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Comment by ohgodplsno | Hacker News Reader

>You have to ignore 120 years of intellectual progress on economics to still want to apply labor theory of value to problems. There may be a day when we can achieve some semblance of a "socialist" mode of production

What an absolute load of crap. Economics as a whole is barely a science, at best a toy, and that multiple pathways exist is not an indictment of any theory. Marx's observations hold true all these years after, alongside the progress we've had.

You clowns would take a system as complex as, oh, simply the whole of human activity and try to reduce it to a few simple laws. Sorry, despite what you learned online, "supply and demand" is not a fundamental law of the universe. This is not physics. There are no simple answers. There aren't even proper answers. Every school of economics holds on barely by a thread. "Assuming a rational actor" is the "assume a spherical cow in a vacuum" of liberal economics.

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Economics itself is a reduction of human behaviour to resource allocation.

The underlying field of study of human action in general is called praxeology and was only seriously investigated by:

- Austrian school economists (1900s-present)

- Polish school philosophers (briefly in the interwar period, died out after WW2 when Lwów became Lviv)

I think wresting praxeology free of economics would be an interesting movement in philosophy.

I do not agree with the upper comment that economy is not a science. It is just a human science, where you could have different schools of thought based on different philosophies. But praxeology is indeed an example of something that is not science, as it rejects the scientific method and the empirism.

If economics is a science, how do you run an experiment?

Let’s say you want to see how phenomenon X scales as a function of population, and create a model X(p)

How do you set up N identical scenarios and, ceteris paribus, vary the population? You cannot.

Two separate nations are distinct systems. Setting up 2 identical factories next door, one with 100 staff and one with 1000 staff would be a monumental waste of effort, and what if the geographical separation, or airflow, or cloud cover, or… affected the experiment?

Let’s say you run a single economic experiment. How do you reproduce it? How does your counterpart reproduce it?

You do not create experiments. You create models that try to explain the world and check your model predictions and what happens in the world. When the two disagree, you update the model and try to explain what went wrong. As you cannot make experiments to check, it is inevitable that you will end with more than one model for different school of thoughts. As is in all academic disciplines that are part of humanities. This is not like in the natural sciences where you can agree with a single model. Nonetheless, this is better than having no empirism or scientific method at all and having models built based on some logical axioms treated as the ultimate truth, as some unscientific parts of the economy do.

Moreover, in the natural sciences, you also cannot perform experiments for some parts of cosmology, for example. Nonetheless, you keep creating models in the hope that they would allow you to discover and predict more things and to interpret better the universe. If they do, your model clearly shows some benefits, even if in the future with more powerful technology, it could be disproved. Economy do not need to be so different than this.

>Nonetheless, this is better than having no empiricism or scientific method at all and having models built based on some logical axioms treated as the ultimate truth

Like theories built on mathematics or logic?

Don’t get me wrong, I’m not shilling Austrian economics and I disagree with most assumptions of pure rationality, but I think an axiomatic approach to human decision making is not necessarily a bad thing. I’m sure preferences and biases have some mechanism we can quantify and explain from first principles.

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