Pretense of Knowledge

Hear! Hear!

"The bottom line is that we should expect less of economists."

We should expect less in their abilities to predict future events, persuasively explain past events, and engage in fruitful interventions. But we should expect far MORE than we get in their abilities to reason rationally about the expected effects of human behavior, speculate about unintended consequences of interventions, and identify unseen costs.

Economists today don't care to think about economics. They care only about learning and manipulating keynesiac aggregate models. As such, they shouldn't even be called economists. They are little more than consulting mathematicians at the service of the ghost of Keynes.

There are two and only two forms of economics.
1. Barter- The people's system, simple and easy to understand, you cannot be cheated as long as you know basic math, weights and measures, Words set to specific definition.

2. The "fractional reserve" system of credit. 100 year cycle created to enrich a specific few at the expense of everyone else. It is a great swindle in that the do gooders and slapdashers think they have it figured out, then write books about it after they finally figure out they are screwed and want to save their asses and look good to the rest of the unsuspecting population.
The name of this game is, if you can't dazzle them with brilliance then baffle them with bull shi-.... Graphs, pie charts, fabricated figures, changes in word definitions, rivisions and counter revisions, Hegelian dialectic. Perverted laws. Should the fingers start to point out the culprits their economists kinda throw the deck of cards in the air so YOU can play 52 pick up as the days waste away along with YOUR Life. YOU never get the days of YOUR Life returned. Psychologial warfare, stress warfare, put all the members of your family to work to pay the bills, no vacations and STILL loose the farm. Yet you watch ALL of those in government enjoy the best of retirement, best of vacations, ALLL the hollidays "off" ON YOUR BACK.
Those in government CANNOT repair nor do they want to repair the ills of society because they DO NOT want to give up their job. I don't care what job it is, all of them have control of something or someone, in commerce and or corporations or and both.

Over 186,000 IRS agents tells you something about the fractional system of economics by itself. They, Internal Revenue System(not service) is the collection agency for that swindle system. No man friendly to his nation would EVER foist on the people an excise on an inland impost, which is what our income tax is. A tax that would create a nation of liers, the government cheating and lying to the people and the the people lying and cheating government. ONLY government and bankers win, they are the HOUSE and the HOUSE always wins in the end. This game of theirs started in 1692 they are damn good at it, yes I said 1692. DON'T PLAY THEIR GAME.
You'll try everything, talk and talk, from schemes to code changes to remedy the built in nightmares, they will ALL FAIL YOU. The Federal Reserve(aka Bank of england) the greatesssst show on Earth.

Charles Brezina
antifederalist
antifed@comcast.net

How do you reason that the cycle is 100 years?

A mathematician or physicist once said "whomever thinks he is dealing with random numbers, is living in sin." I think the economic specific corollary is the fellow who leads with "all other things being equall..." I think this is in line with Indianajim and others?

DJLESVIC apparently does not believe in patterns beyond confines, that math is not universal, I find his "not so" words and econ/stat reasoning to be, frankly hogwash

I do believe that math is universal, but not all pervading It is useful everywhere but not in everything, in Bangladesh as well as Brooklyn, but not in economics as well as physics.

If you can give me a single example of mathematics in economics, I will withdraw from the subject altogether and confine myself ever after to cutting out paper dolls of Lord Keynes and Count Kuehn.

I have to second Walt's response. Math is used every nanosecond of every day for the purpose of price discovery. Regardless of the fact that the underlying mechanisms are emotional, they can't be quantified without math.

Reply to both Walt and John,

Walt, Sorry you're out of a job now. Don't be down on yourself. You're a good man, fersure!

Here is an excerpt from A Declaration of Economics, by Guess Who, and a link to the whole ugly mess.

“All of the talk of mathematics in economics confuses the passing data of econometrics with the eternal truths of economics. Since there is none of the passing data in the eternal truths, there are no quantities, and no mathematics.

However essential to econometrics, it is irrelevant to economics, and, its only effect, to obscure it.”

See http://econotrashtalk.org/#A_Declaration_of_Eco...

Walt asked,

"Do you consider the process of choosing stocks and investments part of economics?"

No, I do not. It is a part of Business Management.

The difference is this. Economics proper is about what never changes, the laws of economics. Bus Mngmnt is about what constantly changes, the passing data of economics. While economics contributes to Bus Mngmnt, Bus Mngmnt contributes nothing to economics. For you cannot derive that which never changes, the laws of economics, from that which constantly changes, the data of economics.

Statistics is history, and so is forecasting, in a sense, the "history" of the future, but always, of a particular time and place, and not, like the laws, of all times and places.

John wrote,

"Math is used every nanosecond of every day for the purpose of price discovery."

Having observed that the price of potatoes in the corner grocery store this morning was $2/lb., would you say then that you had observed anything more than a unique historical event, that you had observed a law of economics, that the price of potatoes would always and everywhere be $2/lb.?

Hey, but you're thinking about economics.

God bless yas.

If I observe that the potato price is increasing at a logorithmic rate everytime I go shopping, an underlying economic principle is revealed. The same is true if I observe correlations between price and spud supply.

Similar relationships exist between math and physics. So, yes, the math component can be seen as a mere tool to observe an otherwise invisible "law", such as fear tends to push down a particular price. But that's a semantic issue and it applies to physics just the same.

I'm not an economist, but your characterization of economics as purely theoretical seems overly narrow and simplified. Where does empiricism enter into it? When is the theory put to a test?

- John (I registered since that last post)

Null and Void,

You wrote,

"If I observe that the potato price is increasing at a logorithmic rate everytime I go shopping, an underlying economic principle is revealed."

What is it?

You asked where empiricism enters into economics.

“Empirical fact enters into the theory, but only at the level of basic axioms,” such as the disutility of labor, the variety or resources, and the goods on the shelves. But the theory itself is “a priori to all other historical facts.”
Rothbard, America’s Great Depression, P 81 and P 305, note 4

You asked when a theory is put to a real test.

The only real test of an economic theory is the test of reason.

I'm new here and didn't know who (what) you are, but after a little research, I do now. My intention is to learn about economics and I find you unsuitable for my purpose. Statements such as "Economics is the study of action itself and not the motivations that lead to it" indicates for too narrow of a view to be instructive. I need to start with a survey. And your unprovoked insult reveals an emotional problem that would get in the way as well.

I did find your non-economic aphorisms interesting versions of some common perceptions that we both share. Perhaps I'll revisit your economic material in the future, after I gain a better understanding of the subject. Economics as performance art.

Void,

About the "insults," as you may have noticed, the title of my web site is Econotrashtalk. Don't mean any harm, but do like to talk that trash.

My definition of economics as the study of action itself is right out of Mises himself, the greatest economist of the 20th Century. His strict and narrow definitions of economics chafed on a lot of other people as well, but clear distinctions are essential to clear thinking. Distinguishing economics from other subjects does not prevent you from studying the other subjects, just from muddying the waters.

Surely there is a science of action itself apart from its motivations. The question of the motivation for a given action is one thing, and the question of whether the means chosen for the attainment of the end work or not is another. Why would you want to confuse the two?

Our core views are antithetical to each other. Where you strive for esoterica, I strive for consilience. If I where to study Mises on action, I would feel compelled to factor the result with motivation, and that result with social policy, and then with another...ad infinitum.

Complexity (expressed by you as "confusion") is the foremost challenge to the advance of intelligence, and specialization is the most powerful tool we have to dismantle it. Therefore, Mises (and you) have value, but ONLY when the fruits of that specialization are reintegrated into the whole. Individual action is meaningless outside of the context of its aggregated effect. You don't have to be the one to attempt the reintegration. You don't even need to be aware of the bigger picture. Someone else will eventually come along and pick up the task. What's fascinating, is that you rail against that part of the process that makes your contributions useful. A sort of intellectual suicide.

Trash talk, performance art. Same thing.

Nellie,

You were right in the first place. I am "unsuitable" for your purposes.

Good luck with them.

Typo above.

Where I said variety or resources, I mean variety of resources.

Do you consider the process of choosing stocks and investments part of
economics? If so, then the economics Nobel was properly given, at least on
that criteria, when a new way of "quantifying risk" was selected for the
prize. Of course, you must admit that the terrain did not conform to what
the map promised. But that is "psychology" for the greater part...the
desire to believe what sounds good to ones desires.

At a very primitive level, without sinmple math, there is no statistical
data for macro-econ. Even GDP per employment hours.....

Perhaps you have a job, which I do not. Thus you may have skin in the game
as in tied to a particular perspective. (I know that academics often go far
far astray from such issues, just as politicians) I on the otherhand am a
generalist who will study anything (almost) and who has been known to wake
up fretting over prime numbers in the wee small, as well as the juncture of
hormones and social behavior


Thanks for the note. This is a most fascinating conversation going on.
Just discovered this blog while trying to contact the WSJ article author.

Did I misinterpret you?

You actually said that I apparently did not believe that math is not universal. A double negative. But I took it as a single negative, that I did not believe that math was universal.

And, by the way, for the example of "mathematics" in economics, prepare yourselves for the usual onslaught of meaningless symbols.

We'll have fun with that.

While I agree in general, it is obvious that we do have enough knowledge to dismiss certain economic theories that are very popular in the current environment.

For example, we know that Keynesian economics has never worked in the real world and that any nation that chose to have government bureaucrats meddle in the economy has created more damage than good. As such, we need to dismiss Keynesians as cranks, just as modern biologists have done for the proponents of falsified theories.

It would also help if there were a way to correct the errors of judgement made by the individuals award the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel. They have done more damage to capitalism than Kar Marx.

For anyone interested in the origins of the divergence of "empirical" and "analytical" social science, how social sciences relate to biology, and the influence of politics on both: http://www.drorism.com/blog/2010/02/politics-ec...

Happy to hear your thoughts.

Economics is philosophy. And that is not meant to be derisive.

Most of the economics for public consumption is just tactical sophistry in defense of the self-interested goals handed down by some political boss.

"There were Nobel Laureates who thought the original stimulus package should have been twice as big."

Has someone had a revelation?

How did a man like George Soros become so incredibly rich? Obviously, he knew something and was able to act on that information to make highly profitable transactions. People also become rich by dumb luck if they pick the winning lottery ticket numbers. I think to say that economics is not a predictive science because of the number of variables to consider or the complexity of the situation is a cop out. We try to make sense out of the world around us every day. Usually, it is foolish, or bad people with inordinate power who corrupt the world around us, like a Hitler for example, or a Bush. I'm pessimistic about humans ever resolving major issues, because I believe that human folly will ruin things for everybody and for posterity. Humans are basically a loser species that will take down all the other species with it sooner or later.

Russ - Nice Job. I think that can be said for a host of fields that use statistics and mathematical modeling to simulate or tease relationships from the real world.

Early in my career I ran into older managers who thought they could save money by using computers to model a real world system to replace the seasoned judgment of experienced engineers with much less experienced computer operators. It failed, but not without a fair amount of money and time invested in the project. I committed a CLM trying to explain why it wouldn't work. It took five years for the company to come around to my thinking.

To them, computers were a new toy and they didn't quite understand the limitations. Math and statistics seems to be still be treated as economists' new toys.

Don - Is there a word missing between "Russ" and "this"?

BTW, it's amazing to me how much Spam mail I get. At least 100+ a day. GMail spam folder is a god-send.

The part that is missing is the end of the frog analogy. Just because rainfall goes up in a particular part of the rain forest and it affects the frogs in a certain way doesn't mean we can or should create a solution to that problem. Nature will run it's course.

It's funny how some economists on both ends of the left-right spectrum have pointed to biology as the better analogy for economics. See Robert Frank.

I agree with the biology analogy. I would again recommend interviewing for EconTalk someone who treats the economy as a complex adaptive system, like GMU's own Robert Axtell.

This a response to both Dave and Dr T, immediately above him.

Dave,

Let's not get carried away with the analogy to biology. It only begins to illustrate the complexity of human action. For there is an element in it lacking in biology. Intellgience. Plants and animals react. Man acts. He doesn't just respond to his environment and give in to his impulses, but analyzes, grades, and chooses among alternatives. Economics, a science of purpose and choice, is uniquely human.

Dr T,

You said, economics deals with complex issues. But it does so by simplifying them, analyzing a single factor of change in isolation from all others on the assumption that they remain constant.

You said that the issues of economics can be studies mathematically and statistically.

Not so. Statistics are history and economics is theory. There are no statistics in economics, and, without statistics, no mathematics.



You wrote,

"The inability to perform realistic economic experiments (Let's double the money supply and observe the outcomes!) always will prevent economics from becoming a hard science."

That's right, up to a point. It prevents economics from being an empirical science, but there is nothing harder than the "logic" of economics.

Frank writes:
"By calling our attention to the conflict between individual and group interest, Darwin has identified the rationale for much of the regulation we observe in modern societies — including steroid bans in sports, safety and hours regulation in the workplace, product safety standards and the myriad restrictions typically imposed on the financial sector."

Frank, in my view pushes too far with the metaphor; he clearly believes that central planners, regulars and designers are often the great hope for humanity (we are so much like elk; not). I wonder if he has any appreciation for Hayek's wisdom: "The purpose of economics is to explain to man how little he knows about what he imagines he can design"?

Pre-dating Frank see:Hirschleifer, J. (1977). “Economics from a biological viewpoint,” Journal of Law and Economics XX (1): 1-52.

I have never understood why this labeling issue is so important and (seemingly) so difficult.

There are hard sciences such as physics, chemistry, geology, and general biology. There are soft sciences that relate to human or animal behaviors such as psychology, anthropology, and sociology. Economics is the branch of sociology that studies human interactions related to the exchanges of goods and services.

Modern economics deals with complex issues such as international currency exchanges, corporate ownership exchanges via stocks, interrelationships among raw goods and manufactured goods, interrelations between money supply and relative monetary values, etc. These can be studied mathematically and statistically and can be modeled using formulas or neural networks or other mechanisms. Because numbers, computers, and models abound in modern economics, some people mistaken believe that economics is now a hard science that allows for testable predictions similar to the predictions of heat production during the acidification of a vat of chemicals. However, regardless of the many formulas and models, economics does not qualify as a hard science. The outcomes of new economic factors cannot be calculated but only estimated. The inability to perform realistic economic experiments (Let's double the money supply and observe the outcomes!) always will prevent economics from becoming a hard science.

In discussing the current Administration's drive toward "energy independence", Art Laffer describes the current Secretary of Energy, Professor Steven Chu, who aped the administation's goal of energy independence, as follows:

"a Ph.D. physicist with a Nobel Laureate and formerly a professor and chairman of the department of physics at Stanford University . . . This man has a resume a mile long. Nobody is more qualified in or more highly recognized in his or her chosen field than Professor Chu. . . . When Professor Chu took the podium he reiterated the importance of energy independence for America and said that this administration would use science, and that he, by example, was literally a man of science. . . Whenever people say that they want the United States to be energy independent they demonstrate that they simply don't understand Econ 1."

Laffer is, as usual, onto something important; in this case something that Dr. T's post obscures. So called "hard scientists" who don't know Econ 1 are dangerous stewards of social welfare; do not make climate czars or energy czars of such unless you love poverty and all the vulnerabilities that go with that.

The Political Dictionary: Macroeconomics [excerpt]:

The study of overall statistics about income, debt, production, and employment. You would think that statistics are dull, but macro economics is a center of intellectual ferment. Motto: "We just don't know, but we are willing to guess". Critics say that it is history confused by mathematics, or mathematics splattered by history.

Macroeconomics is noted for the gigantic cost of the occasional government experiments carried out with fanfare in times of crisis. Experiments in good times are never advertised or acknowledged, for fear of being held responsible for yet again ruining a good thing.

Russ writes: "We should face the evidence that we are no better today at predicting tomorrow than we were yesterday. Eighty years after the Great Depression we still argue about what caused it and why it ended."

But these are such largely different things (in the two sentences), that I wonder why Russ placed them in consecutive sentences:

Regarding Russ's second sentence:

Some do argue as Russ says about what caused and ended the Great Depression, but economists who are interested in evidentiary based discussion have a much easier time, obviously, today than eighty years ago. The economic historians and Austrians, for example, have done much to clarify what is known about that era. That is, the underlying causes of this past event are MUCH better know and by many more than at the moments they were unfolding.

Regarding Russ's first sentence:
Predicting a future economic depression is entirely another kettle of fish.

Sounds like Russ needs to start a new organization, Economists Anonymous. Each meeting could begin with Russ stepping to the podium and saying "I'm Russ Roberts, and I'm an economist."

Even though I myself am growing tired of the economics<-->climate science equivalence, I have to point out how aptly this describes most sciences, and how those with a will to political power tends to impute more certitude to every science (sociology, psychology, climate science, economics) that can be used to bolster the need for them to do something.

Based on my recollections of your positions in the past, I was expecting to find fault with your piece. Couldn't do it. It was absolutely wonderful all throughout.

I didn't read the full article because I don't subscribe to the WSJ, but I think I get the point Russ makes from his excellent podcast on the same subject. I appreciate his genuine humility and his wisdom in shedding the illusion of control. Its somewhat of a rarity amongst his peers, from my layman's perspective.

Also, the article seems to take a minute step closer to embracing the discipline of evolutionary theory. As I read and listen to the podcasts, and the various economic mechanisms are described, I'm constantly reminded of the many parallel mechanisms that exist in evolutionary theory. And I'm curious as to why these parallels are never mentioned, or better yet, incorporated into economic theory and modeling. The obvious one is the ever increasing complexity, not only in the organisim's interaction with its environment, but also of the biological unit's morphology. Comparative Advantage and Adaptation/Exaptation, Markets and Fitness Landscapes, Regulation and Intentionalism, etc. It all seems seamless (heh) to me. Why is the economic libertarian reluctant to evoke Natural Selection when he/she talks of the beneficial demise of this or that business practice? I suspect that its because of the moral baggage that has to be toted when touting these principles, and they're reluctant to take on even more. Natural Selection has zero empathy or anthropomorphic qualities. Whatever the reason, I think its unfortunate that they don't make use of these tools for complex systems analysis.

Hayek covered this really well in the opening of "The Fatal Conceit". Essentially he explained market theory as a result of cultural evolutionary trends, rather than appealing to a Lockean natural rights theory.

Interestingly, he didn't say that capitalism was right or wrong just as a biologist wouldn't claim opposable thumbs were "right or wrong". However, he did justify capitalism as basically a necessary precondition for the highly developed and rich world in which we now live, and blasted holes in statist claims that they can do better with centrally planned systems.

Admitting you don't have all the answers? Geez, you'll never get handed the reins of power with that attitude.

On one hand, yes, the admission of ignorance is evidence of wisdom. On the other hand, in reality, I think I'll get on the plane with the pilot who says, "I know how to steer this thing." If the pre-flight announcment features quotes from Hayek: Get me off of this thing!

Unfortunately, there is no practical way for a layman to know which "experts" are full of shit.

Your analogy of a pilot saying they know how to fly a plane is flawed, as are most comparisons of economics to physics.

Try this one. Would you invest your money in a punter who claimed they were capable of successfully picking numbers on a roulette wheel? Or would you put your faith in the analyst who said they could estimate your expected losses.

I think I expressed myself poorly.

The original comment was:
"Geez, you'll never get handed the reins of power with that attitude." So, we know the point that he's making here...yet, it doesn't apply to every situation...and this is the trouble. In economics (or psychiatry or stock trading) this might be the correct thought: the person claiming ignorance is, in fact, the one that knows what he/she is talking about and should be given responsibility. The problem is that if you are a layman, you don't know if the situation is like economics or physics. How do you know, if you don't know?

So, it wasn't a comparision exactly...the incongruence between Hayek's type of knowledge and a pilot's type of knowledge was intentional...so I think we agree. Ignorance is okay in some areas, but not others.

To your question: I think N.N. Taleb would say that there was less danger in the claims with the roulette wheel, because it's obvious that it should be avoided.

Is there a version that can be accessed without WSJ subscription?

Try gregworrel's suggestion.

There is no free lunch.

Or free beer.

Please how can I read his article as a non-subscriber to the WSJ? Thanks in advance. :)

If you just cut and paste the title of the article into Google, a link to the full article will show up.

Maybe not for long...

http://news.cnet.com/8301-1023_3-10461255-93.html

@gregworrel : thank you (thought it was more difficult than that...).

Klein has a great article seeking to find an identity (and a moniker) for like-minded economists here.

Amazingly, in the responses to the article, Ed Prescott (here), in response to the question "how might you characterize yourself as an economist?" answered:

I am an economist economist. I am dedicated to making economics a hard science. Macro economics is now a hard science.

I'm sure a Nobel winner has to mean something more profound than how a lowly-econ-grad-student such as I read that response: I mean, in what possible world, especially given the state of macro in the past couple years, could macro be a hard science?...

...or maybe that's just why I'm glad I'm at GMU.

I have always liked Mises' characterization of economics as a branch of praxeology - the study of human action.

Economics, as a field of study, need make no apologies. Its misuse by certain practitioners is not the fault of economics itself anymore than malpractice of law is the fault of the field of law. And it need not align itself with any other field of study in order to gain some measure of respectability.

Economics is rare in its combination of the scientific method and narrative inquiry. Some may say the mathematics used are too restrictive and unrealistic thus making such economic methods useless. I disagree. Simple models that can generate data that mimics real data can be very useful as tools of analysis. The problem, as always, is in the misapplication of the tools.

Economics is old, relative to the lifetime of a single human, but very young relative to the lifetime of other fields of inquiry. It is growing and by no means should anyone consider economics to be a mature field. Nevertheless, it has already yielded a great many insights regarding the behavior of humans and these achievements alone are enough to justify the presence of economics as its own "thing."

So it is not like physics or biology or anything else. Economics is exactly like economics.

Economics is a branch of human ecology--it needs specialists because big brains enable unique and peculiar relationships to form.

I'm not sure if you are arguing with Russ, but I see no inconsistency between specialization within economics and urgings to "be honest about what we know, what we don’t know and what we may never know."

I am not arguing with Russ. I could nit-pick on a few technicalities, but my position is very close to Russ's.

OK, just curious

Unfortunately, if Russ is right about the shortcomings (with which I agree) of economic prediction, who's going to save the world? This may bruise some fragile egos out there.

1) Shortcomings are ubiquitous in all creations of imperfect beings constrained by scarcity.

2) No one is going "save the world" if by that you mean create heaven on earth. This is what Thomas Sowell calls the tragic or constrained vision in his book "Intellectuals and Society": It is only those with utopian visions whose egos will be bruised by the statement that economic prediction, or theory, is imperfect. (I agree with two of your points: Russ is right, and his challenges to utopian visions do "bruise some fragile egos out there.")

Great article Russ. Hulsmann pointed out in QJAE 6.4 in his discussion on optimal monetary policy that:

"Honest new Keynesians acknowledge that their models are not a realistic representation of parts of the observed economy. They admit that their reasoning is based on stipulations and conventions of a more or less fictional and therefore arbitrary character. But they believe that economic science cannot do any better than that, whereas Austrians think they know a better approach. As a consequence, from an Austrian perspective, new Keynesian policy prescriptions do not exactly stand on the firm ground of science."

You've done an excellent job of reframing the same point to biology and emergence as opposed to other sciences, and then making the same point Hulsmann did re: being upfront about modeling the complexity and what it is and is not.

Well done and easily understood. I'll be passing this one along for a wider audience.

I would like to add to Russ´s words the work of James Buchanan: ¨What should economist do?¨. Great book which deals with many of these methodological aspects. (HT: Pete Boettke over at www.coordinationproblem.org)

Don't you mean "The Austrian Economists"? :-)

Russ wrote: " The economy is a complex system, our data are imperfect and our models inevitably fail to account for all the interactions."

Beyond this is, and amplifying what Russ wrote, is the much overlooked insight of Donald F. Gordon:

" . . . the essential point is the difference between theories using a large number of functions and those using one or two, since formal and mathematical reasoning is normally required when the number of relationships simultaneously being considered becomes large. As we have seen, even though each may be quite plausible, a combination of very many [relationships] will rarely be so [stable]. Consequently, it happens that the cases in which formal and mathematical reasoning is most likely to be required are precisely the cases in which, for other reasons, the validity of any conclusions is likely to be conjectural. It is frustrating but nevertheless true that, where mathematics is most likely to be useful, the theory is least likely to be valid, while, where the theory is most likely to be true, complex deduction is generally not needed. "

Gordon's insights were elevated in some circles in the 60s and 70s by way of his JPE paper being part of a popular readings book: Gordon, D. (1955; 1968). “Operational propositions in economic theory,” In, Readings in Microeconomics, (Edited by William Breit and Harold Hochman). New York: Holt, Rinehart, and Winston, Inc.

Unfortunately, the meteoric rise in the fashionability of mathematical complexity in economic theory from 1960 to present has directed resources in directions that are less and less likely to generate any operational propositions.

Good show chap!

Now let us gain some respectability and finally kill that bogus Austrian macro that is masquerading as real economics.

--Pingry

Still waiting for a comment from you that does not refer to the term "Austrian". What's your obsession? Why are you following the blog of some economists who wear "Austrian" masks?

Good article Russ; this might land you in the top five or ten of a certain economist's Nixonian Stupid list.

Here's a refutation of ecomometrics:

1. Econometrics is mathematical history.
2. Mathematics is a priori knowledge.
.:. 3. Econometrics is a priori history.
4. A priori history is a contradiction.
.:. 5. Econometrics is a contradiction.

Please don't propose this argument in public, because people will dismiss Russ's arguments by association.

Precisely - I've thought for a long time that the physics analogy is overwrought and that the biology analogy should be emphasized (which only makes sense anyway... when Jane Goodall studies the social systems of monkeys they call it "biology" - and aren't we just monkeys with bigger brains and better toys and tools?).

This also drives home the point about prediction problems and non-experimental empirical work that a lot of people claim disqualifies economics from being scientific. I don't know where this meme that experimentation is required for science got started, but it's wrong - and biologists are prime example of an often non-experimental empirical work (although of course other biologists are experimenal - and some economists for that matter!). Meteorologists are also always a good analogy of scientists who can only forecast so far into the future. Just because predictions aren't perfect doesn't mean predictions aren't legitimate. You have to bring your expectations for a forecast into line with the complexity of the system you're trying to understand.

One of my favorite pet peeves--humans are apes, not monkeys.

Also, the study of a social system of primates would accurately be called "sociology", rather than biology, regardless of the academic background of the researcher.

Economics as a branch of Sociology would be one approach.

From wikipedia: Sociology uses various methods of empirical investigation[2] and critical analysis[3] to develop and refine a body of knowledge and theory about human social activity, often with the goal of applying such knowledge to the pursuit of social welfare. Subject matter ranges from the micro level of agency and interaction to the macro level of systems and social structures.[4]

There's nothing wrong with calling the study of human behaviour "biology". Besides humans are classed as "Great Apes" with chimpanzees being our closest living relative (even if plenty of people act like monkey moots).

Professional economists would object to being classified under sociology. They are "practical mathematicians".

Aha - I stand corrected. I'd completely agree on econoimcs being a subset of sociology (although I think economics is more rigorous at the moment), but both can be fairly well classified as subsets of biology. I studied economics and sociology, so I have a soft spot for it - but it definitely has some hang-ups.

I'd completely agree on econoimcs being a subset of sociology (although I think economics is more rigorous at the moment)

I have no knowledge of the origin or evolution of sociology as a field of study but I think the opposite should be true -- sociology is a subset of economics. Isn't economics older than sociology?

Googling quickly, the Wikipedia entry on the history of sociology begins:

"Sociology emerged from enlightenment thought, shortly after the French Revolution, as a positivist science of society. Social analysis, however, has origins in the common stock of Western knowledge and necessarily pre-dates the field. Modern academic sociology arose as a reaction to modernity, capitalism, urbanization, rationalization, and secularization, bearing a particularly strong interest in the emergence of the modern nation state; its constituent institutions, its units of socialization, and its means of surveillance."

So academic sociology began because some academics didn't like Capitalism?

There's a joke that goes if you're a good economist in your next life you'll be reincarnated as an econometrician. If you're a poor economist you'll be reincarnated as a sociologist.

I don't see what choronology has to do with it. Could you explain? Sociology ostensibly studies a broader set of problems, which is what would justify thinking about economics as a subset of sociology. I think kurlos is just speculating here. Nobody is actually proposing rolling econ departments into sociology departments.

I also don't think you're thinking about this right if you think it's that "some academics didn't like capitalism". Sociology, as I've always understood it, emerged as an attempt to explain modernity - including the rise of industrialization and capitalism. Some liked capitalism and some didn't (the same can be said for early economists). Despite some strong prejudices today I think the discipline itself is value-neutral.