Economics vs. Astrology

Recently, in reply to my post about the mainstream media’s coverage of hurricanes and other severe weather events, a great friend commented that the climate experts, with their diatribes about “unprecedented” and “historic” weather, are analogous to economists, who build their reputations on pretending to be able to explain the “unexpected” ebbs and flows of the market — as opposed to real experts on practical matters, who should be able to reliably predict outcomes, rather than pontificate on outcomes they cannot predict.

My friend’s analogy between climate fearmongering and the so-called science of economics appealed to my almost bottomless disdain for the social sciences in general — academic mires of progressive hokum for which the prefixes “quasi” and “pseudo” are not strong enough, and even “quack” often feels too mild. (I have discussed the social sciences here and here, for example, and economics here, here and here.)

In answer to my friend’s apt analogy, I carry his critique of economics one step further, as follows:

I have no patience for the quack-science of economics, which has even less grounding for its “truths” than do most of the other social sciences. In fact, I would place astrology at a higher level of scientific verifiability than economics, since at least the astrologers base their theories on events (heavenly motions) that are universally observable, constant, and genuinely predictable in a way that can be backed up with thousands of years of reliable predictions. The moon is the moon, and moves the same way, without exception, for everyone everywhere, and always. If someone wants to say it has certain effects on personality, fine, have fun; at least I know what we are talking about, and can assess the value of what he says based on my own observations of the same universally unchanging causes and their alleged effects. The economists, by contrast, ground their pseudo-theories on little more than questionable assumptions, partially-observed contingencies, and wild guesses based on personal preference or their immediate surroundings at this moment.

In other words, if an astrologer is going to try to persuade me of his theory, he might begin by saying, “You know how the sun seems to move through the twelve constellations, right? Well….” And up to that point, I’ll be with him, because I do know that really happens, and I cannot deny it.

If, on the other hand, an economist wants to persuade me of his theory, he might begin by saying, “You know how all behavior is, at base, motivated by the desire for material profit, right? Well….” He has already lost me.

This does not mean that there are no rational inferences one may draw about the dynamics of “the market” (the free exchange of goods and services) based on a broader understanding of human nature and motivation. It means that the progressive leftists (Paul Krugman), progressive rightists (Milton Friedman), and progressive talking heads (Larry Kudlow) who dominate and thus define the politically interested soapbox that is passed off as the science of economics today have no such broader understanding of human nature, nor any tools with which to seek such a broader understanding.

In other words, Adam Smith may have been about the last genuine practitioner of economic theory in the proper sense, inasmuch as he was discussing the vectors of voluntary exchange in the context of some sort of general picture of what a human being is (metaphysics), what a human being should be (morality), and what motivates human beings as such (psychology). He was also discussing economic behavior in the final stage of history before this discussion broke away from its philosophical moorings and decided to go it alone as an academic specialization unto itself, i.e., before theorists believed that there could be “premises of economic theory” existing in isolation from the rest of human understanding. Once that error insinuated itself into this field, it was only a matter of time — as with all the other “social sciences” after they broke away from philosophy proper — before economics degenerated from the error of imagining its premises could be regarded as permanent truths independent of the study of human nature, to the deeper folly of mistaking their isolated premises of convenience as the essential truths of human nature, a folly that has led to every kind of silliness and anti-theoretical speculation, from Marx’s theory of surplus value at one extreme, to Friedman’s defense of greed as the moral basis of capitalism at the other.

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