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posted by mrpg on Wednesday August 30 2017, @03:42AM   Printer-friendly
from the A-Star-To-Guide-Us dept.

When Christopher Nolan was promoting his previous film Interstellar, he made the casual observation that "Take a field like economics for example. [Unlike physics] you have real material things and it can't predict anything. It's always wrong." There is a lot more truth in that statement than most academic economists would like to admit.

[...] several famous Keynesian and neo-classical economists, including Paul Romer, [...] criticized the "Mathiness in the Theory of Economic Growth" and [...] Paul Krugman. In this instance, though, Krugman is mostly correct observing that "As I see it, the economics profession went astray because economists, as a group, mistook beauty, clad in impressive-looking mathematics, for truth."

[...] But more fundamentally, as Austrian economist Frank Shostak notes, "In the natural sciences, a laboratory experiment can isolate various elements and their movements. There is no equivalent in the discipline of economics. The employment of econometrics and econometric model-building is an attempt to produce a laboratory where controlled experiments can be conducted."

The result is that economic forecasts are usually just wrong."

"[Levinovitz] approvingly quotes one economist saying "The interest of the profession is in pursuing its analysis in a language that's inaccessible to laypeople and even some economists. What we've done is monopolise this kind of expertise.[...] that gives us power.""

[...] because economics models are mostly useless and cannot predict the future with any sort of certainty, then centrally directing an economy would be effectively like flying blind. The failure of economic models to pan out is simply more proof of the pretense of knowledge. And it's not more knowledge that we need, it's more humility. The humility to know that "wise" bureaucrats are not the best at directing a market "

Economists Are the New Astrologers


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  • (Score: 3, Interesting) by Anonymous Coward on Wednesday August 30 2017, @06:40AM (11 children)

    by Anonymous Coward on Wednesday August 30 2017, @06:40AM (#561356)

    Read Mises _Human Action_ and it is self evidently correct.

    No, it isn't. It is not even empirically correct. In fact, pretty much dead wrong, except to libertariantard fan bois. And you were arguing about scientific method?

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  • (Score: 0) by Anonymous Coward on Wednesday August 30 2017, @08:23AM (10 children)

    by Anonymous Coward on Wednesday August 30 2017, @08:23AM (#561391)

    No. It's not even empirical. It doesn't use the scientific method. In fact the fundamental criticism of the Austrian school against the mainstream is one of epistemology.

    When you criticise something, bother to understand the first thing about it.

    • (Score: 1, Funny) by Anonymous Coward on Wednesday August 30 2017, @09:18AM (9 children)

      by Anonymous Coward on Wednesday August 30 2017, @09:18AM (#561404)

      No. It's not even empirical.

      In other words, it's a religion.

      • (Score: 0) by Anonymous Coward on Wednesday August 30 2017, @10:10AM (8 children)

        by Anonymous Coward on Wednesday August 30 2017, @10:10AM (#561409)

        No. It does not require faith. Neither do maths nor logic.

        • (Score: 3, Insightful) by khallow on Wednesday August 30 2017, @11:37AM (6 children)

          by khallow (3766) Subscriber Badge on Wednesday August 30 2017, @11:37AM (#561436) Journal

          No. It does not require faith. Neither do maths nor logic.

          Math and logic still work if the axioms change. Not so with Austrian School economics. Those axioms have to be taken on faith.

          • (Score: 0) by Anonymous Coward on Wednesday August 30 2017, @12:43PM (3 children)

            by Anonymous Coward on Wednesday August 30 2017, @12:43PM (#561464)

            Actually math and logic may still work, but they may lead to different conclusions. (see non-Euclidian Geometry)

            In any system of logic the axioms have to be taken on faith, that is the definition of an axiom, and hardly insightful.

            If there are any axioms used in Austrian Economics that you dispute, kindly put forward your argument. Otherwise you are just yelling, "It's falsifiable", which is the same for mainstream economics as well. Being falsifiable, does not make it any more or less wrong.

            • (Score: 0) by Anonymous Coward on Wednesday August 30 2017, @05:38PM (1 child)

              by Anonymous Coward on Wednesday August 30 2017, @05:38PM (#561601)

              Actually, being falsifiable is necessary for it to be a science. If you make a guess that cannot be proven wrong, it is not a hypothesis.

              This is what separates religion and science.

              Of course, even science relies on an axiom that must be taken on faith. This axiom is that observation follows reality, that is, what you can observe is actually real. A reasonable axiom, but one that must be taken on faith none the less.

              • (Score: 2) by maxwell demon on Thursday August 31 2017, @05:55AM

                by maxwell demon (1608) on Thursday August 31 2017, @05:55AM (#561982) Journal

                Of course, even science relies on an axiom that must be taken on faith. This axiom is that observation follows reality, that is, what you can observe is actually real.

                Only if you take the realist viewpoint (that science tells you something about the properties of the world). If you take the instrumentalist viewpoint (that science just tells us something about the properties of our observations), you don't need that axiom.

                --
                The Tao of math: The numbers you can count are not the real numbers.
            • (Score: 1) by khallow on Friday September 01 2017, @03:07AM

              by khallow (3766) Subscriber Badge on Friday September 01 2017, @03:07AM (#562394) Journal

              If there are any axioms used in Austrian Economics that you dispute

              Well, let's start with the first axiom [mises.org] of course.

              individual human beings act, that is, on the primordial fact that individuals engage in conscious actions toward chosen goals

              That axiom alone ignores actions that aren't "conscious actions toward chosen goals", but which have economic content. Similarly, it ignores non-human actors of which there are many in human society (such as codes of law and other high level systems in human society, or computer trading programs and other machine-based decisions systems) and in the natural world (for example, large carcass feeding behavior among groups of animals or pollination behavior of plants and pollinating animals).

              Second, we have a huge gap from that axiom (and related stuff like existence of incentives to act - which let us note need not apply to machine actors!) to Austrian school application to typical economic scenarios. You can't go from abstract considerations of human action to application in economic theory without introducing a lot of reality-based models and other assumptions.

          • (Score: 0) by Anonymous Coward on Wednesday August 30 2017, @05:22PM (1 child)

            by Anonymous Coward on Wednesday August 30 2017, @05:22PM (#561589)

            An axiom or postulate is a statement that is taken to be true, to serve as a premise or starting point for further reasoning and arguments.

            I don't know much about the Austrian School or much care, but get your simple definitions straightened out!

            • (Score: 1) by khallow on Thursday August 31 2017, @12:38AM

              by khallow (3766) Subscriber Badge on Thursday August 31 2017, @12:38AM (#561878) Journal
              Ok, why do you think there is a problem here with my post? Elsewhere someone has posted some claims Mises made about government intervention in the economy. That's not merely seeing where things lead, but assuming axioms are true enough to make public policy based on alleged logical deductions from those axioms. In other words, faith.
        • (Score: 0) by Anonymous Coward on Wednesday August 30 2017, @11:20PM

          by Anonymous Coward on Wednesday August 30 2017, @11:20PM (#561817)

          I don't believe it. Jmorris is a false news profit.