Thursday, January 06, 2011

Is Economics a Science? Is Biology?

Friedrich Hayek once said: "The curious task of economics is to illustrate to men how little they really know about what they imagine they can design."

This quotation concludes an excellent blog post at "Cafe Hayek" by Russ Roberts. He argues that economics is not a science in the same way that mathematical physics is a science, because economics is more like Darwinian biology in that it tries to understand social systems that are too complex and contingent to be reduced to mathematical models that have any precisely predictive power. The failure of macroeconomists to predict the Great Recession or to predict exactly the consequences of present economic policies designed to bring recovery illustrates this point.

This is a good statement that reinforces what I have said about the "lawlessness" of the social sciences, which is shared by the life sciences. This also reinforces my arguments for defending the ancient understanding of prudence and practical judgment against the delusions of the modern dream of a fully mathematicized science.

Thinking through some of these questions will be the concern of my forthcoming Liberty Fund conference on "Hayek and the Problem of Scientific Knowledge."

A related post can be found here.


Troy Camplin said...

Stuart Kauffman makes the argument for lawlessness driving complexity in his Reinventing the Sacred. I'm not so sure. There seem to be several laws which result in self-organization -- the power law being one of them. Information theory, networks, far-from-equilibrium states, strange attractors, edge-of-chaos states all end up with essentially the same descriptions. What, then, is going on? There seems to be an underlying law of nature.

W. Bond said...

I keep hoping some Monday will bring me Arnhart interviewed on Econtalk.

(I suppose I should post that comment on his blog, however).