Thursday, February 26, 2009

Is Economics a science?

I was listening to a Dennis Prager podcast where he said that the most important lesson he ever learned about Economics was that it wasn't a science.

I then read this article written by the famous Economist John Maynard Keynes on the Great Slump of 1930 where he said Economics was almost a science. (Incidentally, I found the Keynes piece at Project Gutenberg Canada.)

So what is a science? I can remember this definition of where one tested hypothesises. Now, Economists don't have labs to conduct policy experiments. So on that simple premise, I would have to say Economics can't be considered a science.

So what it is? It is a legitimate field of study. But because it is not able to conduct experiments and it is a study of very complex phenomena which are everywhere and yet unseen, it will always give charlatans opportunities to spout on matters of which they have no knowledge. Maybe, guys like me.

I suppose Economics to be like a documentary film, which purports to show real life, but is in fact almost always a case of the observer affecting the observed and so the observation, or the prediction of what will happen having an effect on what does happen so that the prediction negates itself.

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