After reading Robert Shiller’s article “Is Economics a Science?” I really wish I had chosen the behavioral economics group to study. It just makes a lot of sense to me. This article was a pretty easy read but Shiller makes some great points about the scientific status of economics.
First of all I find it ridiculous that the very first thing Shiller says in this article is “I am one of the winners of this year’s Nobel Memorial Prize in Economic Sciences…” Now I have never met Robert Shiller so I do not want to judge him but normally when someone starts any conversation with “I won the Nobel Prize” you can’t help but think that they are a little full of themselves. But I am not going to take too many points off for that because I like everything else he says.
Economics is commonly criticized by the scientific community as a pseudoscience. Economics is heavily focused on policy rather than the discovery of fundamentals. Policy is affected by politics and politics are affected by public attention and public attention is affected by human behavior. It is a challenge to make economic models for the human element of the economy since people change their minds often and for various reasons. Hence, a lot of approximation is needed in economic models. Critics claim that economists use math as to make economics look scientific but it is really all for show.
Shiller points out that the hard sciences and other research fields are subject to the same challenges and criticisms as economics. Lee Smolin wrote an entire book criticizing the development of string theory in Physics for not being based on anything testable. Shiller asks why is the Nobel Prize in Economics Sciences instead of just plain Economics? Apparently the word “science” is added to any field that is trying to distinguish itself as a truly scientific field as opposed to a bogus counterpart. Think the difference between Astronomical Science (Astronomy) and Astrology. One is considered true science while the other is not. So are there two different types of economics? One field of economics wins Nobel Prizes while the other doesn’t? What is the deciding factor?
Shiller only poses this question providing the arguments for or against economics as a science. I like that he leaves off saying that economics still has to develop and become stronger. Its refreshing to hear that after 200 or so years of economic thinking, we really have no idea what were doing.
I feel like Behavioral Economics is the Miley Cyrus of the economics world. Its young and new and fresh but doesn’t yet know its place in the world so it does a lot of crazy things that make the older folks freak out. Yet, even with all the criticism it still manages to make a statement. After all, there is no such thing as bad publicity.
Anyway I am finding that I really like Behavioral Economics and I will definitely be reading more by Robert Shiller.