If you thought I could be critical about economics, Peter Radford, at Real World Economics, is vicious in answering the question "Do We Need Economists?":
Take, for instance, the current spat between Paul Krugman and John Taylor. Both extremely well educated and intelligent economists who have very different interpretations of the recent increase in government spending....
Two grown up and highly educate economists adding very little to anything except to display their respective ideological views. Both right in their own way. Both wrong in others.
...The point is this: economics is a giant mess. Economists know this. They excuse themselves by saying that it has always been this way, and that scholarly disagreements are the stuff of academic progress. From this hurly-burly springs forth new ideas and thus a greater contribution to society. So they say.Except.
As DeLong points out, this argument is going nowhere. Indeed it seems to be preventing progress. It has simply devolved into an ideological spat. And is making economists appear useless. There is an economist to defend any hair-brained policy proposal. Anything a politician cares to suggest can be given a well argued, and reasonable defense by a well respected and tenured professor from somewhere.
And when economists are hopelessly wrong? Are they fired? Are they pilloried and thrown out of their tenured positions to suffer the voluntary unemployment lines they condemn others to? Dean Baker has recently thrown a hissy fit over this. Of course not. Failed economists are a dime a dozen in our best schools. They are still teaching whatever they first thought. No amount of empirical data threatens their prestige. Why? Here's the great scam: because economics is a self-contained, self-referential pursuit disconnected, very deliberately and carefully, from the dangers of having to be useful. It is thus immune from disproof. All that Popperian conjectures and refutations mumbo-jumbo is not applicable to economics. Economists have constructed their world so as not to have to be practical. Instead they are quasi-philosphers, quasi-mathemeticians, quasi-physicists, quasi-psychologists, and quasi-sociologists. By so being they can dodge between the bullets of practical questioning and never have to improve their art. Being quasi-everything is a great defense. You can confuse all the specialists and answer to no one. Except yourself.
As the kids used to say, read the whole thing.
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I love science. It explains everything! Science IS culture based on the facts of life, minus the superstition that is ever so prevalent. The science of dating, the science of the cosmos, the science of attraction. Great blog. I spend hours reading...
I recently heard the CEO of a major insurance company (on the occasion of naming our college building after his company) going all Tea Party on government regulations. He said that idealistic kids "should study economics so they'll know something about the system they are trying to change." His economics, presumably.
Economics is a lot like astronomy before the development of the telescope and calculus. It is worth studying, a lot of brilliant minds have devoted a lot of time and energy to understanding it, but, for now, it is largely an imaginary construct akin to crystal spheres and epicycles.
If I wasn't an atheist, i would pray for a Newtonian-esque revolution in economics.
Supposedly (I've never checked for validity) Harry Truman once said he wished his staff could find him a one-armed economist so he'd never have to hear "On the other hand..." again.
As an economist, I think this is an unbalanced critique.
Most of this critique refers to macroeconomics. Macroeconomics has the disadvantage that essentially there is only one time series of data to test theories on. (Well, you can compare different countries, but their economic structure differs so much that it is unclear that you can apply the same model.) As a result, macroeconomics tends to overly rely on theory and to be more subject than we might desire to ideological biases.
But the overwhelming majority of economics don't do macroeconomics. They study some specific aspect of the economy: labor economics; public finance; environmental economics; development economics, etc. And, for this work, there is a great deal of data to test theories.
From economics, we know:
*** A great deal about what works in helping people of developing countries (see the work of Esther Duflo, Dean Karlan, and Dani Rodrik);
*** A great deal about the U.S. income distribution, and how and why it is changing (see the work of Emmanual Saez, Larry Katz and David Autor);
*** Much about what works in job training, welfare reform, and education (see the work of MDRC, Kevin Hollenbeck, Carolyn Heinrich, Thomas Kane, Raj Chetty, Roland Fryer, Helen Ladd, Alan Krueger, Cecelia Rouse, Ron Ferguson, and Jesse Rothstein);
*** A great deal about what works in improving environmental quality (see the work of Robert Stavins, Bill Nordhaus, and Kerry Smith);
*** A great deal about what works to improve cities (see the work of Ed Glaeser, Enrico Moretti, and Jacob Vigdor).
*** A great deal about the importance of early childhood interventions (see the work of Jim Heckman, Steve Barnett, and my own work).
Only a modest portion of economics is concerned with issues such as how to stabilize the macro-economy. And in other areas, there is much more agreement among economists on what the empirical data shows.
What Tim said, and also this: financial economics (the stuff of Black, Scholes and others) has been tested extensively in practice and proved very useful for practical purposes (hedging market risk).
Then again, most economists prefer not to have anything to do with "economics of ketchup".
@Roman
Except that when Scholes and Merton used their models in their own hedge fund, LTCM, they crashed and burned spectacularly.