Jonathan Newman looks at what is afflicting Famous Economists ( Paul Krugman).
There’s a new trend among famous economists, from Krugman to Cowen. It was started by Adam Ozimek with a simple question: “Has a single economics study changed your mind on an important issue?” Economics as a field of study has been branded “too ideological” with warring camps defending dogmatic fortresses as opposed to unbiased, independent scholars carefully testing theories and reporting their results and methods for replication by others. As a result, many economists are answering Ozimek and pointing out the times they changed their views in light of new findings.
The Economist says they are defending the profession, but the trend really shows just how unscientific and ideological mainstream economics has become.
Economics and Science
According to The Economist, the trend is just one more step toward the goal of unbiased, non-ideological economic science:
But even if economics is not uniquely ideological, its biases are often more salient than those within chemistry. Economists advise politicians on all manner of important decisions. A reputation for impartiality could improve both perceptions of the field and the quality of economic policy.
Of course many of these mind-changing moments involve dropping even the simplest and fundamental results in economics for platforms for increased state intervention. Krugman, for example, cites his turn on minimum wage laws after he read the famous empirical paper by Card and Krueger and others. He doesn’t explain why the standard theory is wrong, just that it must be wrong because the data say so.
The Logic of Action
Economics is also a science, but the subject matter for economics is categorically different. Humans can choose. This very fact actually serves as the basis for the entire structure of economic theory. Recognizing this point is critical for selecting and preserving an appropriate method for economics.
The Place for Data in Economics
Laboratory experiments and real-world observation cannot somehow refute economic theory because economics deals in counterfactuals, which are never realized and cannot be observed in the real world.
This is not to say that good economists should ignore data. In fact, a good economist would revisit theory in the face of curious data that doesn’t seem to go along with theory. Also, economic history relies on the skillful use of data and theory to help explain events of the past.
Economic Ignorance, not Enlightenment
So, this new trend among prominent economists, far from defending economics as a science and a profession, actually reveals the unscientific and ideological proclivities of mainstream economics.
Readily dropping standard results in economics because the newest econometric trick revealed something strange with the newest data from the Bureau of Labor Statistics shows economic ignorance, not enlightenment. It shows that many economists don’t understand the fundamentals of economics and the logic of action.
When data conflicts with theory, the scholarly thing to do would be to find the source of the disconnect. This could be an error in the way the data were measured or an error in the application of the data to a specific economic theory. Of course, the theory itself could be wrong, too. Either way, some explanation is in order. An ideologue would discard one or the other without any reason except to maintain their own ideology or to switch ideological camps.
The above originally appeared at Mises.org.