Blog-Reference
Feynman said:
(i) “The test of science is its ability to predict.”
(ii) “The future is unpredictable.”#1
Which Feynman is relevant for economics? Both, of course, but economists in their confusion took (i) and ran away with it. The bottom line of the prediction brouhaha is: scientists do not predict the future, only charlatans do, and only morons take them seriously.#2
As a matter of principle, a theory cannot be dismissed because it does not predict the future. Therefore, economics from Jevons/Walras/Menger to DSGE cannot be dismissed because it has not predicted crises. The criterion of science is logical and empirical consistency: “Research is, in fact, a continuous discussion of the consistency of theories: formal consistency insofar as the discussion relates to the logical cohesion of what is asserted in joint theories; material consistency insofar as the agreement of observations with theories is concerned.” (Klant) So, economics ― Walrasianism, Keynesianism, Marxianism, Austrianism ― has to be dismissed because of material/formal inconsistency and nothing else.#3
The point is that scientists use the word prediction in a quite different sense from everyday usage. For example, Einstein deduced gravity waves from his theory in 1916 and in our days, 100 years later, they are observed. Only in the very specific sense of ‘testable hypothesis’ scientists make ‘predictions’.
Science proceeds from the known to the unknown: “The object of reasoning is to find out, from the consideration of what we already know, something else which we do not know.” (Peirce) Only in this sense science makes ‘predictions’.
All this is well-known among methodologists: “We are very far from being able to predict, even in physics, the precise results of a concrete situation, such as a thunderstorm, or a fire.” (Popper)#4
The problem of economics is NOT failed predictions but that it is a failed science or, in Feynman’s famous term, a cargo cult science.#5
Egmont Kakarot-Handtke
#1 For the full quotes see Scientists do not predict
#2 Scientists do NOT predict the future
#3 What is dead certain in an uncertain world: economists’ abysmal incompetence
#4 Uncertainty: ‘Whereof one cannot speak, thereof one must be silent’
#5 What is so great about cargo cult science? or, How economists learned to stop worrying about failure
Related 'Why is economics a total scientific failure?'. For details of the big picture see cross-references Paradigm Shift.
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REPLY to Tom Hickey on Apr 30The topic is prediction in economics and you landed at causality. And what you as the distinguished MMT philosopher and opinion leader have to tell the audience is: “There are many theories of causality.” So what?
The point is that if there are many theories the field is in the state of utter confusion because, as a matter of principle, only one theory can be true. Science is the quest for the true theory as philosophers know since Plato.
In economics, there are folks who claim that they saw the financial crisis of 2008 coming and that Orthodoxy badly failed on this account. What these folks try to bring across is that they have the true theory because, as everybody knows: “The test of science is its ability to predict.”
Fact is that prediction is ill-understood in economics. There are basically two types of prediction: the pre-scientific and the scientific:
(i) The shaman says that in his state of superhuman awareness it has been communicated to him that in the near future the great dragon will swallow the sun.
(ii) The scientist says, according to my calculations, which are based on the Theory of Gravity and given initial conditions, I conclude that the people in Togo will observe a total solar eclipse on March 29, 2006.
Let us assume that the event happens as ‘predicted’ then follows from (i) that the shaman has extraordinary/inexplicable abilities, and from (ii) that the theory is true, with the qualification that in the future perhaps somebody will come up with an even better theory.
Because in economics we do not have the true theory ― Walrasianism, DSGE, Keynesianism, Post Keynesianism, MMT, Marxianism, Austrianism are provably false ― a prediction that comes true is not more than a lucky guess at the betting shop.
The crisis prediction brouhaha is just another distraction from the fact that economics is a failed/fake science. This applies also to MMT which is just another political fraud.#2
#1 The futility of testing economics blather
#2 For the full-spectrum refutation of MMT see cross-references MMT
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REPLY to Noah Way on May 2You say: “I've got a couple of theories about Franko, …”
NO. You have, at the very best, got a couple of HYPOTHESES about Franko. Your blather does not deserve the designation theory. A theory is the humanly best mental representation of reality and satisfies the criteria of material/formal consistency.