Author Joris Luyendijk: Economics Is Not a Science (theguardian.com)

The Real Dr John writes: A Nobel prize in economics, awarded this year to Angus Deaton, implies that the human world operates much like the physical world: that it can be described and understood in neutral terms, and that it lends itself to modeling, like chemical reactions or the movement of the stars. It creates the impression that economists are not in the business of constructing inherently imperfect theories, but of discovering timeless truths. In 1994 economists Myron Scholes and Robert Merton, with their work on derivatives, seemed to have hit on a formula that yielded a safe but lucrative trading strategy. In 1997 they were awarded the Nobel prize in economics. A year later, Long-Term Capital Management lost $4.6bn (£3bn) in less than four months; a bailout was required to avert the threat to the global financial system.

Comments

It should be obvious

[The Real Dr John]

Economics is not a science. It is a study of human behavior like Psychology, and as the article points out, it has heavy political overtones. There was no Nobel Prize in Economics until 1969. Maybe it is time to retire that particular prize.

People who think economics is not a science...

[phantomfive]

People who think economics is not a science usually have no understanding of economics. The author, for example, uses examples of economists (and non-economists) who failed to predict what direction the market would go. This is like saying, "Physics is not science because we still don't have FTL travel. Fail."

Economics is a science, and it has a useful body of knowledge. MV = PQ is among the most tested theories in science. Gresham's law. The business cycle. All other things equal, an increase in supply will reduce prices. The biggest problem of economics isn't the lack of "hardness," it's the difficulty of running experiments (you can't re-run the depression six hundred times), so eliminating variables is difficult.

Anyone who thinks economics is the art of predicting the stock market, will be confused, like the author of this article.