The Pretense

There is an article by Raj Chetty Yes, Economics Is A Science getting some attention – including that of Greg Mankiw who comments:

An interesting article, which raises the following questions in my mind: Is the younger generation of economists like Raj skipping some of the big questions of economics because some smaller questions are easier to answer?  If so, is that optimal from the standpoint of society as a whole?

There are two things here: The question whether Economics is a science hides the fact that most economists at the most basic level are simply incompetent and struggle with basic economic concepts. This can come across as pompous but you only have to look to believe it. The Mankiw quote above is another level of shamming.

In other subjects – science or in arts – if you have the talent, there is a good chance you are successful and lead a good life. Of course one can fail or not do well for various other reasons such as having a failed love relation affecting your performance and so on, but if you are interested in economics early in life and go to a university to study, ability can make your life difficult and even miserable because your professors don’t know anything.

While it is a good debate to compare Economics to sciences such as Physics, the trouble is that almost all economists at the most elementary level fail to understand the most basic things.

Take for example the textbook on Macroeconomics by Krugman and Wells. If you are interested even partly in Macroeconomics and skim through heteredox blogs, you will find out how the concept of the “money multiplier” is erroneous to say the least. But look at what the authors say in page 399 of the 3rd edition:

Krugman Wells p399(source: amazon.com)

And this – the money multiplier story – is just one example among numerous others. The question of whether economics is science or not is sometimes irrelevant when at the most basic level, most economists failed to understand simple things.

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