology perhaps. Economics may not be as precise a field as chemistry, physics or biology, the hard sciences, but it not simply a “cult” in my opinion. When you study activities that involve human behavior and systems designed by humans, these systems simply are not really governed by the laws of nature. Economics is not hard science, like chemistry or physics but it’s not voodoo and magic either.

Science or cult is not an appropriate or valid distinction when discussing or evaluating the field of economics, in my opinion.