When Will Economics Become a Science and be Able to Explain the Past?

[william the wie]

Taking two different sciences as examples of how this works: history and genetics; as explanations of what points I'm trying to make let me lay this out:

Genetics used to be a very simple science now there is three codon DNA in the chromosomes, four codon DNA in the mitochondria, RNA codons in the ribosomes, shaping proteins, epigenetics and metagenetics. Now the hopeful monsters and similar just so stories are becoming less common.

History used to be all fact based just so stories but then came "Plagues and Peoples" and "The Columbian Exchange" The rise and fall of nations and civilizations are now explained in terms of population numbers and their exponential curves with or without such concepts as relative fragility.

Since supply and demand was understood before Adam Smith how soon will the debates about what "really" caused the Great Depression 80 years converge on a more limited explanatory model:

The polio, swine flu and syphilis epidemics vs. Soviet mismanagement of Agriculture and the overselling/overuse of the US farmbelt, for example?

 

[EdwardBaiamonte]

what "really" caused the Great Depression

bad monetary policy. Bernanke knew this lesson well and used its wisdom to prevent the recent housing collapse from turning into another depression. Do you understand?

 

[usmbguest5318]

In all likelihood, never. Economics is a forward looking discipline. Individuals seeking a backward looking analysis should look to accounting -- forensic accounting in particular.

Whereas economics is a social science, accounting is a trade. It's not a science at all.

• Is Economics a Science? College Economics Topics | Library of Economics and Liberty
  
• Is Economics a Science?
• Is Economics a Science?

 

[EdwardBaiamonte]

Economics is a forward looking discipline.

actually, lots of economists spent their whole lives looking back at the Great Depression. Sorry

 

[usmbguest5318]

Economics is a forward looking discipline.

actually, lots of economists spent their whole lives looking back at the Great Depression. Sorry

Those people would be economic historians. That field of study is performed by both economists and historians, but such exercises do not define the primary role or purpose of economic study and innovation.

 

[EdwardBaiamonte]

Those people would be economic historians. That field of study is performed by both economists and historians, but such exercises do not define the primary role or purpose of economic study and innovation.

BS of course if Bernanke had not spent his whole life understanding the Great Depression we'd be in the middle of another one right now!!

 

[usmbguest5318]

Those people would be economic historians. That field of study is performed by both economists and historians, but such exercises do not define the primary role or purpose of economic study and innovation.

BS of course if Bernanke had not spent his whole life understanding the Great Depression we'd be in the middle of another one right now!!

You clearly don't understand what Dr. Bernanke has spent his life doing. I suggest you take a look at the topics of his papers. You will find that he has written some papers about the Great Depression, but they are not what he primarily examined. His last paper on the Depression was published in 1996.

Yes, he developed an understanding of the Great Depression, but the man, like most people with advanced degrees, and especially doctoral degrees, is not a "Suzy One Note." Everyone with a PhD. in economics will have a very deep understanding of the Great Depression; it is part of the learning one must acquire on the road to obtaining that degree. The man has a deep understanding of many things; the Depression is just one of them.

I'm not at all asserting that understanding the economics of the Depression, or economic history in general is not part of economics. I'm saying it's not the part of the discipline that constitutes the science of the discipline. As a disciple, economic history is a small part, and mastering the lessons of economic history, though important, isn't the primary focus of the discipline.

Economics is the study of scarcity and choice. As such, yes, part of that study involves understanding and explaining the past so that the lessons of it can be used to inspire thought about the present and the future. One example of how economists use the lessons of the past to predict the future is found in the empirical economics endeavor to model various public policy scenarios. The learnings about the past are used, in part, to develop econometric models.

Economics' primary aim is to describe current and future behavior and the overwhelming majority of the economics discipline is predictive in purpose, though it is also true that each of those sub-disciplines, as part of developing their predictive models, looks at and endeavors to understand corresponding historical antecedents. The role of history is not, for economists an "either-or" thing; it's an "also" thing, and occasionally the economic history itself is "the" thing. I suppose the easiest way to understand what I'm saying is to think of economic history and its understandings as a tool, as a means to an end more often than it being the end itself.

 

[Correll]

Taking two different sciences as examples of how this works: history and genetics; as explanations of what points I'm trying to make let me lay this out:

Genetics used to be a very simple science now there is three codon DNA in the chromosomes, four codon DNA in the mitochondria, RNA codons in the ribosomes, shaping proteins, epigenetics and metagenetics. Now the hopeful monsters and similar just so stories are becoming less common.

History used to be all fact based just so stories but then came "Plagues and Peoples" and "The Columbian Exchange" The rise and fall of nations and civilizations are now explained in terms of population numbers and their exponential curves with or without such concepts as relative fragility.

Since supply and demand was understood before Adam Smith how soon will the debates about what "really" caused the Great Depression 80 years converge on a more limited explanatory model:

The polio, swine flu and syphilis epidemics vs. Soviet mismanagement of Agriculture and the overselling/overuse of the US farmbelt, for example?

It will be a while. I would love to see such a day.

The computers needed would be incredible.

 

[EdwardBaiamonte]

You clearly don't understand what Dr. Bernanke has spent his life doing. .

Mr. Bernanke replied, according to Mr.Gertler. “If you want to understand economics, study the biggest calamity to hit the U.S. and world economies.”

Mr. Bernanke’s fascination with the economic earthquake never abated. “I am a Great Depression buff, the way some people are Civil War buffs,” he wrote in 2000. “The issues raised by the Depression, and its lessons, are still relevant today.”

Mr. Bernanke’s interest in the Depression, which dates back to his childhood, is a guide to the evolution of his thinking. In particular, his groundbreaking research on how mistakes by the Federal Reserve compounded the catastrophe is likely to influence how he steers the economy once he succeeds Alan Greenspan as its chairman early next year.

 

[EdwardBaiamonte]

I suppose the easiest way to understand what I'm saying is to think of economic history and its understandings as a tool, as a means to an end more often than it being the end itself.

sounds like ultra trivial gibberish at best. We think of economic history to learn that libsocialism killed 120 million souls and will happen again if we don't stop modern libsocialists.

 

[usmbguest5318]

I suppose the easiest way to understand what I'm saying is to think of economic history and its understandings as a tool, as a means to an end more often than it being the end itself.

sounds like ultra trivial gibberish at best. We think of economic history to learn that libsocialism killed 120 million souls and will happen again if we don't stop modern libsocialists.

Pretty much anything one doesn't understand will sound like gibberish...thus why you think that. We appreciate your honesty, even if it's a bit circuitous.

 

[EdwardBaiamonte]

I suppose the easiest way to understand what I'm saying is to think of economic history and its understandings as a tool, as a means to an end more often than it being the end itself.

sounds like ultra trivial gibberish at best. We think of economic history to learn that libsocialism killed 120 million souls and will happen again if we don't stop modern libsocialists.

Pretty much anything one doesn't understand will sound like gibberish...thus why you think that. We appreciate your honesty, even if it's a bit circuitous.

whats worth understanding ??? your topic was ultra trivial and gibberish. Is there a person in the world who would think that was an important topic?? Again, you should think about how to prevent libsocialists from killing another 120 million souls with their economic ideas. If you focus on trivia you will be trivial. Do you understand?

 

[usmbguest5318]

I suppose the easiest way to understand what I'm saying is to think of economic history and its understandings as a tool, as a means to an end more often than it being the end itself.

sounds like ultra trivial gibberish at best. We think of economic history to learn that libsocialism killed 120 million souls and will happen again if we don't stop modern libsocialists.

Pretty much anything one doesn't understand will sound like gibberish...thus why you think that. We appreciate your honesty, even if it's a bit circuitous.

whats worth understanding ??? your topic was ultra trivial and gibberish. Is there a person in the world who would think that was an important topic?? Again, you should think about how to prevent libsocialists from killing another 120 million souls with their economic ideas. If you focus on trivia you will be trivial. Do you understand?

....you should think about how to...

What I'm going to think about is not responding to you on topics of economics. I would appreciate your returning the courtesy.

 

[TrueTT]

Economics is aptly described as a "social science". I see no reason to change that. Why do you?

 

[yiostheoy]

Taking two different sciences as examples of how this works: history and genetics; as explanations of what points I'm trying to make let me lay this out:

Genetics used to be a very simple science now there is three codon DNA in the chromosomes, four codon DNA in the mitochondria, RNA codons in the ribosomes, shaping proteins, epigenetics and metagenetics. Now the hopeful monsters and similar just so stories are becoming less common.

History used to be all fact based just so stories but then came "Plagues and Peoples" and "The Columbian Exchange" The rise and fall of nations and civilizations are now explained in terms of population numbers and their exponential curves with or without such concepts as relative fragility.

Since supply and demand was understood before Adam Smith how soon will the debates about what "really" caused the Great Depression 80 years converge on a more limited explanatory model:

The polio, swine flu and syphilis epidemics vs. Soviet mismanagement of Agriculture and the overselling/overuse of the US farmbelt, for example?

It is better to first divide your world into Science, Philosophy, and Religion.

Religion is ancient and wicked.

Philosophy was the ancient Greeks' first attempt to free themselves from superstition and religion.

Science was invented by Galileo the moment he picked up his homemade telescope and pointed it at Jupiter. Data collection and inference are the two main tools of Science.

So anytime you are collecting data of any sort and then summarizing the data with an inference about them, you are being scientific.

 

[The Sage of Main Street]

Economics is aptly described as a "social science". I see no reason to change that. Why do you?

Prometheus Shunned, King Ape Atlas Crowned

It's defective and superficial because it misses the critical importance of developing the most productive human and natural resources. That failure, a toxic byproduct of a secluded and passive Ivory Tower, makes economics static.

 

[Picaro]

Since supply and demand was understood before Adam Smith how soon will the debates about what "really" caused the Great Depression 80 years converge on a more limited explanatory model:

The polio, swine flu and syphilis epidemics vs. Soviet mismanagement of Agriculture and the overselling/overuse of the US farmbelt, for example?

My favorite explanation is the stock market bubble began to suck real capital investment out of the economy, which caused a downturn in employment and decreased production that was measurable as early as 1927. The Rockefellers alone poured hundreds of millions into the call money market, along with many others, that went to buy worthless stocks in pyramid schemes with margins at 10% and no genuine equity behind the stocks. there were only a relatively few big players at the time, and when only few got cold feet and quit buying the boom shut down. Not much different than any other market glut, just a larger scale. The crash in 2007 was the same sort of bubble, and the bubble before that, and the bubble before that. Why risk investing in and managing real businesses when you can get 4% to 10% in the overnight money markets and sleep late, party all night?

The relatively new field of econometric s has a lot to recommend it as a study of variables and past behavior; not very predictive, though, except as being able to spot similarities with past behavior. Like Twain said:" History never really repeats itself, but it rhymes."

 

[EdwardBaiamonte]

The crash in 2007 was the same sort of bubble, "

Wrong of course.
1929 was a stock market bubble that when mismanaged led to a depression.

2008 was a housing bubble, caused by liberal govt's 132 programs to get people into homes the free market said they could not afford, which managed properly led to only a recession.

 

[Picaro]

The crash in 2007 was the same sort of bubble, "

Wrong of course.
1929 was a stock market bubble that when mismanaged led to a depression.

2008 was a housing bubble, caused by liberal govt's 132 programs to get people into homes the free market said they could not afford, which managed properly led to only a recession.

they are all basically the same; massively over-leveraged assets snowballing and running out of players. Not interested in the 'Dems Did It' nonsense. nobody made anybody hand out $300,000 mortgages on $20,000 houses; and nobody forced consumers to take them; the 'free market', and infinite greed, did that all on its own. nobody forced anybody to create unsound derivatives and bury crap mortgages into them and sell them all over the world, either, so you'll just have to go play with the other cultists and ideologues to get a pat on the head.

 

[william the wie]

The crash in 2007 was the same sort of bubble, "

Wrong of course.
1929 was a stock market bubble that when mismanaged led to a depression.

2008 was a housing bubble, caused by liberal govt's 132 programs to get people into homes the free market said they could not afford, which managed properly led to only a recession.

they are all basically the same; massively over-leveraged assets snowballing and running out of players. Not interested in the 'Dems Did It' nonsense. nobody made anybody hand out $300,000 mortgages on $20,000 houses; and nobody forced consumers to take them; the 'free market', and infinite greed, did that all on its own. nobody forced anybody to create unsound derivatives and bury crap mortgages into them and sell them all over the world, either, so you'll just have to go play with the other cultists and ideologues to get a pat on the head.

An actual D, Paul Krugman, did in fact explicitly call for a housing bubble 2000-3. While I don't so much disagree with your argument as find it over simplified a quick read of Brian Arthur's "Increasing Returns and Path Dependency in the Economy" could make it disprovable and therefore more Scientific. The housing bubble(s) were the result of Volcker breaking the back of inflation 1979-82 and in passing making the traditional S&L mechanism of financing mortgages obsolete. The tranche method of financing mortgages and the modern CDS Over The Counter market developed in the S&L 1975-1993 bubble. The 1991-2000 high tech housing bubble purportedly corrected the errors of the S&L model and then knowing a whole bunch of things that were not in fact known the economists, bankers and politicians marched off the cliff in 2003.

Among other things the sale of CDSs are not made in public markets so trendlines cannot be readily determined by all players. Blanche Lincoln saw her political career end fighting to correct this problem. Texas did not participate in either of the last two bubbles because they corrected other problems in 1990-3. Yet these two sources of off the shelf solutions to this problem have not yet been eliminated.