Five responses to a single post, it's a Gimpei record! I have challenged you reader. Do you feel your mind expanding? It's because I'm blowing it! Hmm... that didn't come across right. Anyway, the debate seems to have progressed. Take the latest response:
We can predict the economy with much better precision than we can the weather: ie. I can tell you roughly what the economy in China will look in 6 months far more accurately than I could the weather -- even taking into account seasonal variations! So there goes meteorology.There are two fundamental problems with this comment:
1. I never said that predictive power is necessary for something to be a science.
2. Meteorology is a terrible example.
Let's start with problem number one. In the previous post I was giving reasons for why according to Popper economics is a pseudoscience.
In fact, I disagree with Popper on most points and think he's a terrible model for all sciences. Late Popper lets up a bit on the strict falsification criteria. However, he never managed to get around Kuhn's critique: if Popper's methodology had actually been followed, many of the our greatest scientific discoveries would never have been made. Popper's disciple, Lakatos, tried to deal with this problem; unsuccessfully in my opinion, but that's another story.
As for the content of the comment, predictive power is obviously not a prerequisite for a science. If it were, evolutionary theory, geology, etc wouldn't be sciences. Not even Popper would go that far. He just really disliked Freudianism and Marxism.
My point was that, from the point of view of Popper, for economics to be a science, it has to be possible to falsify any assumption. I argued in the previous post that there were certain privileged assumptions about consumer behavior that are immune to falsification: they aren't questioned when macro models fail and they aren't questioned when lab and field experiments suggest that people actually behave completely differently. There's actually a paper written by Popper where he tries analyze economics and its pretty entertaining to see him dance around the obvious conclusion that, by his criteria, it is a pseudoscience.
On to part 2: Meteorology is a stupid example.
You can predict the weather in six months with greater confidence than the state of the Chinese economy. In six months time, we have a pretty good idea that the temperature will be in a certain narrow band in China.
If only business cycles were as easy to predict as seasonal changes. China just posted a 20 million drop in employment! In six months, they could be sitting pretty or tanking. Are you clarevoyant or just exhibiting an overconfidence bias?
More fundamentally, Meteorologists aren't in the same position as macroeconomists since the science of meteorology on the micro-level is pretty sound. Last time I checked, we didn't have 30 years of experiments undermining the laws of thermodynamics!
Game, set, and match. Keep the comments comming; they grow more sophisticated by the minute. If you're lucky I may even tell you where Milton Friedman got it the most wrong (hint: it has nothing to do with free markets).
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