I’ve been too busy with big projects to surf the webz recently. But I just saw this.
Bumping it again. Starting with the definitional point first.
I don’t particularly like the Argument From Connotation.
Is economics a [POSITIVE CONNOTATION WORD]?
The answer to this question normally has nothing to do with definitions. It’s based entirely on the ideological predispositions of the speaker. Some of the worst economists in the world will answer “yes” to this question, and they will natter on about “Economic [POSITIVE CONNOTATION WORD]” as if they raise the status of the discipline by talking about it as a neighbor to physics and chemistry.
Likewise, people who like to cite Marx approvingly will tend to answer “no”. They don’t want [POSITIVE CONNOTATION WORD] to be applied to the demon field. (I’ve yet to encounter such a person in the wild who has even read an intro econ textbook, or could pass an intro exam, but there it is. They don’t actually know anything about the field, but that doesn’t lessen their belief that [POSITIVE CONNOTATION WORD] doesn’t apply to economics.)
We can rephrase without the [POSITIVE CONNOTATION WORD] and get a more useful answer to a more precisely stated question.
Is economics a relatively systematic attempt to understand a certain slice of the world, using real-world empirical data and formal modeling techniques?
Yes. (Obviously.)
Is economics a relatively good systematic attempt to understand a certain slice of the world, using real-world empirical data and formal modeling techniques?
Well… Personally, I would argue “yes” to this question, as long as you slice finely enough. You can slide pretty quickly from a context where the regular tools are good and proper and useful, to a context where shit goes terribly wrong. But really? The main problem here is the discipline vs the people. I think most reasonably literate people would benefit from reading a solid intro Price Theory text, e.g. David Friedman’s Hidden Order, or even his Price Theory, An Intermediate Text. (The “intermediate” is a matter of sophistication, not a matter of prerequisite. Someone reasonably intelligent with no prior exposure to the field could read it without any problem, as long as they put in the work.)
Economics has all sorts of useful stuff to say.
But that doesn’t mean most economists are very good at economics. My rough guess is that only 20% of macroeconomists have a solid handle on monetary macroeconomics. (I say this as a monetary macroeconomist.) Do the majority of the disciples fail their discipline? Yes. Is that a failure of the discipline itself? …eh… The fraction of people who have a solid handle on monetary macroeconomics outside of the economics profession is a small fraction of a single percent. 20% isn’t that bad, when compared to the rest of the population.
You’re a helluva lot more likely to find someone who knows what they’re talking about if you’re on the inside. But you still have to look around.
It’s up to an given individual whether they think any “social science” qualifies for [POSITIVE CONNOTATION WORD].
I tend to think the answer is “yes” to all of them. The social sciences are sciences. But most social scientists – including most economists – tend to be extremely bad at what they try to do. Society is complicated. People are ideological machines who prefer their pet beliefs to looking impartially at the world. Just the way it is.
- Marginal value diminishes.
- Marginal cost eventually increases.
- People spend the majority of their actions to improve their own personal welfare, or that of their family or closest friends.
- People tend to act relatively sensibly to achieve their goals in the majority of everyday contexts. For example, no-one goes to the grocery store for a gallon of milk and comes home with 20 gallons.
You can derive a large chunk of economics from those four ideas.
The first three points are relatively obvious.
This last point is less so. Good decision-making is taken for granted by almost everyone, because of how awful the exceptions are. But it’s still fairly clear when you consider it. People can find a thousand examples from their own everyday life of little things they (and almost everyone else) accomplish successfully every single day. These things are “trivial”, but the only reason they’re trivial is that humans are relatively clever at solving many kinds of tasks.
But the exceptions to sensible behavior are more likely to capture our interest, because of how horrific the consequences of the absurd decisions can be.
These tend to be non-everyday contexts. People are bad at making a decision today that will have consequences in ten years. People are bad at abstract problems. People are bad at situations they don’t encounter very often. Essentially all of the worst decisions that people make (take voting for [TERRIBLE CANDIDATE] as an obvious example) fall into one or more of these categories.
As economics shifts its focus into these more difficult categories, it becomes significantly more difficult to do good analysis. But these are the contexts that interest people the most. Economics is the worst in some of the places where people look to it to work best. Disappointment is inevitable in such cases.
This causes many people to miss other important contexts where econ works pretty well.