by Mitch Kokai
Senior Political Analyst, John Locke Foundation
Most economics experiments are nonconclusive and nonrepeatable. For example, does an increase in the sales tax or the minimum wage repress business activity or unemployment? Does an increase in jobless benefits decrease the effort devoted to finding a new job? Yes, in some times and some places, other things being equal. Other times, in other places, the results are different. Other things are never equal.
As Robert Shiller, one of the winners of the 2013 Nobel Prize, observed, “Fields of endeavor that use ‘science’ in their titles tend to be those that get masses of people emotionally involved and in which crackpots seem to have some purchase on public opinion.”
See the body of work known as “political science” and the body of work so insistently known as “climate science.”
Optimists believe that the mathematical branches of economics are evolving and improving, creating better models of human behavior and sharpening understanding of the ways that behavior changes in the presence of the universal catalyst, money.
Pessimists believe that economics is a pseudoscience whose practitioners use computers and lots of data to prove things that they already believed.
Shiller comes down in the middle: “Economics is somewhat more vulnerable than the physical sciences to models whose validity will never be clear…given that the models describe people rather than magnetic resonances or fundamental particles. People can just change their minds and behave completely differently. They even have neuroses and identity problems, complex phenomena that behavioral economics is finding relevant to understanding economic outcomes.” …
… But economists know and moralizers should understand that economics is the study of making hard choices between alternatives like wealth and equality. Economics students learn that efficient allocation of scarce resources is harsh and difficult, but necessary. Without attention to efficiency, there will be no surplus wealth available for charity.