In my latest column in the Pittsburgh Tribune-Review I argue that economics is indeed a legitimate science. A slice (first emphasis added; second original):
Economics is a systematic way of thinking that improves our understanding, if not our ability to make specific predictions. The economist understands, for example, that raising the minimum wage makes low-skilled workers less profitable for employers to hire. Therefore, concludes the economist, the higher the minimum wage, the fewer and worse are the employment opportunities open to low-skilled workers.
The economist doesn’t predict that hiking the minimum wage will necessarily cause an actual increase in the rate of unemployment of low-skilled workers. Rather, he reasons more modestly by pointing out that hiking the minimum wage worsens the employment prospects of low-skilled workers compared to what those prospects would be without a higher minimum wage. The economist understands that a modern economy is an astonishingly complex, dynamic and huge system in which changes in one part often offset or mask changes in another part.
Consider a physicist standing on a beach and observing feathers floating in thin air. This physicist would not conclude from her observation that feathers are immune to gravity. The physicist understands that gravity works on feathers no less than on steel anvils, but that this effect can be masked by other forces, such as wind. So, too, does the economist, upon observing that a higher minimum wage is not followed by higher measured unemployment, not conclude that a higher minimum wage inflicts no harm on low-skilled workers.
The good economist, in short, sees with his reason that which is often invisible to his eyes.
And often invisible also, I here add, to his or her econometric tools – tools which can never capture, much leas measure accurately, the full range of the important and relevant details that are always changing in a modern market economy.
