From: serhody@rodan.acs.syr.edu (Stephen e. Rhody)
Subject: The rumor of "Death of America" is greatly exaggerated
Organization: Syracuse University, Syracuse, NY
Date: Sat, 9 Jan 93 01:36:29 EST

Unable to resist any longer, a grad student leaps into the fray.

Our story thus far:  

Is economics a science?  Is it engineering?  Is it a 
conspiratorial in-group designed to provide economists with access to the 
public trough?

I'm quoting and condensing here.
K.Wee's writing is prefixed with either > or >>>
T. Scott Thompson's writing has the prefix >>

K.Wee writes of economists:

>But they don't agree on basic economic questions like the effect of the
>debt and the (de)merits of supply side economics, which is what really counts.

and:

>Wait a minute.  Is it not true that practicing economomist disagree on
>basic economic questions (as I pointed out above)?  Is it not true that,
>when studying most economic issues, one gets different conclusions depending
>on which route of reasoning one takes?  


Most economists that I have met agree with each other more than they agree 
with just about anyone else.  Even economists who hold positions which 
appear to the public to be polar opposites can usually find some common ground.
Differences in politics are often more important than differences in theory.

>Doesn't sound like science to me.

Really?  There are plenty of instances in which scientists have disagreed
violently on fundamental principles.  For example:  Lamarckian genetics 
versus Darwinian evolution (Lamarck has been discredited of course, but 
evolution is a subject that is still not settled _today_.)  
Is biology a science?  Why can't these "scientific" biologists agree a 
fundamental issue like how genetic material interacts on this planet?  

>Is it not true that economics lacks meaningful fundamental
>laws or fundamental conventions that everyone agrees on?  That economists
>are not even trying to get this but indulge in their mathematical models of
>imaginary systems? That they have had nowhere near the level of
>uncontroversial contribution to mankind that science and engineering have
>brought?  

Contribution to mankind is difficult to measure.  Uncontroversial contribution
is impossible to measure because everyone has his own idea about how the world
"should" be.  Every science has fundamentals that people disagree on.  That's
what makes it science and not religion.

>That despite their funding by society, economists have not
>produced or tried to produce any real, working system that requires an
>economist's understanding, that ordinary people won't find intuitively
>obvious?  Where's all your higher math used?  Can you ever produce or advocate
>a real system or concept with more than a few easily comprehensible levels of
>abstraction?

Complexity and abstruseness are characteristic of bad science and hermetic 
cults.  If you want an example of a real, working system that requires an
economists understanding, try the United States.  Remember, you said
working, not working well :).  

>Can you ever make predictions that systematically come true as
>REAL sciences can?

Sure.  How about:

1.  If an individual spends a small percentage of his income on a certain good,
    and the price of that good increases, then the quantity demanded of that
    good will decrease.

Or:

2.  If the income of a middle class person increases, he will spend 
    proportionally less on food.

(N.B.  1. isn't a sure thing, because the income effect might outweigh the
       substitution effect, even for goods on which the individual spends
       a small percentage of their income, if said good is more inferior
       than anything yet observed.  This is unlikely.)

These may seem to be silly predictions to you, but can any other science make
predictions about peoples' choices?  I'm sure that physics can't.

>It's possible to argue that the state of the social "sciences" is a natural
>consequence of the fact that they deal with people.  

Exactly the point.  Physical science has come so much farther than other
sciences because it is by far the easiest to do.  Nothing could be simpler 
than searching for invariant laws governing the behavior of insensate objects.

>The bad news, however, is
>that you guys don't even TRY to improve this situation by starting to build
>foundations on which your future studies can be based (I know that would
>involve trying to convince real people and change the real world, but it
>goes with the territory).  

How exactly do you propose to do this?  Economics is the study of the choices
that people make in their everyday lives.  The word economics stems from the
word for housekeeping in Greek.  Who am I to say how others should live their
lives?  If someone chooses not to behave as my theory predicts, that's too bad
for me, not him.

>Instead, you guys carry out studies that resemble
>the natural sciences on the surface but are really quite different in nature.

Yes.  The biggest problem is that economists find it difficult to create their
own observations.  Much of the time economic research involves the use of
data from outside sources.  Proving a theory is impossible everywhere.
Disproving a theory in economics is also difficult.

>(And quite useless, as we've found out) By keeping this superficial
>resemblance, you have been able to attract most of your funding.  I consider
>this one of the biggest robberies in history.

Hardly.  My future salary will never come close to that of a member of the bar.
 
>THAT'S why it's hard not to get emotional, especially now that you are, in
>my opinion, about to contribute to the downfall of our economy and way of
>life through your silent complicity in the national debt.

Perhaps you would feel better about the debt if you read Koltikoff's book
entitled _Generational Accounting_.  The debt statistic is an accounting
convenience, not an absolute measure.  Furthermore, I never hear any of the
collapse theories explain what would happen if the United States
were to default on some of the national debt.  What other country offers 
a better marginal return on investment?  If one exists, why aren't people 
investing there, instead of here?

>This is not a question of variations of individual behavior within a group.
>On this level there is little.  Most of you guys may be good people, but you
>guys chose your profession and are answerable to society (which funds you) for
>what you do.

Society funds everyone for what they do.  You make your living doing something
at Oracle probably involving engineering and computers.  I make my living as
a grad student in economics.  Who is to say which of us is more "useful" 
(whatever that is) to "society" (whoever they are.)  I am in 
sympathy with your feeling that economists should try to use their knowledge
to make people better off (when they can do so without hurting others.)
I don't know of an economist who would disagree with Pareto improvements.

Steve