Economics: The Not So Scientific Science
In a recent Wall Street Journal article, Henry Kauffman lamented, “Why are we so poor at managing our key economic institutions while at the same time so accomplished in medicine, engineering and telecommunications?”
The juxtaposition that Mr. Kauffman makes between science and economics is worth noting because the answer to the question is rooted in the contrast.
Two Sides To Science
Let’s consider science.
I have spent more than half of my life studying science. The Merriam-Webster Dictionary defines science as, “a system of knowledge concerned with the physical world and its phenomena.” Dr. Norbert Weiner, author of “The Human Use of Human Beings,” would have referred to science as an “Augustinian Devil.” In his book he wrote that, “…the Augustinian devil is stupid. He plays a difficult game, but he may be defeated by our intelligence….”
Science hides its rules from us, but our intelligence produces answers. The answers may modify and get better, but they never actually change. Isaac Newton’s laws allow us to build complex machines; Sadi Carnot’s thermodynamics enable the construction of steam engines, internal combustion engines, and power plants; Einstein’s theory makes nuclear power and space travel possible. Each one is simply a “more complete” way of looking at things.
But Dr. Weiner also described in his book the Manichaean devil, and defined this devil as “a contrary force opposed to order,” that readily resorts to bluffing. Once we learn the rules, this devil will simply change them. We have now left the realm of science, and entered the realm of economics.
Merriam-Webster defines economics as “a social science concerned chiefly with description and analysis of the production, distribution, and consumption of goods and services.” Note the words, “social science.” It should, for clarity’s sake, be “social studies” since it is studied by many and is clearly not subject to the definition of Weiner’s Augustinian devil.
Economics is often confused as science, because it is the only social study that uses money, and hence math, to quantify measures.
What we fail to realize is this math carries a flaw: Computational economic predictions are made by illogical people, calculated by logical machines, to predict illogical behavior. Therefore, economics is inherently Manichean because people’s behavior changes for reasons we will never understand. Economic theories actually conflict. Look no further than the raging debate between Keynesian and supply-side economics.
Perhaps the most important question we should be asking is this: If economics is a study in sociology, why do we tend to address economic issues as if they were science? Landing a spaceship on Mars is one of the single most complicated things human kind has ever accomplished. But we have programmed an automated spaceship to do this.
Could we write a program to produce happily married couples for the rest of their lives? This has certainly been tried, but I doubt anyone would trust their life, or even their savings, with Match.com.
This is the issue we face. We have chosen to apply science to the most complex of social interactions, and expect to have predictable scientific outcomes.
Perhaps the better way of looking at this conundrum is to say, if it is wrong to use sociology to answer questions of science, why should we expect correct answers when we use science to answer questions about sociology?
That should answer Mr. Kauffman’s question.
Al Prescott is the president of Crescent Innovations Inc. in Worcester. He can be reached at alprescott@crescentinnovations.com.
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