Science's Toughest Test, & Higgs Particle vs Piketty

[AngryAmish]

http://bigthink.com/errors-we-live-by/sciences-shakeable-faith-test-higgs-particle-vs-piketty

Science's Toughest Test, & Higgs Particle vs Piketty
by JAG BHALLA APRIL 25, 2014, 1:24 PM
Bigthinkshakeablefaith

"Good science allows only shakeable faiths. Its toughest test comes when new evidence meets old certainties. By that test some economics seems more art (or math masked religion) than science.

Thomas Piketty’s new book reporting historical inequality data has been called a “masterly diagnosis” that’ll “change...the way we think about society.” But also “a bizarre ideological screed,” with its "main argument...based on two (false) claims."

That seems different from how sciences like physics handle new evidence. The documentary Particle Fever about discovering the Higgs particle shows physicists are ready to dump decades of ideas and work because of new data.The key is what’s considered sacred?"

The study of economics is broken.

[malthaussen]

1. Perhaps that is because economics is not a science.

Although even science is broken, as the qualifier "good" in the first quoted paragraph illustrates. If science were so pure, there would not be so much "debate" over global warming and other subjects which are dominated, not by facts, but by ideology. It doesn't matter much if "good scientists" reject their colleagues who sell their research to corporations and politicians, if real-world policy is made based on the "findings" of the latter.

-- Mal

[Avalux]

2. Economics is NOT science. It's rolling the dice.

Scientific method leaves no room for guessing; a hypothesis is tested through observation and experimentation. That's why we have the LAWS of physics. And, if new data is presented challenging previously established hypotheses, scientists accept this and correct/adjust accordingly as they continue to observe and experiment.

Economics is based on a retrospective look at available data (not controlled experimentation) - which does leave room for subjective interpretation. Anyone who would expect an economist to somehow remove their personal take of that data doesn't understand. The study and interpretation of economics cannot be held to the same rigorous scientific requirements as physics. It's apples and oranges.

The author is criticizing Piketty's conclusions as idealogical and incorrect by using an argument that just doesn't work. There is no way to prove Piketty is incorrect; even if the author wants to persuade us that there is.

[Crunchy Frog]

3. Is economics any different in that respect from the other social "sciences"?

And that would include psychology. Isn't that why there's a distinction between the "hard" sciences and the "soft" sciences?

[marions ghost]

4. I get the point

--that we should totally rethink economic theory based on the fact that the current models don't work for a healthy society. But the comparison to discoveries in physics is only useful as a quick and dirty way into the topic --it's not really a logical comparison. Maybe it's supposed to be a humorous touch.

To say that Piketty's book is the Higgs Boson of Economics--ie. the catalyst to a sea-change--seems kinda hyperbolic, but I guess we can all hope it shakes things up. Because economic inequality IS a big negative. And more people need to be convinced of that. So if this is what it takes--Go Piketty.

I guess I have to read the book, though I might just wait and read the chat to get more of an idea how opinions fall. (Not being a big subscriber to the "sacred" tenets of economic theory in the first place).

Yes, sometimes sacred tenets need to fall. I certainly go with that. And fall suddenly when they can no longer be supported by rational people.

Economics is more like religion than any science. And there are a lot of Deniers, as with climate change.

[AngryAmish]

5. It is NOT settled that economic inequality is a big problem.

There are economists who sincerely believe that it is not. We can describe fighting inequality as a value but we can't call it a problem.

All the basic models don't work to even describe reality well(for shorthand let us call them free market, marxist, keynesian, monetarist, austrian etc). The biggest myth in economics is that humans are rational actors. It is ascientific nonsense. If we cannot get a handle on how decisions are made (though we are getting closer with neuroscience and decision science).

[marions ghost]

6. You CAN price the cost to society

of, for example, our current dysfunctional healthcare system. (As a value thing, we all know it's wrong to create different levels of healthcare for the rich and the poor).

This organization seems to define Inequality as a problem, in economic terms (and this article helps to understand the Piketty POV, in the most general sense):

http://equitablegrowth.org/2014/04/24/daily-piketty-thursday-focus-april-24-2014/

"I had not fully realized just how much heavy a lift Piketty has in trying to persuade the American neoclassical growth-economics community within economics departments. Their–our–default view of the world is–very strongly–that it is characterized by a Cobb-Douglas aggregate production function, in which the rate of profit moves inversely with the L ratio and in which as a result the capital income share of total income is constant.

You may say: “But if you have a model in which you assume the capital income share is constant, you then have no chance of ever explaining fluctuations in income distribution. How can you use a model in which fluctuations in income distribution do not happen to criticize anyone trying to explain why they do?” And this is a more than fair cop. But that the habit of thought is not rational doesn’t keep American neoclassical growth-economists in economics departments from doing it: their–our–first reaction to Piketty is: “That can’t be right, because in our model the capital-income share of total income is invariant to shifts in the wealth-income ratio.” And they–we–typically do not take the second step in the argument and say: “wait a minute: in our model nothing causes shifts in income distribution, so we need another model”…"

And let me draw some links to my and others’ scattered reflections on Piketty that I have found useful" .....several links

(Read more at link)

[AngryAmish]

7. I suppose I put Pikkety in the "not even wrong" category.

To be fair I have not read the book and I will not. I have read enough economics textbooks and papers and I am done with it.

They are all wrong.

My critique is the entire field does not know what it is talking about. There is little agreement even on core principles. Like all other macroeconomists there are huge assumptions made that are papered over with hand waiving.

Yet basic decisions on taxation, money supply, tariffs, immigration etc have to be made. I suppose I would in my gut do what would let the little guy get ahead. But following your intuition is not science and we should stop pretending that it is.

Is it possible that an Ayn Rand society create maximum wealth and happiness? Unlikely. Would strict year zero-abolish money Khmer Rouge create equality? Unlikely. But we can't test either proposition and there are people who advocate for both of these policies.

[marions ghost]

8. Actually

we (ie conservatives) are testing some of the Ayn Rand thesis currently (twisting it, but still acting on it)-- and finding that it doesn't work very well. Those who are advocating for it are down the wrong road.

You're sort of saying "solve the issues at the micro-economics of practical living level" and then assume that will all work out at the macro-level...?

I agree with you that absolute certainties in any field are hard to come by.

However I don't care if Piketty is entirely correct or wrong in spots. I don't care if his solutions are perfect or not. If this book can convince people to consider some new paradigms, that's about all it can do. But that in itself might be what's needed to get us unstuck. Because this macroeconomics we are living now...ain't workin. (well, it's working QUITE well for the 1%...but it's putting the rest of us rats on a never-ending treadmill, with them poking human chow in through the bars)...

[Donald Ian Rankin]

10. Inequality is not a problem, it's an opportunity. Poverty is the problem

Reducing inequality would be very easy indeed - just make all the rich people poorer. Some people, sadly, would view that as an improvement, but I think that that is a foolish view - a right-wing caricature of left-wing beliefs.

The goal of a sensible economic philosophy is to make the poor richer.

The reason inequality is symptomatic of an unhealthy society is that it's indicative of an opportunity to do that, by redistributing wealth, that's not being taken.

(There's also some evidence that inequality may be a contributing causal factor for certain social ills, like crime, but that's very much a second order effect. The big issue is that it implies that there are probably easy ways to tackle poverty that are not being taken.)

[marions ghost]

11. Make the rich poorer

sounds OK to me. Because they are not making the poor richer. And the rich are in control of the distribution of wealth.

Your argument is circular.

[Chathamization]

9. The problems with supersymmetry don't seem like they're being handled so well.

To name but one example. Physics shouldn't be placed on a pedestal; it's not exempt from the human ego and bias problems that afflict economics, or any field for that matter.