Home > The Economics Profession > Is economics a science? A view from outer space

Is economics a science? A view from outer space

from Claude Hillinger

Imagine for a moment   that a delegation from outer space visited the earth with the aim of ascertaining the level of scientific achievement on our planet. Regarding the natural sciences this was fairly easy since here the accomplishments are well known and agreed upon and in the case of applied natural science, they are also easily visible. Understanding the contributions of social science turned out to be more difficult. Researching the internet they chanced on the REPEC repository of economic literature. They found there a list of some 2000 relevant journals. The site also stated that they had had some 300 million abstract views and some 75 million downloads. The delegation was greatly impressed by this immense level of activity in economic research.

There remained a puzzle: where was the knowledge that such a vast outpouring of research could be expected to produce.  Their questioning of economists on this score did not turn out to be illuminating. Some said that they were producing ever more sophisticated models, while others regarded the same models as devoid of empirical content. Finally, they were told that the Yale economics professor  Robert J. Shiller, who recently won the Nobel Prize, had written an article entitled Is Economics a Science? (http://www.project-syndicate.org/commentary/robert-j–shilleron-whether-he-is-a-scientist). Hoping to finally gain some illumination, the delegates turned to a perusal of this article.

Shiller begins by stating that:

One problem with economics is that it is necessarily focused on policy, rather than discovery of fundamentals. Nobody really cares about economic data except as a guide to policy: economic phenomena do not have the same intrinsic fascination for us as the internal resonances of the atom or the functioning of the vesicles and other organelles of a living cell. We judge economics by what it can produce. As such, economics is rather more like engineering than physics, more practical than spiritual.

On reading this paragraph the members of the visiting delegation found themselves to be even more puzzled than before. Humans were more interested in atoms and single cells than in their own society? Economists are like engineers, but unlike engineers not interested in basic science as a foundation for their engineering? Physics is spiritual rather than practical? The visitors decided not to give up, but to read on, still in the hope of illumination. Perhaps Shiller would present some of the great works of engineering that economists must have accomplished.

Shiller goes on to discuss how the rise of science gradually led to the elimination of quacks and charlatans in many areas, for example in the passage from astrology to astronomy. He notices the criticism of economics as consisting largely of pretentious mathematics devoid of empirical substance. He notes that similar criticisms have also been leveled against string theory in physics. His conclusion:

As economics develops, it will broaden its repertory of methods and sources of evidence, the science will become stronger, and the charlatans will be exposed.

The visitors concluded that evidently there were some charlatans in economics. Also, that Shiller seemed to believe in some sort of iron law of the eventual disappearance of charlatans.  While hoping that he was right in this prognosis, they nevertheless doubted that his iron law had more substance that the one that had been announced by Marx.

  1. December 13, 2013 at 2:05 pm

    Science is about the scientific method not about how successful it is. I would say yes economics is a science, just more difficult that the others. Physics has their quantum randomness, economics has the Lucas Critique! Forward-looking agents complicates economics unlike any other science. Natural experiments are virtually impossible. Schrödinger’s cat of physics lurks everywhere in economics. Physics is coming to the problem that economics has that theory is outstripping the energy required to do natural experiments to test their theories. You write down your string theory equations hoping that they can be tested. Economics is the same. Until they are tested, however, there must be humility and recognize them as hypotheses.
    As for Shiller, yes the world has a misconception of economics as engineering. Economics goes astray when we delve too much in the policy arena. You may argue that is the purpose of economics eventually. But you need pure research economists devoid of policy analysis to reach that stage. After all it is a generation after a theory is even developed that we can even begin to think about it for policy.

  2. sergio
    December 13, 2013 at 3:27 pm

    Economists always test hypotheses that free market is the only perfect economic mechanism and government is always bad. Paradoxically but they always prove this hypotheses as correct, using “scientific” mathematical methods.

    If you want economics to be called a true science let it test hypotheses that free market is not perfect mechanism. Let it start testing hypotheses that government is good.

    Otherwise, it is ideology and not science.

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