destabilizing stable economics

Economics as a Science?

Economics as a Science?

By Johnny Fulfer.

Is economics a science? Could it be? Should it be? The debate is as alive today as it was in the early twentieth century. This article reviews some of the key arguments in the discussion and provides a helpful backdrop against which to rethink the purpose of economics today.

In 1906,  Irving Fisher argued that economics is no less scientific than physics or biology. All three aim to discover “scientific laws,” he explained. Even though they may not always be represented in reality, scientific laws are considered fundamental truths in nature. Newton’s first law of motion, for instance, cannot be observed. Only if certain circumstances were met, a body would move uniformly in a straight line. The same holds true for economic science, Fisher concluded.

But not everyone agreed. The discipline was charged with unsound methods. Specifically, economists were accused of using the deductive method without the necessary level of precision. Jacob Hollander addressed the charges in a 1916 essay. Scientific inquiry involves uniformity and sequence, Hollander maintained. Progression in science relies on the formation of hypotheses, which may at some point become ‘laws.’ Observation and inference are the first steps toward the creation hypotheses. The final step in the scientific process is verification, which is required before we move from theory to law. Without verification, he argued, “speculation is an intellectual gymnastic, not a scientific process.”

Hollander’s work reveals one of the questions at the heart of this debate: Is verification required, and even possible, given the complexities of economic phenomena? Scholars have a disposition to rely on the works of previous thinkers, Hollander argued, without endeavoring to move beyond familiar perspectives.

This question lives on today. In a 2013 opinion piece for the New York Times, Stanford economist Raj Chetty argues that science is no more than testing hypotheses with precision. Large macroeconomic questionssuch as the cause of recessions or the origin of economic growth“remain elusive.” This is no different than large questions faced by the medical field, such as the pursuit to cure cancer, he explains. The primary limitation of economics, Chetty argues, is that economists have a limited ability to run controlled experiments for theoretical macroeconomic conclusions. The high monetary cost and ethical standards make these types of controlled experiments impractical. And even if we could run a controlled experiment, it may not matter in the long run, for society changes.

In a 2016 essay, Duncan Foley added to the conversation. He argued that the distinctions between the social and natural sciences are not clear. Both come from the same scientific revolution, and both are influenced by values. The notion that scholars in the natural sciences “pursue truth” is a flawed assumption, Foley argues. Scholars in the natural and social sciences choose which problems to solve and the methodology they use. This choice involves values, since a scholar must value one research project more than another.

Examining the scientific nature of economics, John F. Henry explains that neoclassical economic theory holds a position of influence in society because of its universal and abstract nature. Henry maintains that we should reexamine this assumption of universality. If economics is based on subjective values, how can it be considered universal? Should economists continue making ‘progress’ toward a more scientific structure of knowledge? This leads us to ask how we define progress. There is no end to this debate.

It seems unproductive to continue asking such questions. Rather than debating whether economics is or is not a science, perhaps we should shift the discussion toward questions that ask why economics needs to be a science in the first place. Where does this desire to be ‘scientific’ come from, and why is it so important for economics to be considered scientific? Perhaps the real issue is the determination to make economics a science.

About the AuthorJohnny Fulfer received a B.S. in Economics and a B.S. in History from Eastern Oregon University. He is currently pursuing an M.A. in History at the University of South Florida and has an interest in political economy, the history of economic thought, intellectual and cultural history, and the history of the human sciences and their relation to the power in society. 



4 thoughts on “Economics as a Science?”

  • Economics is a human invention, unlike quantum mechanics which is a human interpretation of the fabric of the universe at the Planck scale.

    Economics is the lingua franca of human public policies. If you don’t speak economics forget about influencing policies in any way shape or form.

    The debate about economics being a science or not is a complete cognitive dissonance, as useful as tits on a bull, imho.

  • Only recently has macroeconomics become a true science–before that it has been seen as a pseudo-science without sufficient of the recognized features of true science to qualify. And several economists have even been complaining about this unsavory fact. But somehow they did virtually nothing in trying to make it a better way for our understanding of how or society functions.

    One school of thought said that since the subject is so complicated, we need lots of computing using huge amounts of data and a means of reducing this, but when they programmed for it the results were still too complicated, for us mere mortals to come to terms with and the pseudo preface stuck. At this point it needed an engineer to approach the problem and not a programmer.

    That ex-engineer was myself, and my recent book about it does at last transfer our “dismal science” into a true one. After many years of part-time study and research, I finally managed to express it properly in my recent book: “Consequential Macroeconomics–Rationalizing About How Our Social System Works”. The methodology is logical, simple, sensible and profound. It is closely related to past ways but in a rather different attitude setting–and the results are somewhat surprising, even I did not believe some of the first numerical output data, but it is true! Politicians and old-school economists will object without knowing why!

    As an idealist who wishes for most scientific knowledge to be freely available, my book is offered here, if and when you write to me for a free e- copy to chesterdh@hotmail.com

  • Why would we take the word of an economist on whether economics is a science? Ask a scientist. Science isn’t about “laws” it is a method, for understanding the cosmos, by using repeatable methods, with accuracy and precision. It also relies heavily on statistics and probabilities. When you learn statistics, you learn that it is important to state your assumptions. Economics teaches us that our assumptions do’t matter,or are always right. Economics has a long way to go to be accepted as science, but cointinues to do much harm in the meantime. It’s like the Jesuits clinging to their beloved Euclidean geometry and refusing to countenance the “heresey” of Galileo.

  • It may be unproductive to ask whether economics should be a science. But whatever one’s views on this question, it is surely valuable for economists to learn from the sciences, especially a science “like biology, [which also] deals with a matter, of which the inner nature and constitution, as well as the outer form, are constantly changing”, as Marshall wrote a century ago. After all, biology has developed a substantial and secure body of knowledge about the living world and how it works (far more than was available in Marshall’s time). We should aim at a similar success in understanding the economy.

    What I find interesting (but not very encouraging) in this debate is that it goes straight from “Observation and inference are the first steps toward the creation [of] hypotheses. The final step in the scientific process is verification” (Hollander) to focusing only on verification and testing. This leaves out the equally important – but typically overlooked – need for economic theory to be based on “Observation and inference”. In other words, the view that our theoretical ideas should come from examination of the real world, not from our imagination as made manifest in assumptions and axioms. It is what I call “evidence-based economics”, and doing it is not as difficult as it may sound! – see my website (https://evidence-based-economics.org/) for some examples both of substantive economic analyses and of economic methodology.

    Disclaimer: before becoming an economist, I worked as a research biologist in epidemiology, and before that was trained in human physiology. It means that I understand how natural scientists generate secure knowledge – and how this is often misrepresented by traditionalist economists (and philosophers of science).

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