Sunday, October 09, 2011

Economics: Not A Real Science

I've long maintained that economics is not a real science, rather it is merely ideology (or maybe a really, really lame religion, if you prefer) masking as science. There are several reasons for this observation.  For example, competing economic systems, like Marxism and Capitalism, are consistent within their own scheme, yet contradictory with each other.  In a real science, like chemistry, this would be analogous to having a different reaction when combining bleach and ammonia, depending upon whom mixed it.  Also, in no real science, could a practitioner get their predictions so completely wrong and not be completely discredited.  But not economics!  Compare and contrast the recent announcement of neutrinos being measured to travel the faster than light and the reluctance of some physicists to even be associated with the results, compared to the likes of Greenspan, who is incredibly still taken seriously by some.  This is more reminiscent of an ideology, where if the figurehead is proven wrong, just changes the "facts" to match.  This reminds me of the the Soviet Union banning quantum research, as it contradicted the dialectic, until the development of the atomic bombed showed that it was undeniably real.  Other than data collection, which is horribly skewed in certain areas such as unemployment data, economics has very little to offer that could be compared to a real science.

However, I am willing to cut a little slack toward some economists that are keenly aware of deficiencies in economics.   John Kay's reminder to fellow economists that the territory is not the map, regarding the innate flaws of computer modeling of complex systems, is one such example.  (Indeed, it's a reminder that real scientists could use from time to time as well.)  I also follow construction economics, and find that most of the economists involved are worth taking seriously.  (Probably because the construction industry that bankrolls their research would not stand for anything that hurt their business--unlike banks which are guaranteed a government bailout when they fail.  I can't image the likes of Kiewit putting up with the kind of mediocre crap put forth by the federal reserve and academic economists of similar ilk.)  Combined with BLS data, I even use their research in my work of estimating the costs of small to $100M+ heavy civil/structural/marine construction projects, and I have made a name for myself by doing so.  For the most part, though, I have very little use for this so-called "science."

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