
Economics is not a natural science - yarapavan
http://www.edge.org/3rd_culture/rushkoff09/rushkoff09_index.html
======
Tichy
"In fact, thanks to their blind acceptance of a particular theory of the
market, most of these concepts end up failing to accurately predict the
future. "

Failing to predict the future does not prove something is not scientific. For
example there are simple cellular automatons whose evolution can not be
predicted, even though all the rules they follow are known.

Also, what is "the market" supposed to mean?

"Now the interesting thing about this money is that it lost value over time. "

Oh dear, please tell me that it is not the "Freigeld" craze finally reaching
HN :-(

~~~
juvenn
"Failing to predict the future does not prove something is not scientific."
Good point, thanks.

~~~
jwhite
But if the technique in question was promoted as a scientific means of doing
just that, then you have to question it, and its proponents. LTCM is the
example that springs to mind.

~~~
juvenn
Yeh, you make the point. So there are economists who claims that future is
unpredictable, like Xiaokai Yang[1]. [1]
<http://en.wikipedia.org/wiki/Xiaokai_Yang>

------
andreyf
What is "Natural Science"? A study of a "natural system"? What's a "natural
system"?

I think what the author means to say, and should have said in one paragraph,
is that economics has not yet developed an appropriate language for their
models. Economists are still trying to use calculus, which was thought of by
physicists do describe physical phenomena, which, when used in economics, is
leading to wildly inaccurate models.

~~~
christofd
Well put! The basic models of Econ were built on physics envy. They built
models on a fairly artificial set of assumptions that use calculus. Poppycock.

~~~
rwolf
Every last one of the economics courses I've taken was smothered in caveats
about the underlying assumptions--you could make a drinking game out of it.
Fields like behavioral economics address specific criticisms with new theory,
making BE even more likely to clearly and consistently note problems with the
foundation.

I'm okay with econ being a social science (it sure wasn't taught in the
Natural Science building at my school!), and I'm okay with being critical of
the way its framework extends into my life. I don't understand how anyone can
get through the gauntlet of econ warnings with hubris intact.

------
jrockway
Why is every word in the title all-caps except for "Not"?

------
CulturalNgineer
From Edge: Comment from George Dyson on “Economics Is Not a Natural Science”
By Douglas Rushkoff

“How to best transcend the current economic mess? Put Jeff Bezos, Pierre
Omidyar, Elon Musk, Tim O’Reilly, Larry Page, Sergey Brin, Nathan Myhrvold,
and Danny Hillis in a room somewhere and don’t let them out until they have
framed a new, massively-distributed financial system, founded on sound, open,
peer-to-peer principles, from the start. And don’t call it a bank. Launch a
new financial medium that is as open, scale-free, universally accessible,
self-improving, and non-proprietary as the Internet, and leave the 13th
century behind.

In essence, I agree with the piece and the comment.

I also believe that the Chagora model is very close to what they are talking
about… (it can function with standard and/or newly created currencies whether
localized or not. Especially when combined with methods of geographical
localization and scaled anonymity. The practical microtransaction in all areas
is essential for proper scaling of civilization and its the political
microtransaction (networked citizen lobbying) that is the trigger.

P.S. PayPal is a bad model for civilization development.

(Chagora is essentially scalable speech and association)

If I’m an idiot I’d like to find out soon since things are very tight. I’d
like at least a chance to present my case and don’t know where else to go.

<http://www.Chagora.com>

See blog for more...

[http://culturalengineer.blogspot.com/2009/05/foundations-
of-...](http://culturalengineer.blogspot.com/2009/05/foundations-of-
authoritarianism.html)

------
yummyfajitas
From the article: _The system in which most information transmission takes
place today is not a pre-existing condition of the universe. It's not nature.
It's a machine, with very particular rules, set in motion by real people with
real purposes. That's why it's so amazing to me that scientists, and people
calling themselves scientists, would propose to study the internet as if it
were some natural system - like the weather, or a coral reef._

You can use science to study all sorts of systems, ranging from the oceans to
the internet to economics. They don't have to be natural.

All that matters is whether you apply the scientific method to the phenomenon
you are studying. Many economists do this, so (at least part of) the field of
economics is scientific.

You might be able to imagine another world in which the laws of economics
don't work. Ok, so what? You can imagine worlds in which the laws of physics
don't work, it doesn't make physics unscientific.

------
reader5000
His point is not what the definition of 'science' is. His thesis is that in
the late middle ages society operated on a 'mutual credit system' (wikipedia
it) of exchange where the merchant classes were independently creating and
exchanging value. This mutual credit system was usurped for a centralized
currency system where value creation is tightly controlled by the state (i.e.
in the form of loans of a monopolized currency; what we have today).
Centralized currency discourages cooperation and forces unnatural selfish
competition between individuals, to the benefit of the corporate ownership.
This unnatural state is reinforced as natural through corporate sponsorship of
intellectuals like Dawkins and Pinker (even though if you read them both of
these authors works are agnostic on this point). Then he makes an unclear
point about how the internet changes all that.

------
arihelgason
That's why it's called 'the dismal science' - the first thing we were taught
in economics 101 at university.

------
thomaspaine
dupe <http://news.ycombinator.com/item?id=763124>

------
dvvarf
you know, it's funny. most people would put the start of economic thought
~1776 when Adam Smith wrote the Wealth of Nations. That means it's been around
less than 250 years. Sure it may not describe physical processes, but
economics does try to model the real world. SCIENCE wasn't too far along 250
years after inception. I mean, we still believed that the world was flat not
too long ago. give it time, the data will come. mistakes will be made.

~~~
berntb
>give it time, the data will come.

I'm very much not an expert, but that seemed optimistic.

Economy's problem is that it describes a system which contain (more or less)
intelligent beings who read up on economic theory -- and the beings then
modifies their behavior from those studies...

So to get data and build models, it seems there must be some fix point to that
function, somewhere...? :-)

(To add maiming to injury, those beings change culture and probably basic
motivations every generation, these days.)

I have respect for economy and economists, they seem to do a reasonable good
job from a bad position. But I'm happy I went with other interests.

------
juvenn
I do agree that Economics is not yet an reliable scientific subject, i.e. you
can not predict future in accurate by doing scientific computations, and I do
not think it will. But why _natural_? The economy involves, most importantly,
rational (or not) human being who behaviors accordingly. And these behaviors
must connected with the others _socially_. So, how could we learn the economy
without studying these social things?

------
moron4hire
To be fair, I don't recall anyone of import advocating that economics _is_ a
natural science. Look at any university course catalogue and it is wedged
pretty firmly in the social science department where it should be, along with
the other fake sciences like psychology and sociology (though I would have to
call it a continuum of fake, with clinical psychology on the "closer to real"
end and sociology on the "just making junk up" end).

~~~
fburnaby
Very true. That's a problem that in principle can be fixed, though. Your
"fake" sciences can _in principle_ all be approached using the scientific
method. They are actually _real_ sciences. It's just a portion of the
practitioners that hurt their credibility. My guess is that it's the
inherently complex subject matter that allows politically-charged crackpots
and other non-scientists to squeeze their way in and call themselves
scientists.

~~~
moron4hire
Unfortunately, I suspect that there is too much incentive to "make observation
fit one's expectations" in these fields. Conversely, what purpose does non-
scientific quantum physics serve? Beyond weaseling more research money, pretty
much nothing. But making economics and sociology say things that aren't held
up by observation can, and most often does, lead to vast political and social
change.

------
onreact-com
Yeah, most people treat capitalism more like religion than an economic system
of choice, especially the disastrous one we have now.

A return to the less devastating Keynesian sort of capitalism won't undo the
whole mess though.

Alternative digital economies of sharing have shown how there are plenty of
other viable models of economic organization.

It's time to reevaluate the failed system that brought us here.

~~~
davidw
These sorts of comments are exactly why we flag economics articles here. There
are plenty of people here that take exactly the opposite view (or views,
depending on the degree to which they take those views) - that markets should
be even more open/free/etc... On the other end, there's even some guy who says
he's a "venture communist".

Economics is something that we can all agree to disagree on in order to talk
about what we have in common: hacking and startups.

~~~
christofd
No, Economics is very much part of the picture. Economics is not philosophy or
religion but optimization under conditions of scarcity. As long as we remain
metrics driven there's nothing wrong with talking optimization.

My two cents.

~~~
davidw
The problem is that very tightly linked to that is "optimized for _what_?",
and people and societies have different goals.

If people were ok simply talking about economics as a mechanism for
optimization... that would be one thing, but these discussions pretty much
always degrade on the internet.

~~~
christofd
Agreed, most of these discussions lack rigor.

