Hacker News Reader

Comment by magicsmoke | Hacker News Reader

Economics is a post hoc explanation for how the market works. It's not like somebody came up with the theory of how a market should work and then built one, like you would a computer. Rather, markets existed back in the middle ages before economists did, increased the wealth of its participants, and economists later appeared to explain why that was the case. Nowhere is the prerequisite that this system is the result of logical design.

View on HN

<Theory X> is a post hoc explanation for how <Subject Y> works. It's not like somebody came up with the theory of how <Subject Y> should work and then built one, like you would a computer.

General relativity is a post hoc explanation for how large-scale spacetime works. It's not like somebody came up with the theory of how the universe should work and then built one, like you would a computer.

Darwinian evolution is a post hoc explanation for how life forms change over time. It's not like somebody came up with the theory of how life on earth should work and then built one, like you would a computer.

Those are good analogies (if more precise and more easily testable than is typical in the social sciences), but the framing suggests you don't believe they are.

I read as OP believes examples are common enough, that saying it, is the same as not saying anything at all.

The difference being that we've already gotten past the point of thinking that Darwinian theory should dictate human lifes. A lot of political energy is invested in keepingn them the way particular theories say it ought to be based on certain economic theoretical criteria.

You wouldn't kill the baby of a Tiger/Lion simply because your textbooks say it's not genetically feasible (glossing over the fact that it's simply not been observed before).

You're not wrong, but I don't think the person you're replying to is suggesting otherwise, they're just commenting on the assumption in many economic models that participants are rational actors that make logical decisions.

Utility maximizing decisions. The efficient markets 'hypothesis'

This is one of those points that gets misrepresented and then straw manned way more often than not... like fiduciary duty to shareholders.

Economists don't think people are always rational or logical.

Economics, especially Behavioral economics, is Descriptive, not prescriptive.

Classically (read: what I was taught in AP Econ 15 years ago), "normative economics", which is prescriptive and meant to inform policy, is divided from from "positive economics", which attempts to describe and rationalize economic activity.

https://en.wikipedia.org/wiki/Normative_economics

Someone should tell the MMT people that

There were economists in the middle ages. Ibn Khaldun, Maimonides.... Even before then. I believe Rome hanged (or crucified maybe) a whole generation of them during the crisis of the third century.

You can go back to Hesiod's Works and Days around 700 BC for economic analyses.

Reply on news.ycombinator.com