The current spate of dissent on this subject has been spurred by this guy, Angus Deaton, being presented with “The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel“
“A Nobel prize in economics implies that the human world operates much like the physical world: that it can be described and understood in neutral terms, and that it lends itself to modelling, like chemical reactions or the movement of the stars. It creates the impression that economists are not in the business of constructing inherently imperfect theories, but of discovering timeless truths.”
I’m afraid that the author had been so disgusted by the obvious mistakes that have been committed by so many of the supposedly reputable economists of this world that he has become amenable to throwing out the baby along with the bath water.
First of all we must remember that “Science is wrong. By definition.” All theories are imperfect and there is no such thing as ‘timeless truths’.
Ever since Karl Popper introduced the idea of ‘falsifiability’ as the litmus test for determining if any piece of information has any scientific value and Berger & Luckmann noticed “The Social Construction of Reality” it had become apparent both that science is being updated constantly – hence always ‘wrong’, or at least incomplete – and that people are ‘doing science’ on purpose – hence any discussion about reality being ‘described and understood in neutral terms’ is unrealistic, to say the least.
Coming back to Popper, Hermann Bondi had declared that ‘There is no more to science than its method, and there is no more to its method than Popper has said.’
True enough but as any ‘scientific declaration’ this is highly ‘updatable’.
In fact Science is, above all, a human enterprise. It’s a human that picks up – or devises – which method to use in a certain situation when he wants to find out something about a certain subject. Furthermore that method is applied by human individuals, not by robots. The same as those who had chosen it or by others, doesn’t make much difference. And, at the end of the cycle, some other people will evaluate – and sometimes try to replicate – the results.
So the mere fact that a certain set of results could not have been replicated by a certain team of evaluators doesn’t mean that much, by itself. This has been silently acknowledged by Andrew C. Chang and Philip Li in a paper published by the Federal Reserve in 2015: “Is Economics Research Replicable? Sixty Published Papers from Thirteen Journals Say ”Usually Not””. The couple admitted they needed some help from the original authors to replicate the results in a few instances and in some-others they didn’t have access to the same computer software as the first publishers.
But the most interesting fact is that in no instance the authors have been able to positively determine that the results published in any of the analyzed papers are inconsistent with the data presented by the original authors and/with the method invoked. In all instances when they failed to replicate the original results that happened because the original authors didn’t present at all the initial sets of data, they were incomplete or the method/sofware used to process that data was incomplete, altogether missing or proprietary. And all this despite in some cases the papers being published by journals specifically requesting that all data/methods/software being made available at the moment of publication.
In this situation I find the conclusion reached as being both correct and highly objectionable. And above all lacking any scientific value.
“Because we successfully replicate less than half of the papers in our sample even with assistance from the authors, we conclude that economics research is usually not replicable.”
Yes, it seems that too many papers published by presumably reputable journals are not replicable. But that is due exclusively to the journals themselves not observing their own rules or by some of the authors acting less than ‘over the table’. This phenomenon has nothing to do with ‘economics’ being less of a science than, say, physics and everything to do with humans being… well… human!
Let me go back to where I started, to Joris Luyendijk claim that “Don’t let the Nobel prize fool you. Economics is not a science.”
The author ‘illustrates’ his claim by remembering the infamous LTCM – a hedge fund set up by, among others, a couple of economists who had received a … you guessed it… a ‘Nobel prize for economics’ less than a year before the hedge fund went bust. Kind of ironic, isn’t it?
But the problem remains. The fact that LTCM went bust doesn’t prove anything except the fact that its management was completely inadequate.
The point is that trying to assert that ‘economics’ is not a science only because some guys used a couple of economic theories and failed, abysmally, is akin to claiming that physics is not a proper science because no weather bulletin is 100 percent accurate. Or that biology is not a full blown science because medicine has not yet found a cure for cancer. Or to claim that chemistry is bogus simply because Big Pharma is ripping us off.
At the end of their paper Chang and Li offer some very pertinent advice about how things could be vastly improved. Their main idea being that everything must be ‘above the table’ – both the raw data and the method/software used to process it must be made available for whomever wants to replicate the results. In fact this exactly what science, real science, is about. People have to be able to check thoroughly whatever the proponents of a theory are trying to ‘peddle’. This is the only way for a theory to be proved true or false. Or incomplete so further research might be declared necessary.
Similarly, at the end of his article Joris Luyendijk points his finger at the real culprit.
In reality economics, as a space where people try to gather information, is different from, say physics, only because we, the people, approach them with different attitudes.
Time has taught us, repeatedly, that every-time we’ve tried to deny the obvious we ended up with a bloody nose. The problem is that not all of us are, yet, able to recognize the obvious.
No one in his right mind will pretend, nowadays, that the Earth is flat. Meanwhile some people still pretend that vaccines may induce autism. They don’t. But some of the ‘anti-Vaxxers’ continue to pretend this even after a study partly funded by themselves demonstrated that there is no link between the two.
As suggested by Luyendijk and demonstrated by these examples the real culprit for what is going on, not only in the economic field, is our arrogance.
Arrogance that has led to the survival of what is known as ‘tehnocratic thinking’ despite more and more people learning of the role ideology plays in our decision making.
After all what can be more arrogant than pretending that you have ‘scientific reasons’ for what you do, despite the obvious fact that every one of us acts according to his own ideology?
I’m not going to pretend now that there are good and bad ideologies. I obviously think they can be classified but I cannot pretend that my classification is the correct one.
But I can pretend, and you should too, along with Joris Luyendijk, Andrew C Chang and Philip Li, that each of us should honestly state its point of view along with his opinion when ever discussing something.
After all each of us having an ideology is a reality while pretending that any of us can act as if it doesn’t is a rather pathetic lie.
To conclude I’ll have to keep the promise I’ve made at the beginning of all this and ‘update’ Bondi’s statement about Popper:
‘There is no more to science than its method and there is no more to its method than Popper has said’ but we should always bear in mind that science is exclusively ‘performed’ by human individuals.