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Is Economics More Like History Than Physics?

The views expressed are those of the author and are not necessarily those of Scientific American.


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Is economics like physics, or more like history? Steven Pinker says, “No sane thinker would try to explain World War I in the language of physics.” Yet some economists aim close to such craziness.

Pinker says the ”mindset of science” eliminates errors by “open debate, peer review, and double-blind methods,” and especially, experimentation. But experiments require repetition and control over all relevant variables. We can experiment on individual behavior, but not with history or macroeconomics.

Isaiah Berlin pointed out that “because” is used differently in science and history. In science, it means reliably causal. In history, it means a looser, narrative kind of causation, a useful explanation of the complex web of factors affecting a particular situation. Since Plato many have privileged universal timeless truths. But history’s truths are typically particular and time bound, describing changes through time.

Pinker’s science needs types and theories. It assumes that phenomena “may be explained by principles that are more general than the phenomena themselves.” But Berlin noted that knowledge can be nomothetic or idiographic. “Nomothetic” means fit for law-like generalizations, having reliably repeatable regularities. “Idiographic” means much the same as the Hebrew word “da’at”: knowledge gained through direct relationship with the particular (not via theories or types). ()

Physics is fortunate to enjoy a kind of closedness that human life lacks. Nothing in physics chooses. And nothing it studies innovates. History and economics study things that can change how they act and react. So the methods of the inanimate sciences face extra challenges when used on people. Even statistics and probability can’t always help. Previously measured distributions can be upset by the spread of behavioral changes, making social systems less predictable.

Jerome Kagan notes that “19th century economists, mimicking the physics of the era…adopted the mathematics that physicists used to describe” inanimate equilibria. Many economists still use such methods. And macroeconomists try to model events essentially as complex as world wars, using (insanely by Pinker’s standards) the language of physics.

The Oxford English Dictionary says “science” originally just meant knowledge. In the Middle Ages, the seven liberal arts (grammar, logic, rhetoric, arithmetic, music, geometry, astronomy) were also called the “seven liberal sciences.” Shakespeare used science in that sense: “Cunning in Musicke, and the Mathematickes, To instruct…in those sciences.”

We risk blinding ourselves with science, in its now narrower highly reliable form. It is dazzling. But it also has limits. Its tools don’t fit all situations. Economics, especially the macro kind, has history-like aspects. Its narratives might be woven with data, but not everything that counts can be counted. It must deal with different kinds of change that (to paraphrase Shakespeare) were never dreamt of in our physics. Perhaps this limits economics to moderately reliable maxims.

Illustration by Julia Suits, The New Yorker Cartoonist & author of The Extraordinary Catalog of Peculiar Inventions.

Previously in this series:

It Is in Our Nature to Be Self-Deficient
Inheriting Second Natures
Our Ruly Nature
It Is in Our Nature to Need Stories
Tools Are in Our Nature
We Fit Nature To Us: Evolutions two way street
Justice Is In Our Nature
Behavioral Telescope Shows How Cooperation Works
Selfish Genes Also Must Cooperate
Game Theory And The Golden Punishment Rule
Revolutionizing Economics by Evolutionizing it.
Science’s Mobile Army of Metaphors
Greek Myths About Human Origins
Evolutionary Economics And Darwin’s Wedge
Economics vs Fiction on Human Nature

Jag Bhalla About the Author: Jag Bhalla is an entrepreneur and writer. His current project is Errors We Live By, a series of short exoteric essays exposing errors in the big ideas running our lives, details at www.errorsweliveby.comwww.errorsweliveby.com. His last book was I'm Not Hanging Noodles On Your Ears, a surreptitious science gift book from National Geographic Books, details at www.hangingnoodles.comwww.hangingnoodles.com. It explains his twitter handle @hangingnoodles Follow on Twitter @hangingnoodles.

The views expressed are those of the author and are not necessarily those of Scientific American.






Comments 13 Comments

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  1. 1. Roto2 1:59 pm 08/16/2013

    This article is dead on. Economics is not science and never will be. It does not study natural phenomenon. It’s observations are generally not repeatable at least over the longer term. They evolve with changes in law, human behavior, and unpredictable worldly circumstances. True the mathematics may explain observations to a degree over some period of time. But unlike physics, economics is not grounded in a series of immutable physical laws. It is said to never say never. In that light, the best that economics could every do is explain from the basis of atomic theory the predicted behavior of all the individual people based on the predicted biochemical processes involved. This is an essentially impossible task due to the unimaginably greater complexity of human interactions compared to even the most complicated quantum, relativistic, thermodynamic systems studied and explained by physics. However, even if the impossible on this case were possible the result would almost certainly fall under Chaos Mathematics which basically predicts the unpredictability systems even when the underlying basis for that system are exact, predictable physical law. Great article. Great conclusion! (From a physicist with many interests.)

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  2. 2. David Cummings 2:24 pm 08/16/2013

    Repeatability is a non-issue in several very important sciences (completely scientific sciences):
    1. Theory of Evolution
    2. Big Bang Theory

    (Just to name 2.)

    It’s true that evolution can be studied in the lab with bacteria and other small fast-dying creatures, but in general, in the big-picture of the evolution of life on earth, it only happened once and we can’t re-run it. And that’s definitely the case with the big bang and the evolution of galaxies.

    But that doesn’t mean these studies are unscientific. If you need a primer on the subject, look up some of the essays on evolution by Stephen Jay Gould. He explains with exquisite logic how MAKING PREDICTIONS is the key to these kinds of science, predictions about what we will find when we look here, there and again over there.

    Confining science to what is done in a repeatable lab setting is really taking a narrow-minded view of what science really is. Kind of like the creationists who declare with great pomp and ceremony that “evolution is only a theory” as if a theory is somehow unscientific.

    You don’t need a test tube to be a scientist. But you do need theories. And you do need to make predictions about what you will find in the real world based on those theories.

    Examples of the kind of predictions a non-lab-setting science can make are numerous predictions of transitional forms that are eventually found in the fossil record or the existence and strength of the microwave background radiation eventually found exactly as predicted in the sky.

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  3. 3. Owl905 2:51 pm 08/16/2013

    In the book “An Economic History of Modern Europe”, the first chapter was dedicated to the ambiguities and problems of trying to define economics and economic history.
    It was much better starting with Chapter 2 – the agrarian revolution in medieval Europe.
    Trying to call economics a ‘science’ is unfair to issue and to the professionals – politics, history, anthropology, and economics, are better grouped together and apart from the sciences. They’re all disciplines mainly based on the human timeline. The sciences are based on properties and mechanics.

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  4. 4. TTLG 5:19 pm 08/16/2013

    Certainly economics, like politics or psychology, can be a science. Science doesn’t necessarily mean experimentation. It can also be checking hypotheses by observation like in astrophysics. we do not do experiments on the sun, but we observe things like the 11 year solar cycle and make corrects in our thinking based on how well our predictions work.

    Part of the problem with all sciences is the reluctance of some people to revise the hypotheses which are very dear to their hearts. In the human-related sciences like economics this is much more common because the ideas have a direct effect on our lives. There is also the issue of people making large amounts of money off of taking advantage of others, so defending clearly incorrect ideas such as unregulated capitalism has a great advantage to them.

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  5. 5. jerryd 8:32 pm 08/16/2013

    Economics is Psychology. Anyone thinking otherwise doesn’t have a clue.

    At least if you want more accurate economics instead of made up stuff of classical economics of numbers, which is only a small part of it.

    I’d have thought the recent fiasco in 2008 would have driven that home fairly deeply.

    The fact many didn’t understand human behavior as it effects the numbers was a large part of the problem causing the crash, near worldwide depression, before Obama pulled our azz out of the fire from such stupidity.

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  6. 6. Cramer 12:34 am 08/17/2013

    Or you could ask “Is Physics More Like History Than Economics?”

    Is it science when new knowledge requires statistical analysis of 25 petabytes of data per year produced from a $10 billion experiment (LHC)? Over 300 trillion proton collisions have been analyzed.

    How many bubbles and economic collapses (or business cycles) would we have to analyzed to understand macroeconomics? And does it even matter because why would we want to spend $10 billion researching macroeconomics when we can blame it all on Barney Frank and Freddie Mac and start a new bubble all over again?

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  7. 7. Bionate 3:38 am 08/17/2013

    I think the author makes a good point because economics and even economists often view the topic as something that can be viewed with the type of precision traditionally associated with something like physics. That’s why economists rely so heavily on complicated mathematical models. In reality, I think, economics is more akin to modern biology than it is to physics.

    Actually, biology and economics of a long history of influencing each other. Anyway I have been reading a lot of articles lately about the varying degrees of “scienciness” of different subjects and I think a useful definition Would be helpful. Rather than going over the finer points of the scientific method to determine what sciences maybe we need to recognize that science itself even widely recognized sciences can be broken down into 3 different categories. Theoretical sciences which use existing knowledge to explore new scientific grounds. Experimental sciences that do repeatable and testable experiments. And observational sciences that depend largely on existing phenomenon that are too complicated for reductionist methods that would be used in experimental science. Economics clearly falls within the realm of observational science.

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  8. 8. rkipling 10:34 am 08/17/2013

    This author knows nothing about economics. His blog is an information free zone.

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  9. 9. boner 2:33 pm 08/17/2013

    agree w/ rkipling. it’s extremely disheartening that a supposedly respectable publication like Scientific American lets some random “entrepreneur and writer” expound at length on economics without, well, seeming to know anything about it. did anyone else notice he managed to go through the entire article about economics without citing any economist, at all? and look at all the articles they’ve let him post here! it’s absurd!

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  10. 10. The Dude 8:21 pm 08/17/2013

    If greed could be accounted for in the theory, you might be able to classify economics as a science.

    Stock market high and interest rates low. Hedge funds that can manipulate the market in a single day. Many of the companies on the exchange whose only form of business is trading on the exchange. An artificial government influence on the macroeconomy. I could go on and on…

    Bookkeeping is a science. Economics is not, as long as greed is involved.

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  11. 11. jtdwyer 1:36 pm 08/18/2013

    I agree mostly with jerryd: economics is essentially social psychology – people collectively determine events based on their real or perceived needs and desires…

    Despite physicists having adopted anthropomorphic reasoning in the application of informational concepts to the events of the universe, they are still determined by physical processes and interactions.

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  12. 12. jtdwyer 1:50 pm 08/18/2013

    I failed to mention that it is people that determine only short term events in economics – longer term, events are determined by prior investment actions and even longer term by ‘natural’ conditions and physical restrictions, such as population distribution and resource (esp. water) availability…

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  13. 13. dburress 3:21 pm 09/23/2013

    It is a waste of time arguing with people about what is “science.” That’s especially true when then don’t bother with a definition, or use a faulty definition, or don’t explain the footnotes on the definition. E.g. “But experiments require repetition and control over all relevant variables. We can experiment on individual behavior, but not with history or macroeconomics.” Cosmology does not allow control over any variables in an ordinary sense: we have only one universe. Yet cosmologists make predictions about future measurements of past events with astounding accuracy. Economists do something similar, with far less accuracy but in many cases doing far better than chance.
    David Burress
    Lawrence KS

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