Posted: Mar 01, 2010 4:39 am
Mr.Samsa wrote:You have to separate out a few different "kinds" of economics - there is the practical application of economics, and then there are two facets of economic theory; the first being the old school of thought that bases everything on the "rational agent", and the latter being the modern school of thought that realises that "rational agents" don't exist.
The applied economics obviously isn't science, as no applied field is science, and the old school economics isn't science as it's based around confirming presuppositions rather than discovering facts about the world. However, the latest stuff coming out on economics (in the field of behavioral economics) is actually pretty exciting and meets all the criteria of science.
The simple fact of the matter is that economic theory has been invaluable in developing some of the most important theories in psychology over the last few decades; for example using the concept of utility discounting in self control studies. There's also the fact that, as any good science should, it removes any concepts that have been falsified by experimental data - such as maximisation theories, the idea of the rational agent whose choices remain constant over time, etc.
So whilst it has a pseudosciency history, and a number of people fail to distinguish the scientific theory from the applied field, a lot of the work coming out at the moment follows all the rules of science and is making some important contributions to understanding the world. And it is very exciting, not boring at all!
Good points, Mr.S., my post fairly inline with yours, though you say things with an eloquence and a sound of authority I'll never manage.You can't emphasize enough how fascinating some of the experiments economists are doing these days, and often rather amusing. One of my favorites that has been replicated with Macaque Monkeys is the fair split test. Take two people, offer one $100 dollars on the condition that he offer to split it with the other, and that the other accept the split. A rational agent would accept a $1 split as he gains for zero effort, a human, with strong sense of fairness, won't accept offers anywhere near that low (can't remember the actual results). These types of tests are beginning to discern the deep psychologies of our drives and motivations, the basis for what moves individual economic agents and global markets.