Sunday, May 29, 2005

Economic Science

What I find odd about economists sometimes is their persistent need to declare their work scientific. Is it a sign of some deeper insecurity that economics may not in fact be science? Do economists hope to bolster their findings and gain more credibility? Case in point: See this page with a picture of Ed Prescott and Finn Kydland (2004 Nobelists) listed as "Scientist" and "Chief Scientist". Or see The Collected Scientific Papers of Paul Samuelson. The Nobel Prize in Economics is officially titled "The Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel". The Nobel Prize in Physics is just that. Moreover, you don't often hear physicists and chemists referring to their work as physical science or chemical science. (Well, you do for the former, but it is used when a broader context is denoted.)

One of the most interesting parts of Guns, Germs, and Steel by Jared Diamond was the very last part in which he discusses "the future of human history as a science:
One cannot deny that it is more difficult to extract general principles from studying history than from studying planetary orbits. However, the difficulties seem to me not fatal. Similar ones apply to other historical subjects whose place among the natural sciences is nevertheless secure, including astronomy, climatology, ecology, evolutionary biology, geology, and paleontology.
I would add cosmology to that list as a caveat to his next point:
People's image of science is unfortunately based on physics and a few other fields with similar methodologies. Scientists in those fields tend to be ignorantly disdainful of fields to which those methods are inappropriate and which must therefore seek other methodologies--such as my own research areas of ecology and evolutionary biology. But recall that the word "science" means "knowledge" ... to be obtained by whatever methods are most appropriate to the particular field.
Typically these sorts of discussions lead down a dark and pointless parth about the definition of "science" but I think such arguments are disingenuous. We can define it however we want such that whatever fields we want meet that definition, there is no natural definition. Besides, no field should be taken more seriously simply because it is termed "science". All arguments should be evaluated based on their merits.

Diamond continues by pointing out some aspects of the divide between "historical sciences" and "nonhistorical sciences":
Historical sciences in the broad sense (including astronomy and the like) share many features that set them apart from nonhistorical sciences such as physics, chemistry, and molecular biology. I would single out four: methodology, causation, prediction, and complexity.
In a nutshell, historical sciences cannot run controlled experiments, historical sciences care about ultimate as well as proximate causes, a priori predictions about future events are problematic if not impossible, and the systems studied by historical sciences are often complex, chaotic, and probabilistic.

I think that these four properties pretty accurately describe what separates economics from a discipline like physics as well, with the exception of the third one. Predictions on an individual level are certainly the aggregate, less so.


Anonymous Anonymous said...

Hayek referred to these characteristic differences in the various sciences as dealing with large complex phenomena and small complex phenomena. SCP characterizes sciences which can mostly be fit in their entirety into a petri dish, like say molecular biology. LCP characterizes sciences of which no part will fit into a petri dish, such as meteorology---and economics.

Hayek also coined a term for those who could not or would not grasp this distinction and insisted on acting as if LCP could be analyzed and tested as SCP; he called the practice "scientism."


5:24 PM  

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