Now this fellow today said:
Some people distinguish between soft sciences like economics, and hard sciences like physics. I don’t understand that distinction. Are physicists very good at predict earthquakes, tornadoes, heat waves, etc? Obviously not. Some people claim that those events belong in geology or meteorology, but not physics. My response is that physicists claim that their models explain those phenomena, so we have just as much right to expect them to predict tsunamis as we have to ask economists to predict recessions. Indeed even more of a right, as economics has a sort of Heisenberg uncertainty principle, which says that (demand-side) recessions should not occur if they are expected.
Economics can predict some things very well and other things not so well. The more complex the system, the less well we predict–just like physics. I predict that bond prices will be unusually volatile between 8:30 and 8:35am on the first Friday of each month over the next few years. But our most useful predictions are conditional forecasts.
Now frankly I have no idea what he is saying. You see he may very well not have any idea himself, most of these fellows seem to be that way. Science is the study of natural phenomenon and the building of models to be able to consistently predict those phenomenon.
Now we do not have all the answers. Like earth quakes, and that global warming climate change thing that everyone has been talking about. But say nuclear reactions, we have them down pretty good, those electromagnetic wave things, you know the stuff we use in those ipod thing a ma jigs, well thanks to Maxwell we have that stuff, and that fluid flow stuff, you know pipes and all, again we have that stuff down. Now DNA and the genetics stuff, well we have some spotty areas, in fact we are still learning. And that cancer thing, really tough thing that cancer, but we seem to be making progress. There is no little fellow at Princeton writing nasty thinks in the Times every few hours in that area. They are too busy doing real stuff.
So is there a real science, you betcha folks, especially if you know what you are talking about.
Now is economics a science. No way. It is a political science discussion club hidden behind a mass of useless equations. You see, I wrote many of those equations when they first came out and then used them carefully in real engineering stuff, and it worked, sent men to the moon, really did.
Now as to the fellow's claim that economics can predict bond prices, well so can any damn fool who sits on his behind and watches every day. That is not science, it is people watching. Now finance is different, those folks actually make money, if they don't the get fired. Ever hear of a fired economist? No they become government employees or professor type fellas.
So when I read this it is really wishful thinking. If elephants had wings, well I still think the would not fly!
Now, having said all of the above, it is essential to remark that this seems to apply to American economists only. The Canadians do not seem to expel this hubris, the Europeans seem less. Economists are in many ways like ships boiler room operators. They know where some knobs are and which way to turn them. They have seen what happened in past ventures and respond by turning the knobs one way or another. Science, no, technique, yes.
You see there is technique, knowing what can be done, what may have worked in the past, and giving it the good old college try. That is not science, you are flying blind oftentimes, but many a ship's engine officer, or chief, has gotten the vessel there safely. They do not want to view themselves as Einstein however.
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