Comment by brc | Hacker News Reader

Comment by brc | Hacker News Reader

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Good comment - I remember while studying economics (a subject I have always enjoyed) I got into an argument with some fellow students who felt that it was too 'fluffy' and 'not enough meat'. They wanted to do equations and get hard answers.

The truth is that Economics is the study of choices in a world of limited resources, and that the process is exactly as you have said : observing initial conditions, material decisions and subsequent outcomes. It is, as laid out by Adam Smith, also dependent on certain initial inputs (theory of moral sentiments) which produce rational actors.

The amusing thing for me is that, despite repeated tests and outcomes, people continue to think that they can wander off the reservation and get better outcomes with the same humans by trying different things to try and control the flow of limited resources. The results are rarely pretty, but the siren song of being able to improve things and be hailed a hero draws people into thinking the rules do not apply.

Krugman wandered off the reservation a while back and hasn't been worth reading since at least 2008.

The point is, you don't have to agree on economic policies to agree that it's not a hard science and shouldn't be treated as such.

2008? That's a coincidental year. Around about the time of the last crisis and the beginning of austerity politics. The worst economic period since the Great Depression arguably. The rich getting ever richer. Real wages for most people stagnating or falling. Massive unemployment and under-employment. Quantitative Easing not creating real jobs and fixing infrastructure. Low interest rates (still!) Multinational corporations with so much money through tax evasion schemes that they literally don't know what to spend it on. The ongoing privatisation of public services which rarely if ever benefits the public. Essentially, ongoing class warfare and levels of inequality not seen in practically a century. Regulatory and political capture and political collusion. Trade agreements on the horizon being negotiated in secret that would exacerbate every issue already mentioned.

And you say Krugman has wandered off reservation? Rubbish. He's got to keep banging the same drum because nothing's getting fixed.

We recently had a parliamentary election here in Denmark, and economic models featured rather prominently as arguments on both sides. One particular party would consistently refer to the economic model they used as a "calculator", which obviously in most people's mind is something that cannot be wrong. This went unquestioned and even seems to have caught on.

Indeed, what is funny that while resources are limited (and declining), economics are still considering as resources were unlimited. This video has a great re-interpretation of what economics really are, just managing energy in a productive system: https://www.youtube.com/watch?v=3w6ruZ_5nPE

The best part about Krugman is reading real economists try to figure out how to deal with him. Mostly they try not to engage, but every now and then you'll see several try to band together to "patch up" some statement he's made that's out of line (in their minds). Always a mistake.

It is not a hard science, but out of all of the soft sciences, I think economists understand just how tenuous their situation is. This is probably because they are using very hard tools to get a handle on a very fuzzy situation.

ADD: One of the bad things over the past 10-15 years has been the use of economics as a political weapon. It was bad enough when professors got stuck in one system or another and you had to wait an entire generation for new ideas to take hold. Now you're seeing a lot of laymen using economics as a way of arguing politics. Doesn't matter to me one way or another what kind of politics people have, but at least if you're an academic you have some notion of the realities of this field of study. In political discourse it's all just throwing dog poop around and supporting your team. That's going to make the serious study of economics even more difficult in the years ahead.

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