Economics-science debate

Gideon Rachman’s regular weekly column in the Financial Times (FT) argues that it is time to: Sweep economists off their throne (registration required).

He writes as an historian determined to prick the scientific pretentions of economists. For him economics lacks the scientific rigour of physics while its predictive record is particularly awful.

To me Rachman’s critique is interesting but one-sided.  It is certainly a problem that economics lacks a historical dimension.  It focuses far too much on ahistorical models rather than attemption to grapple with the historical specificity of the topics it is examining.

However, the aspiration to science is not in itself misplaced. The problem is more its conception of science. It fails to recognise that in a social science the power of reason has to replace experimentation (since it is not possible to experiment with society in the same way as you can in a physics laboratory). Economics tends to search for mathematical relationships between different variables rather than grappling with the nature of the relationships. Its aim should be to maximise its explanatory power rather than forecasting.

There is also an interesting video debate embeded in the article in which Rachman discusses the topic with Martin Wolf, the FT’s chief economics commentator. Wolf argues that economics should be based on science – but it should be evolutionary biology rather than physics.