The other day, I made a crack about the soft sciences, psychology, sociology and so forth, comparing them to astrology and economics. It was in the context of the replication crisis that is roiling fields like psychology. The soft sciences are trying hard to pretend it is problem in all science, but that’s not true. Anyway, someone gave me grief for slandering astrology, because the early strides in astronomy and even astrophysics were due to people trying to improve astrology. If you believe in that stuff, precise measuring of the movement of stars and planets is important.
I think most empirically minded people have long ago concluded that psychology is quackery. When I was a kid, talk therapy was the rage. The schools were hiring “counselors” and having kids sit down and talk about their problems. Even as a kid I knew it was nonsense. Talking someone out of being insane or depressed is slightly less nutty than slaughtering a goat and reading the entrails. Imagine if someone claimed they could talk you out of a broken leg or cancer. But, quackery seems to to stick around much longer than logic says it should.
That’s the pattern we are seeing with economics. The colossal errors in the field should have discredited it a long time ago, but economist are still the court magicians of the modern state. This post by Tyler Cowen is a good example of dressing up uninformed opinion with the jargon of economics to make it sound like science. As Steve Sailer pointed out in the comments, economists have yet to offer a plausible explanation for how the post-nationalist world could operate. The only possible answer is that it would be based on force.
Europe is a great example of just how wrong modern economics has been about pretty much everything. The totality of mainstream economics has been cheering the Euro project for decades, even when it was pretty clear that the single currency was a disaster for many of the members. It has all the cyclical defects of hard money and none of the benefits. The open borders part of the project has resulted in a flood of non-Europeans, who have upset the social order, threatening the stability of the Continent.
This is not the first time modern economics has been outlandishly wrong about Europe. This post by Greg Cochran is a great reminder of just how absurdly wrong the field was about the realities of communism. The best estimates by the court magicians overstated communist economic output by two or three times reality. This despite the fact they had first hand observations of the state of these communist countries. Westerners, including western academics, traveled throughout these countries and could observe the squalor first hand.
In the 80’s, an acquaintance was getting sent to Moscow on government assignment. His family held a going away party as he was expected to be there for two years. Everyone was asked to bring something he could use in Russia. He got things like cartons of cigarettes, blue jeans and small bottles of liquor. The Russians turned a blind eye to this type of smuggling because they wanted the stuff too. The customs agent would take something for himself and maybe set you up with his cousin Yuri to sell the rest. Everyone, except economists, knew the score.
Of course, the birth of economics as a distinct field from political-economy was roughly 100 years ago, with the publication of an economic textbook by Alfred Marshall. Economist were just as wrong about reality then as they are today. Prior to the Great War, globalism was all the rage, just as it is today. A 1910 best-selling book, The Great Illusion, used economic arguments to demonstrate that territorial conquest had become unprofitable, and therefore global capitalism had removed the risk of major wars. A few years later Europe was murdering itself in the worst war in human history.
Science gets lots of things wrong. The scientific method assumes this, which is why test results are published, along with the methods, so others can challenge the results. Negative results are still results and add to the stock of human knowledge. In economics, they get fundamental elements of their field wrong and manage to subtract from the stock of human knowledge in the process. The problems facing Europe today are problems people understood well 50 years ago. Thanks to economics, policy makers are now forced to relearn what their grandparents took for granted.
The root of the problem is that statistics are not science and economics is pretty much just statistics applied to commerce. It’s not worthless, but it is limited. Probability and correlation can point real scientist in the right direction, but they don’t explain the mechanics of cause and effect. We know that smoking correlates with emphysema, but biologists figured out why one causes the other. Per capita chicken consumption correlates with US oil imports and only an economist would suggest one causes the other. Know what is happening is not the same as knowing why.
Calling back to where we started, most quackery manages to have some benefit, even if it is to just some make people feel happy. Astrology is right about the movement of the stars, at least as far as charting them. Horoscopes are stupid, but a harmless way for people to feel good about the uncertainty of life. Alchemy was a confidence racket, for the most part, but it eventually gave us chemistry. Even climate science has some utility, despite the massive fraud. Economists are fond of calling their racket the dismal science, but that’s not fair or accurate. It’s really just dismal quackery.