Economics is pseudo-science

brianthebard

asdasd wrote: »

Wrong. Even if the pecentages were true you wouldnt know anything about how standards of living were falling or increasing unless you know the full per-capita worrld income. World dgp is increasing at 5% y-o-y and most of it is going to China, India and other developing countries. ( China being a good example of a country that was piss poor under communism and abut 10,000% richer - per capita - under capitalism).

And even were it true that isnt what Marx claimed. he was talking about the capitalist class exploiting the proles, he has a "scientific" mechanism for this - the expropriation of surplus value ( i.e. profit). Since most people in "rich" countries are workers this cant apply.

Wrong how? They are World bank figures.
And since its true, its exactly as Marx said, using what you just posted.

That would be Lenin who ran an Empire for a while, ignoring the fact that Empires existed prior to capitalism. But he wasnt very bright.

Well Kwame Nkrumah said it too-not an Imperialist. But I thought someone like you might make the Lenin jump straight away.

asdasd

Wrong how? They are World bank figures.
And since its true, its exactly as Marx said, using what you just posted.

Wrong as in wrong

from here

We estimate the world distribution of income by integrating individual income distributions for 125 countries between 1970 and 1998. We estimate poverty rates and headcounts by integrating the density function below the $1/day and $2/day poverty lines. We find that poverty rates decline substantially over the last twenty years. We compute poverty headcounts and find that the number of one-dollar poor declined by 235 million between 1976 and 1998. The number of $2/day poor declined by 450 million over the same period. We analyze poverty across different regions and countries. Asia is a great success, especially after 1980. Latin America reduced poverty substantially in the 1970s but progress stopped in the 1980s and 1990s. The worst performer was Africa, where poverty rates increased substantially over the last thirty years: the number of $1/day poor in Africa increased by 175 million between 1970 and 1998, and the number of $2/day poor increased by 227. Africa hosted 11% of the world's poor in 1960. It hosted 66% of them in 1998. We estimate nine indexes of income inequality implied by our world distribution of income. All of them show substantial reductions in global income inequality during the 1980s and 1990s.

This stuff is simple and is clear if you read a newspaper once in a while. China and India are catching up with the West. Africa is a basket case but thats it. Every single country in the world is increasing gdp per capita with the excpetion of parts of Africa. China is growing at 10% a year.

And since its true, its exactly as Marx said, using what you just posted.

it's false. And it is not as marx "predicted". He predicted that capitalists would get all the money, not rich people in the West.

Well Kwame Nkrumah said it too-not an Imperialist. But I thought someone like you might make the Lenin jump straight away.

Whomever said it was wrong. There were empires before capitalism. QED.

Can you leave this thread. It has been diverted to a pissing on marxists thread, not a economics is a pseudo-science thread.

brianthebard

asdasd wrote: »

Wrong as in wrong

from here



This stuff is simple and is clear if you read a newspaper once in a while. China and India are catching up with the West. Africa is a basket case but thats it. Every single country in the world is increasing gdp per capita with the excpetion of parts of Africa. China is growing at 10% a year.

What part of taking countries in isolation is wrong doesn't make sense to you?

[snipped as domain changed hands and is no longer relevant]



Is this graph too complicated for you? Per capita income is bull sh.it.

it's false. And it is not as marx "predicted". He predicted that capitalists would get all the money, not rich people in the West.

Capitalists have accumulated the biggest majority of cash, where they live has nothing to do with it. Again not you're following the point, but rather posting what you want to be true.

Whomever said it was wrong. There were empires before capitalism.

The term Imperialism was first used to describe the emerging capitalist empires of the sixteenth century. Is that too complicated for you? I can see English and History are not your strong points.

Time Magazine

Let's not get bitchy.

Well let's be bitchy but at the post, but not the poster :pac:

Flamed Diving

So empires didn't exist before someone coined the phrase 'Imperialism'?

Boskowski

asdasd wrote: »

Better than Marxism though.

Now I'm hardly an expert, actually I haven't a clue at all. But from what I remember from school/college I was thinking that this sounds like...:

'Car technology is hardly an engineering discipline at all.'

and you replying to that...

'ye better than combustion engines though'.

turly

Today's iGoogle Quote of the Day:

An economist is a surgeon with an excellent scalpel and a rough-edged lancet, who operates beautifully on the dead and tortures the living.
--Nicholas Chamfort

http://www.quotationspage.com/quote/27721.html

Mikel

Well economists can't perform repeatable experiments, most of it seems to be based on rhetoric than on objective evidence.
Financial economics especially seems to suffer from 'physics envy' and seems to want to dress up everything in mathematical masturbation.
I wouldn't be familiar with the macro/micro branches of things, but I've read quite a bit of the financial side, and it's most definitely pseudo science.

Tau

book smarts wrote: »

1. Economic "cycles" aren't really cyclical. "Cyclical" implies well behaved and well understood, which they clearly aren't.
2 .It is based on blatantly false axioms such as "rational agents". People do not behave exactly as assumed.
3. Modern portfolio theory is wrong- it assumes Gaussian models which are false. The market is largely unpredictable. Yet "expert consultants" claim they can measure "risk"
4. The Nobel prize for economics is farcical. Economics is surrounded in jargon, false rigour and phony maths. It has scientific pretensions, but is not science. Nobel's family itself want it abolished.

So called "experts" such as Bernanke & co. merely postponed the recession, and made it worse, instead of embracing it, as recession is the "cure" to the present crisis. Bernanke himself studied the Great Depression intensely, and swore it would never happen again. And now look. I think Godel's theorem applies, those within a system can never look at the workings of the system objectively, because the attempt to do so alters the system.

Human behaviour is far more complex than economists and other social "scientists" would have us believe. What motivates our actions? Where do thoughts come from? These are philiosophical questions that I believe are so complex as to be unknowable. All that will happen is a new "school" of economics will be born, and the "experts" will think they know it all once again, and look back at this generation and laugh.

While I do agree with you in principle - a lot of the stuff that is branded about economics is bull - I don't like your arguments.

2. Could be said about a lot of physics also - Newtonian physics is not only based on false axioms (simultaneity, flat space-time) but actually known to be false (relativity is better). Its still useful and scientific though.

3. Same as above - just because its "wrong" doesn't mean its not useful or scientific.

4. Quite a few of the Nobels have been dodgy in the past. Peace is the best example, but the others aren't exempt either.


As to your last paragraph, I'd offer the example of the "laws" of friction, as learnt at secondary school. If you move your mouse along a (flat, horizontal) table, the friction is (according to Newtonian dynamics) proportional to the weight of the mouse + the force with which you're pushing down on it with your hand. Of course, this is a vastly more complicated system than that - it involves squillions of molecular interactions at a quantum level which are definitely "so complex as to be unknowable". That's not to say that F = uR isn't a pretty good, scientific, accurate, useful rule.


If you want to say something isn't a science, you have to do more than cite unsolved problems in the field or pointing out that some of the theory isn't absolutely precisely correct.

Flamed Diving

If you were somehow able to come up with perfect mathematical models for all real events, economics would surely have the most complex models of all. Economists try hard to create models that are simpleish, yet accurate, but this probably isn't possible because the reality of the situation is so complex. But does that mean we should simply give up attempting?

turly

Flamed Diving wrote: »

But does that mean we should simply give up attempting?

No, for sheer entertainment value it's worth persevering... though perhaps we should move economic "forecasts" to the same page as the horoscope.

silverharp

Flamed Diving wrote: »

If you were somehow able to come up with perfect mathematical models for all real events, economics would surely have the most complex models of all. Economists try hard to create models that are simpleish, yet accurate, but this probably isn't possible because the reality of the situation is so complex. But does that mean we should simply give up attempting?

I agree with that, it is impossible to model human behaviour 100% , to the extent that I look at economic models and indicators I am happy once it has a statistical significance or proven corellations with past events.
If I had a complaint it would be that the media etc focus on models that are lagging indicators as opposed to leading indicators. It wouldnt be acceptable in hurricane forecasting but some how there is no economic warning system for the general public

BenjAii

silverharp wrote: »

I agree with that, it is impossible to model human behaviour 100% , to the extent that I look at economic models and indicators I am happy once it has a statistical significance or proven corellations with past events.
If I had a complaint it would be that the media etc focus on models that are lagging indicators as opposed to leading indicators. It wouldnt be acceptable in hurricane forecasting but some how there is no economic warning system for the general public

I think the problem goes deeper than the media, and is with Economics itself as an academic discipline.

As you've pointed out, it's rarely possible to make 100% cast iron arguments in Economics with the confidence you could in Maths or Physics, yet it's done, with the inevitably logically fallacious results, all the time.

It seems to me this lack of critical thinking and intellectual honesty in Economics discussions is rarely addressed by Economics itself as a discipline , who seem to go along with the morass of pseudo discussion in the media, rather than calling to account or attempting to bring intellectual rigour to this process.

asdasd

As you've pointed out, it's rarely possible to make 100% cast iron arguments in Economics with the confidence you could in Maths or Physics, yet it's done, with the inevitably logically fallacious results, all the time.

Yes. One of the very very real problem with economics is that it clear that human beings do not necessarily react exactly the same to the same stimuli, unlike particles and objects subject to newtonian or other physical laws.

Take the recent asset boom, caused by excess liquidity, in turn caused by the easy supply of money as set by the Central banks (ECB and Fed in particular) . What a blunt instrument that is anyway, but now the aim of both banks and the respective US and Europeann governments is to do the same again to offset a Depression.

Clearly the reaction will not be same again. In fact monetary loosening will not only not create an asset bubble like before, but may not even work to stave off depression.

This is because human beings are not memoryless objects who react the same to similar stimuli.

We have already been burnt by property falls as consumers, or bad loaning practice as producers, so even with the same attempted monetary stimuli the reaction will not be the same.

Such systems are not measurable except in retrospect.

Économiste Monétaire

asdasd wrote: »

Take the recent asset boom, caused by excess liquidity, in turn caused by the easy supply of money as set by the Central banks (ECB and Fed in particular) . What a blunt instrument that is anyway, but now the aim of both banks and the respective US and Europeann governments is to do the same again to offset a Depression.

Clearly the reaction will not be same again. In fact monetary loosening will not only not create an asset bubble like before, but may not even work to stave off depression.

Low interest rates set by CBs are not the sole cause of assets bubbles. There is no agreement on that, and it's too simplistic of a statement. There are more agents at play than simply CBs.

asdasd

There is no agreement on that, and it's too simplistic of a statement

That I think, speaks to the thread title.

Économiste Monétaire

asdasd wrote: »

That I think, speaks to the thread title.

The irony of disregarding a subject's validity, yet having so much to say about it, whether the opinion is uninformed or not, is quite amusing. Your statement that low CB rates are the sole cause of asset bubbles is quite silly--defer that if it pleases you to do so.

silverharp

BenjAii-I think the problem goes deeper than the media, and is with Economics itself as an academic discipline.

As you've pointed out, it's rarely possible to make 100% cast iron arguments in Economics with the confidence you could in Maths or Physics, yet it's done, with the inevitably logically fallacious results, all the time.

It seems to me this lack of critical thinking and intellectual honesty in Economics discussions is rarely addressed by Economics itself as a discipline , who seem to go along with the morass of pseudo discussion in the media, rather than calling to account or attempting to bring intellectual rigour to this process."


This is from a Feb 06 article wrt the US housing market. Now should you treat economists like auditors so that the nonsense written below is clamped down on?? Or if an economist works for lobby groups or financial companies then they have to carry a financial heath warning?
My suspision for example the clowns below is that they knew things were worse then they were saying publicly, it was not a problem with economic models.




At the top of the list in believing the “permanently high plateau” theory is David Seiders, the chief economist for the National Association of Home Builders. He expects another record year this year (2005), even as the industry begins to hit “the plateau we’ve been watching and waiting for.”

Also chiming in on the permanently high plateau theory is Erik Bruvold of the San Diego Regional Economic Development Corp. in the San Diego News article, “Housing economists raise yellow flag over San Diego”.

“Mr Brovold predicted a flattening in prices rather than a dramatic falloff. Already, the inventory of homes on the market is growing and sales prices are lower than asking prices. ‘I think we’ve hit a plateau,’ Bruvold said. ‘I would not refer to it as a turning point.

“David Berson, chief economist of Fannie Mae…also seems to be giving some credence to the ‘plateau theory’… ‘prices may simply slow for a period of slow or no price gains.’

“David Seiders (has also) said, ‘I think the biggest risk would be for investors not only to stop investing, but to move those units back onto the market in large volume, … that could create a bigger problem.”

BenjAii

asdasd wrote: »

Yes. One of the very very real problem with economics is that it clear that human beings do not necessarily react exactly the same to the same stimuli, unlike particles and objects subject to newtonian or other physical laws.

I'm confused. So you are backing up your agreement with the assertion that theories and opinions in Economics are frequently falsely represented as watertight logical arguments by, er, doing the same ?

BenjAii

silverharp wrote: »

This is from a Feb 06 article wrt the US housing market. Now should you treat economists like auditors so that the nonsense written below is clamped down on?? Or if an economist works for lobby groups or financial companies then they have to carry a financial heath warning?
My suspision for example the clowns below is that they knew things were worse then they were saying publicly, it was not a problem with economic models.

I would never think "clamping down" on letting people say whatever they want is a good idea.

What is striking is that the public at large are familiar in other spheres with the idea that it is a very difficult and tricky processes to arrive at the the nearest we can get to an independent "truth" in complex matters.

Compare societies ideas in the Western world to trial by jury. Almost everyone is familiar with the difficulties and nuances at attempting to arrive at the truth in complex trials and of the dangers in persuasion by the sophistic. So it's not a if society at large cannot deal with these ideas and high standards of critical thinking.

Contrast that to the utterly dismal standards of discussion on matters economic, where sophism and intellectual dishonesty is the norm.

It's not that there is anything wrong with people discussing their different opinions about economic matters, it's just that people who present themselves with credentials to authority on this subject, frequently try to represent such discussions as logically built arguments establishing truths.

I can understand, given Economics close relationship to Politics, why so many people have an interest in using whatever debating trick they can muster to appear to win arguments, and why this is so widespread in the media.

What I don't understand is why there seems to be no movement within Economics to countermand it.

nesf

Most of the "economics" that many people seem to be bitching about is from the Economics section of the paper rather than the academic discipline. Meteorology is possibly the closest analogy in the physical sciences to economics. Both deal with being unable to have all the starting information, having to make predictions based off this imperfect information and being unable to ever absolutely predict any event.

Flamed Diving

asdasd wrote: »

That I think, speaks to the thread title.

So 'real-science' is an arena where opinion is unanimous?

Interesting.

:rolleyes:

asdasd

So 'real-science' is an arena where opinion is unanimous?

Interesting.

Except for known unknowns, yes.

As far as i can what people are now saying not only did economics ( as a discipline) not predict this bust but the idea that the low levels of interest rates ( negative in Ireland since the century's turn) caused the asset bubble is also in dispute. So economics = not good at prediction, and not good at explanation.

Flamed Diving

Flamed Diving wrote: »

So 'real-science' is an arena where opinion is unanimous?

Interesting.

:rolleyes:

asdasd wrote: »

Except for known unknowns, yes.

Or to put it another way, there are disagreements in science. So real-science is also pseudo-science? Very good.

asdasd = pwned

Économiste Monétaire

asdasd wrote: »

Except for known unknowns, yes.

As far as i can what people are now saying not only did economics ( as a discipline) not predict this bust but the idea that the low levels of interest rates ( negative in Ireland since the century's turn) caused the asset bubble is also in dispute. So economics = not good at prediction, and not good at explanation.

Saying that low interest rates are the sole causation factor in a bubble is wrong, and terribly short-sighted. It fails to take into account other factors such as a poor spatial strategy & underestimation of immigration pressures to areas, a general increase in the level of wealth in a country, an inability to match supply and demand due to lags, tax policies relating to the property market (government policies generally), people's inherent desire to herd in a direction (perpetuated by media), the actions of commercial banks, et cetera. Simply having low CB interest rates does not mean there will automatically be a bubble. Economic bubbles occurred before discretionary monetary policy was around, and in some ways are distinct in their complexity in each country where they occur, and in which market they occur (i.e. stocks, houses.)

Your hypothesis isn't in serious dispute--such a simple explanation is comical in its lack of scope. You have complained about economics being too simplistic, and unrealistic, in its analysis... :rolleyes:

SkepticOne

Does economics have predictive power greater than common sense?

It is possible that economics has become a sort of ingroup with its own technical 'in' language. To be a member of the group you must demonstrate proficiency in manipulating economic concepts but whether those manipulations have any bearing on the real world is secondary.

So, for example, an economist known for optimistic housing market forecasts (I will not mention names!) is still respected within the economics ingroup because he justifies his position in terms of economics jargon whereas outside he is a comical figure.

book smarts

Tau wrote: »

While I do agree with you in principle - a lot of the stuff that is branded about economics is bull - I don't like your arguments.

2. Could be said about a lot of physics also - Newtonian physics is not only based on false axioms (simultaneity, flat space-time) but actually known to be false (relativity is better). Its still useful and scientific though.

3. Same as above - just because its "wrong" doesn't mean its not useful or scientific.

4. Quite a few of the Nobels have been dodgy in the past. Peace is the best example, but the others aren't exempt either.


As to your last paragraph, I'd offer the example of the "laws" of friction, as learnt at secondary school. If you move your mouse along a (flat, horizontal) table, the friction is (according to Newtonian dynamics) proportional to the weight of the mouse + the force with which you're pushing down on it with your hand. Of course, this is a vastly more complicated system than that - it involves squillions of molecular interactions at a quantum level which are definitely "so complex as to be unknowable". That's not to say that F = uR isn't a pretty good, scientific, accurate, useful rule.


If you want to say something isn't a science, you have to do more than cite unsolved problems in the field or pointing out that some of the theory isn't absolutely precisely correct.

2. Newtonian physics is good enough for most objects and only becomes inadequate at very big or very small scales. Economics isn't good enough at the levels it is needed.

3. If it is wrong it is not scientific. If it was truly right, scientific experiment would have proven it. It is only kept on by faith alone.

4. Agreed on the Nobels. They should have given it to Bono (joking). But the public think they validate it.

On your last paragraph, I agree. But once again Newtonian physics is useful for the scale of everyday things, while economics is not.

Economics has many hallmarks of pseudo-science. Instead of discarding what doesn't work, like science, economists repeatedly cling to false theories like a religion.

Flamed Diving

book smarts wrote: »

3. If it is wrong it is not scientific. If it was truly right, scientific experiment would have proven it. It is only kept on by faith alone.

Interesting. Could you give me an example of a scientific theory that has been proven?

nesf

asdasd wrote: »

Except for known unknowns, yes.

Not all sciences are in areas where you get loads of absolutes.

nesf

book smarts wrote: »

Instead of discarding what doesn't work, like science, economists repeatedly cling to false theories like a religion.

*cough*

String Theory

*cough*