Wednesday, September 29, 2010

classical economics is not a science


This contains a great critique of classical economics.

"The classical theorists gradually adopted the math and some of the terminology of science. Unfortunately, however, they were unable to incorporate into economics the basic self-correcting methodology that is science’s defining characteristic. Economic theory required no falsifiable hypotheses and demanded no repeatable controlled experiments. Economists began to think of themselves as scientists, while in fact their discipline remained a branch of moral philosophy—as it largely does to this day."

Fortunately, there are people out there prepared to criticise the absurd assumptions of classical economics and keen to develop their own theories through the application of scientific principles.

Another couple of great quotes from this interview:

"More troubling still is the assumption free-market economics makes about nature: that we don't need it. Because everything is theoretically substitutable for everything else, when we run out of nature, we'll just substitute technology. That, says [Joshua] Farley, is a religious belief, not a scientific one."

"In ecology, if your theory is not supported by real life, you change your theory. In economics, if your theory is not supported by real life, you try to come up with policy measures that change real life to make it a closer fit to your theory."

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