Type: Definition Essays
Sample donated: Barry Dixon
Last updated: April 21, 2019
Economics is commonly classed as a social science.
It is subject which is not comparable to any other. It is very difficult to place economics is one category as its roots lie in several different fields. Most definitions agree that a science must generate models that accurately predict real life outcomes. They also agree that these models must be testable. Nobel prize-winner Maurice Allais stated that the “essential condition of any science is the existence of regularities which can be analysed and forecast”. To find out whether economics is a science we must find out if the subject generates such models.Much debate has gone into whether economics generates such testable models. Philosophers such as Popper and Kuhn had different ideas, but neither could convincingly explain how scientific knowledge is obtained.
Popper believed scientific knowledge must be testable empirically. He had the Platonic view that if a theory can be refuted then we can be sure that it is not true. A theory that is tested empirically and not refuted is retained and gains credibility, but not accepted as fact. He also believed that if predictions are falsified then the theory should be abandoned. Kuhn’s views are discussed later on.The big problem with economic models is that they are dependant upon the actions of individual people. Individuals can be chaotic in their actions.
This would mean that it would be impossible for an economic model to predict a real life situation, as it is impossible to successfully predict what each individual will do in a given situation. This would mean that economic models are incapable of predicting anything with any certainty. According to this information this would mean that economics is not a science, as its models do not generate predictions that carry any degree of certainty.However, although it is near impossible to predict the actions of an individual in a given situation, it is possible to predict the actions of a larger number of people. This requires the use of the law of normality. This states that as the number of people increases, the large-scale properties of the population tend to a normal distribution.
This distribution does not show the position of each individual and therefore does not show the properties of each individual, but it does accurately show the overall distribution of the population.The normal distribution is symmetrical, which means that the extremities cancel each other out. The law of normality and the normal distribution allow the collective behaviour of the population to be predicted with some degree of certainty, which means that economic models can be accurate and therefore worthwhile. Economic models are often said to be variable and dependant upon numerous assumptions.
These variables and assumptions are said to be variable from economy to economy and from one time period to another. These are known as socio-historical factors.However, in science it appears that there is only one model which has no assumptions and is valid for any given time period or circumstance. However, this is not always true. An example of this is demonstrated by the transition from Newtonian mechanics to Einsteinian mechanics. After 300years of the dominance of the laws of Newtonian mechanics, they were totally replaced by Einstein’s laws.
The base of physics was totally changed in 1915 when it was discovered that inherent assumptions of physics were not valid at the quantum level.This shows that science demonstrates the same problems that are associated with economics. This is the way the philosopher, Thomas Kuhn believed that progress was made and scientific knowledge was obtained. Kuhn argued that with benefit of hindsight that science, as a human activity is heavily influenced by sociological.
Kuhn believed in a cyclical process of obtaining scientific knowledge. This first part of this cycle would be a period of chaos (anarchy). During this period of chaos some methods would begin to appear more successful, which would lead to some agreement.People would then start to identify with a particular theory/ set of theories. This agreement would lead them to ask similar questions, confront similar problems, and employ similar methods to solve them.
This would a period of normal science in which there would be a dominance of one type of idea, a paradigm. Problems would be found and solved and so progress is tangible. At the present time, the dominant paradigm in economics is neoclassicism. The basic concepts in (neoclassical) economics in are marginality, rationality, maximisation and equilibrium.All of these terms are scientific in origin or at the very least suggestive of scientific rigour.
All of the founders of neoclassical economics (Edgeworth, Jevons, Pareto, Marshall) had mathematical/scientific training, showing that neoclassical economics has its origins in science. Mirowski stated that “the rise of energetics in physical theory induced the intervention of neoclassical economic theory by providing the metaphor, the mathematical techniques, and the new attitudes towards theory construction”, showing that neoclassical economic theory was appropriated from mid-nineteenth century physics.At the present time neoclassical economics remains the paradigm, and its origins lie in the physical sciences, adding weight to the argument that economics is a science. Although neoclassical economics has its origins in science, to make sure it itself is a science we must find out whether it shares the same aims as the physical sciences, to abstract, theorise, explain, predict and control. To varying extents economists attempt to do all of these. Economic models by definition are theoretical abstractions, from them are derived predictions about future events.
Predictions are tested against real world outcomes in order to judge the validity of model. Good economic models make good policy guides, and the ultimate goal of economic policy is to exert control. The instrumentalist argument that a theory should stand to fall by its predictive capabilities is common amongst economists. Modern economic method seems to share many properties with scientific method. Economic method appears to be deductive, as core concepts are used as a basis from which to generate theory, models and hypotheses.Both scientific and economic methods are empirical as real world data is collected and utilised for the purpose of testing theory. Economists like to believe that economic method is objective, i. e.
it is value free. Economic method seems to be logical, as the widespread use of mathematics requires that models have an internal logical structure, without a logical structure a model would not generate predictions that are worth testing. The modern face of economic method shows that economic method is critically open, so that theories that generate hypotheses that are found wanting after empirical testing are abandoned or modified.If this is actually how economics is done then there is a very strong claim to scientific status. However, there have been critics of the method employed by modern economists. Critics of modern economic method have argued that the core concepts used to generate models have not undergone sufficient empirical investigation, so that the theories generated are not reliable.
Another argument levelled against economic method is that economic data is difficult to collect and is almost always subject of some definitional dispute, so it is not accurate at testing a theory.An argument against the supposed objectivity of economic method is that there is doubt to whether objectivity can be attained by any individual in a social context. Finally, economists infamously do not typically abandon their theories as soon as counter evidence appears, so this seems to show that economic method is not critically open. Although neoclassical economics, the paradigm at the moment, seems to be scientific in its method, alternative theories appear to be much less scientific.
A critic of modernist economics, Deirdre McCloskey argues that economists use rhetorical methods to argue their point of view in a variety of ways, many of them literary and non-scientific. These methods include debating and persuasion. However, another alternative theory, the “Austrian” approach, is far more analytical and places its emphasis on understanding as well as observation and therefore is more scientific. Overall, I think that at the present time economic is a science, as the dominant paradigm is neoclassicism. The strand of economics is scientific.
However, other theories such as McCloskey’s rhetorical approach are literary and therefore non- scientific. This means that economics can float between science and non-science depending upon the dominant paradigm of the time. However, economics has one property that no other science exhibits, the ability to control.
Other scientists have to be content to observe, while economists are able to control and build up an economy from its building blocks. This leads to the conclusion that economics is “no more than on the edge of science”. So economics at the moment is a special type of science.