ECONOMISTS, THE NOBEL PRIZE AND THE REAL WORLD

I recently got into an exchange with a conservative friend on Facebook. He decided that economists John Maynard Keynes, Paul Krugman, and the "science" part of political science were not worthy of being taken seriously. Actually, it wasn't much of an exchange once I made it clear to my friend that his assertions were rooted in his general ignorance about the social sciences and the scientific method. 

What my conservative friend thought he was trying to tell me is that the hard sciences (physics, biology, etc.) are the only disciplines where we can find real answers. Then, losing sight of his suggestion that the social sciences aren't scientific, he claimed that his economists - Milton Friedman, Friedrich Hayek, et al. - are the only social scientists that we should follow because, you know, they're real scientists. Huh?

If my friends logic seems confused that's because it is. So, let's recap. 

For my friend economists John M. Keynes, Paul Krugman and the discipline of political science aren't scientific enough, and shouldn't be taken seriously. His economists and his political beliefs, however, are the real thing. Ergo, everyone should listen to him.  

Since it was obvious that my friend didn't really understand what science entails I decided to expose the absurdity behind his claims. It was fun, which is why I'm sharing the discussion below (with a few edits).

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To begin with, the "science" in political science, or any other science for that matter, lies in the method, not in the certainty of outcomes. Those who found cures for influenza did not find answers the first (or the second, or the third, or ...) time around. They found cures using the same painstaking processes that eliminated confirmation bias and false positives, among others. 

It's the methods used that make the social sciences - and the hard sciences - scientific. There is no escaping this. 

Whether you're trying to understand how markets behave so you can make investment decisions, or are trying to understand the causes for war so you can reduce the proclivity towards it, there is a certain process that you must follow (as I discuss here). A good political scientist, for example, can explain to you the causes for war and the characteristics behind empire cycles, for example, but we can't tell you exact dates when wars will start, or when the American empire will end in the future (and it will). 

Political science, like all social sciences, is not an exact science. But we also want to keep in mind that, in spite of incorporating more math into the discipline, the field of economics is not an exact science either. It never has been. 

So, if you have a friend that likes to claim that Friedrich von Hayek and Milton Friedman - or any other economist for that matter - offers irrefutable evidence of how the world works (or should work) let them know that their arguments can be debunked with good counter arguments. In fact, here are a few good counter arguments for your Milton Friedman fans (in the FYI category, the arguments of Ayn Rand, who was no economist, are based on pure fantasy).

To give you an example of how unscientific the field of economics is let's think about the Nobel prize in economics (a farce if there ever was one). 

The Nobel committee has given the Nobel prize, in the same year, to economists who made opposing arguments about the same economic phenomenon. Twice. 

Can you imagine two geologists getting the Nobel prize, one for explaining the logic behind tectonic plates and the other for explaining God getting mad at America's lifestyles and causing earthquakes? 

I agree. It's an exaggerated example, but you get the point. Economists are social scientists who disagree about so many things that claiming absolute certainty for their findings is pure fantasy, especially if you don't incorporate what the political scientist - and other social scientists - have to say on the issues they study (which is what makes Keynes, and now Krugman, superior on these matters). 

So, yeah, economist Friedrich von Hayek and Milton Friedman may offer us evidence of their findings. But being economists does not necessarily mean that what any economist has to say explains the real world any better than a political scientist or a political economist.

The Nobel prize in economics does nothing to alter this reality. 

- Mark

FYI Category: In 1974 Sweden's Gunnar Myrdal (planned economies) and Austria's Friedrich von Hayek (free markets) won the Nobel Prize in spite of making opposing arguments about markets.  Most recently Gene Fama (stock prices reflect worth, or real value) and Robert Shiller (stock prices reflect confidence, and psychology) became Nobel laureates in spite of telling us two entirely different things about stock prices.