ERDOĞAN ALKİN > Does the public believe what economists say?

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At the latest meeting of the American Economic Association, besides delving into discussions on scientific issues presented in papers, a little group of economists focused on the dismal science’s image problem, The Economist recently reported. In short, they suggested that despite views to the contrary, economists actually agreed on many issues but noted that the public did not really care that much about what they agreed upon. The famous magazine gave some interesting examples from the United States on what economists said and what people believed.

Although a majority of economists believe that stimulus packages lowered the unemployment rate, nearly half of the public does not share the belief. Again, while a majority of economists think that the “buy American policy” makes no important contribution to employment in the manufacturing sector, people believe the opposite. For economists, while it is hard to predict stock prices, it is not so for the public.

Does this erode the confidence of economists? Perhaps. Some of them say it is still more important to pay attention to economic stability instead of economic growth, and some European governments are following their advice. However, some other prominent economists defend the idea that growth is currently more important than stability in terms of creating jobs and ending the crisis.

It is not easy for common people to decide which argument is right and which is wrong. As such, only a professional economist can give the correct answer regardless of whether they are trusted or not. But are they dependable? Or which is dependable: economists or the science of economics? It must be accepted that, even though there are so many brilliant economists, the science of economics has not yet come up with brilliant theories to explicitly explain newly emerged economic problems. The absence of new theories naturally prevents the timely design of effective economic policies against economic maladies that generally emerge unexpectedly.

As a social science, economics gives some advantages to its professionals which do not exist in the positive sciences. For example, if a new crisis occurs as some economists are predicting, the defenders of this pessimistic projection will become famous, even though they won’t provide any measure to prevent the catastrophe. However, if this crisis never occurs, nobody will blame them. It means that there is no risk of losing fame even if a pessimistic prediction does not come to pass; instead, there is always a chance to become famous. If the history of economic thought is examined thoroughly, it is easily observed that most of the biggest names were pessimistic about the future of both national and international economies, but their pessimistic predictions never became reality.

In short, the science of economics needs new theories to explain new problems and develop new policies to fight against the maladies these problems create. Unfortunately, these new problems have a very complex nature. The big difference between the social and the natural sciences is the subject with which the two branches of knowledge deal. While social sciences deal with human behavior which changes often, almost unexpectedly, natural sciences investigate laws of nature, which don’t change as frequently.

However, this big and important difference between the two groups of sciences must not impede the efforts of the new generation of professional economists to construct new theories to explain newly emerging problems. Otherwise, modern man will continue to feel helpless in the face of every economic crisis as much as a caveman did thousands of years ago in the face of every natural disaster.


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Fr Grey

2/17/2013 11:16:43 PM

Blue Dotterel, (cont'd) But the whole society suffers: how much water we waste? What I want to bring out here is: Even the use of economics is political, and not science, it cannot go too far from science for too long.

Fr Grey

2/17/2013 10:55:02 PM

Blue Dotterel, if the government wants to suppress the price, she can simply set a policy. However, why she cannot do this for all products all the time? Even they press down the price by law, they will try to increase the supply or reduce the demand (whatever possible) to match the supply demand curves. Otherwise, the society will suffer. E.g. If the water price is not controlled, it will certainly rise a lot, and affect most of us. (to continue)

Fr Grey

2/17/2013 10:17:54 PM

Blue Dotterel, the uses of economics may not be economics itself. It can be political. Like nuclear Physics, the uses of nuclear physics can be non-science. About releasing fake data, I believe (without proof) that some scientific data released about human DNA, about Mars, ..., can be fake, because they are political. Yet we do not deny physics and biology are science. Economics is science, but truly abused. Like statistics, using your argument, it can be wrongly placed in social science.

Blue Dotterel

2/17/2013 2:16:52 PM

Fr Grey, Let's take GDP, not a "law", granted, but for economic absurdity, of some interest. What does this measure? It does not measure the social and environmental sustainability of healthy economic systems. It merely, measures the money exchanges that take place in an economy. It cares nothing about whether these exchanges contribute positively to society or not, only that they occur. Yet, governments regard this as a key "economic" indicator.

Blue Dotterel

2/17/2013 1:52:40 PM

Fr Grey, Science requires a tentative approach even to its laws. I do not disagree. The laws of Quantum mechanics have superseded those of Newtonian physics. Newtonian mechanics continue to be valued for their practical application in the real world. Economics is governed by politico-economic ideology. The "law" of supply and demand has little relevance in a real world of commodity price manipulation and over-production of goods. Prices are not set by supply and demand, only; and rarely are.

Fr Grey

2/16/2013 10:26:16 PM

Blue Dotterel, to round up, we cannot classify a subject by its laws. (Many laws in science journals are to be (dis)proved.) Economics is science due to the way we develop knowledge, not the knowledge itself. It stays in social science faculty not only because people think it is closer to our lives (I don't agree), but also it is closer to the other social science subjects (I agree). BTW, I mentioned absolute free economy for justification of some economic policies (of course not austerity).

Fr Grey

2/16/2013 6:13:59 AM

Blue Dotterel, For gas molecules. If we set laws to describe their individual motions, set some conditions to narrow down the difference of their individual KE, I am sure that you will encounter the same as describing economy and setting fiscal policies. Economics is related to human behavior, and it is why people think it is social science. Every science and social science subject has its own uncertainties, and every law in science and social science has a chance to be disproved in future.

Fr Grey

2/16/2013 5:45:23 AM

Blue Dotterel, E.g. the law of conservation of energy is commonly known, and conservation of mass is a rule for calculations in chemistry. However, relativity tells us each of energy and mass alone is not conserved; but mass and energy together conserved. In relativity, mass can *translated* into energy, and vice verse. Maybe many years later, Einsteins II will tell us E is not mc^2. Who knows?

Fr Grey

2/16/2013 5:37:38 AM

Blue Dotterel, "Absolute free economy" is a myth, and it "pushes human to their end." Therefore, we need politics to moderate economy. About laws in science. Nobody knows whether the laws of thermodynamics will be violated in the future. Newton's law of motion cannot apply in extreme large (the universe, not just solar system) and small (quantum) environments. Relativity has replaced these laws for decades, but Newton's laws are still enough to explain a lot. Same as laws of demand and supply.

Blue Dotterel

2/15/2013 7:36:52 PM

Fr Grey, "Absolute free economy" is a myth of economics that has never and never will occur in the real world. The math and models of economics are pretty, but not consistently observable in real world situations. There is a serious lack of empirical rigor in economics which is why it is more politics than science.
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