[nero]

$this->bbcode_second_pass_quote('ElijahJones', 'A')nd no I do not believe that the mathematics for modeling human social systems is yet to be invented, it already exists. The problem is that a clearer understanding of what's going on with the economy requires increased accountability and reporting. That's where the wolf is sleeping my friends.

[killJOY]

I've quoted this before, but it's worth quoting again.

Skeptic magazine says this about economics as a "science":

$this->bbcode_second_pass_quote('Steven Bratman', '
')If the hard sciences are problematic, one wonders whether there is any rational reason to favor any conclusions drawn by the soft sciences. Consider economics. An economy is a complex system with multiple interlocking variables and a great range of natural variation, much like a human body. Because it isn't possible to change just one variable in an economy, nor to try an experiment twice by starting an identical society under new rules, economic analysis is really the equivalent of observational evidence (economic records) combined with plausible reasoning (an economic model). In medicine we have seen that observational evidence combined with plausible reason can lead to conclusions that are the exact opposite of truth. [!]

[Doly]

$this->bbcode_second_pass_quote('Steven Bratman', '
')Because it isn't possible to change just one variable in an economy, nor to try an experiment twice by starting an identical society under new rules, economic analysis is really the equivalent of observational evidence (economic records) combined with plausible reasoning (an economic model). In medicine we have seen that observational evidence combined with plausible reason can lead to conclusions that are the exact opposite of truth.

[emailking]

If the implication is that macroeconomics is chaotic, then it doesn't make much sense to make predictions. Economics would be reduced to evaluating the past and present, or at best forcasting trends.

Whether or not I withdraw $1 from my bank account could be the difference between 20 more good years or complete global collapse within 5. That's chaos theory!

[killJOY]

$this->bbcode_second_pass_quote('Doly', 'D')on't insult medicine by suggesting that it's anywhere as unscientific as economics

[Doly]

$this->bbcode_second_pass_quote('killJOY', '
')Mr Bratman was researching pseudo-medicine and the Placebo
Effect. He used the economics question as an illustration of just how difficult it is to arrive at scientifically sound conclusions.

[Falconoffury]

$this->bbcode_second_pass_quote('', 'M')edicine has produced some admirable results in the last century.

[MountainHiker]

Jay Hanson has a number of essays at dieoff.org that pretty much demolish the basis of modern economic theory.

A few years back I was an adjunct professor of physical geography and earth sciences at a city college and I shared an office with several other part-timers, including a business 101 prof. One day he left a test in the office so I decided to give it a read. It busted me up. It was multiple choice and the correct answer to every question was the most "pro-business" answer you could come up with. For example, Profits are: the reward for being an entrepreneur.

Coming from a scientific background, and having never ventured into the business realm during my college days, I found this hilarious. Rather than teaching with deduction and rational analysis, it seemed like nothing more than positive reinforcement. I got a double laugh when I thought of all those whiny conservative talking heads who bitch and moan about colleges being liberal brainwashing institutions. Just like the so-called corporate liberal media...suuurrrre it is.

[darren]

$this->bbcode_second_pass_quote('MountainHiker', 'J')ay Hanson has a number of essays at dieoff.org that pretty much demolish the basis of modern economic theory.

A few years back I was an adjunct professor of physical geography and earth sciences at a city college and I shared an office with several other part-timers, including a business 101 prof. One day he left a test in the office so I decided to give it a read. It busted me up. It was multiple choice and the correct answer to every question was the most "pro-business" answer you could come up with. For example, Profits are: the reward for being an entrepreneur.

Coming from a scientific background, and having never ventured into the business realm during my college days, I found this hilarious. Rather than teaching with deduction and rational analysis, it seemed like nothing more than positive reinforcement. I got a double laugh when I thought of all those whiny conservative talking heads who bitch and moan about colleges being liberal brainwashing institutions. Just like the so-called corporate liberal media...suuurrrre it is.

[MrBill]

$this->bbcode_second_pass_quote('', 'M')any times I have heard economic arguments that focus only on two or three important indicators and draw very broad conclusions about the economy and its future. The fallacy here is in not understanding the importance of related rates and feedback loops in complex systems.

[MrBill]

$this->bbcode_second_pass_quote('Doly', '')$this->bbcode_second_pass_quote('Steven Bratman', '
')Because it isn't possible to change just one variable in an economy, nor to try an experiment twice by starting an identical society under new rules, economic analysis is really the equivalent of observational evidence (economic records) combined with plausible reasoning (an economic model). In medicine we have seen that observational evidence combined with plausible reason can lead to conclusions that are the exact opposite of truth.

[Doly]

$this->bbcode_second_pass_quote('MrBill', '
')Do all 'hard' scientific theories bear the test of time?

[MrBill]

$this->bbcode_second_pass_quote('Doly', '')$this->bbcode_second_pass_quote('MrBill', '
')Do all 'hard' scientific theories bear the test of time?

[jdmartin]

In my opinion, the biggest fallacy in economics is the widespread belief that it's something mysterious and complicated, akin to "the force" from Star Wars. Of course, economic professionals, business leaders, etc perpetuate this belief, because if the cold, hard truth was able to smack people in the face it could easily start revolutions.

Two or more people trade goods or services with each other - you have an economic system. Money? An agreed-upon medium of value, sort of like "the rules" of the game. Markets? A legal gambling institution in which you hope that your bet outpaces inflation or that you can shill it off onto some other poor sucker for more than you paid. Inflation? The natural manifestation of greed (i.e., being able to charge more for something because you can) at the absolute root of the system.

There are minor variations on all of the above, and ways in which non-human factors influence the above (i.e. increasing the price of a commodity because you will shortly be physically unable to procure the item), but that is about the sum of it.

This is why it doesn't take a rocket scientist to figure out that, ultimately, without major changes to the current ways of doing things, the economy is screwed (both here in the US and eventually worldwide). There can be no economic activity without goods or services being exchanged. If "money" is the agreed-upon medium, and few people have money, then economic activity will decrease or desist. We pretend in the US that the economy is doing great by giving the Chinese, Indians, etc a little bit of money so they can exchange it for services, while the majority continue to rake in everything. Think about it - if John Doe went from making $20 at the factory to $7 at Wallyworld, his ability to participate in the economy has been reduced. He makes up for it by borrowing money from the future to continue to participate at today's level. As long as he can do that ad infinitum, he's OK. But what happens when the day comes that he can't? He effectively ceases to be part of the economy. Multiply that by hundreds of thousands of John Does and think about it.

The logical fallacy in economic analyses is that you can withdraw massive amounts of medium from the masses and maintain an effective economy that is inclusive of the overwhelming majority of the citizenry. The eventual outcome of that path is revolution, chaos and anarchy (see France 1789 & Russia 1917 for good examples).

[bobcousins]

I've seen this argument before that 'hard' sciences are so much better than economics and that economists are innumerate unscientific fools, but it is complete BS.

Both engineering and medicine are a lot more ad hoc than anyone thinks. There are many, many examples in both fields of techniques that have developed by trial and error. By no means do they scientifically prove everything they do - it is just not cost effective.

Science and resulting technology has excelled by concentrating on systems that behave in a fairly simple, linear fashion. When it comes to complex non-linear systems, like predicting the weather, they face the same problems that other complex systems have, like economics.