Tuesday, January 04, 2011

Hokey Religion

The "profession" of economics is broken. The peer review process doesn't work, the majority of the schools teach numerology and mythology as religious dogma, reward is given to crass, disfigured scientism, while beautiful, descriptive, self-evident science is regarded as magical.

Russ Roberts has a string of questions offered as a litmus test. The science of economics cannot answer these questions definitively; only "economic" religion and its mystics will offer final answers.

Suppose the economy does well this year–growth is robust and unemployment falls. What is the reason for the improvement? Will it be because of the natural rebound of an economy after a downturn that has lasted longer than people thought? The impact of the stimulus finally kicking in? The psychological or real impact of extending the Bush tax cuts? The psychological or real impact of the November election results? The steady hand of Obama at the tiller? All of the above? Can any model of the economy pass the test and answer these questions?

The reason macroeconomics is not a science and not even scientific is that the question I pose above is not answerable. If the economy improves, there will be much talk about the reason. Data and evidence will be trotted out in support of the speaker’s viewpoint. But that is not science. We don’t have a way of distinguishing between those different theories or of giving them weights to measure their independent contribution.

I know other sciences have their kooks and cranks. I know there are political games played within their peer review, also. I realize that science is not perfect (or else it wouldn't be science).

My question is, though, how do the other sciences protect the kooks and cranks from dogma, while protecting the science from being overrun with kooks and cranks? How is the bright line between conclusion and opinion enforced? How do they punish games of three-card-monty being played with the data and math?

Or, do they?



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