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Enough Already With The Sweeping Claims That Economics Is Unscientific

This article is more than 9 years old.

Pascal Gobry wants you to stop thinking of economics as a science. That's the gist of his piece, but really the underlying point is he wants you to take economics less seriously. I think he's wrong about economics, and wrong about science.

Let me just start by pointing out that it is not the case that "almost nothing in economics is actually derived from controlled experiments". Look at the CV's of economists like John List and Esther Duflo and you can see there are plenty of experiments being done. In 2013, the study selected as the best paper from American Economic Journal: Applied Economics was for a randomized trial on how teenagers respond to HIV risk information.  If you want a concrete example of where this has made a difference, randomized treatment has been a central part of the research on the effects of charters schools. Unlike the field of astronomy, which Gobry must also think is not a science, economists do sometimes have more than observational data to go on.

And while it is true that a lot of research doesn't use actual randomized trials, it's also true that other kinds of research are very useful and informative. If his point was simply to argue that experiments and replication are important, and whether or not a body of research includes this should be one input among others in weighing the evidence, I'd have to agree. But of course you'd have to include external validity in there, which often counts against randomized trials. Instead of a relatively common claim about how it would be nice to have more experiments in economics, as is his style, PEG boldly overstates his case and makes incorrect absolutist claims about the importance of randomized trials.

What's more, he dresses up this pretty common point that randomized trials are useful with a lot of snide jabs meant to lower the status of economics in everyone's eyes. For example, he argues:

"Countless academic disciplines have been wrecked by professors' urges to look "more scientific" by, like a cargo cult, adopting the externals of Baconian science (math, impenetrable jargon, peer-reviewed journals) without the substance and hoping it will produce better knowledge."

So does he think economics would be improved without the use of data, statistics, theory, and peer reviewed journals? Basically that would turn economics into nothing more than free-wheeling, groundless, story telling about the economy. You can find this kind of economic writing all of the place now, for example in the panicked moralizing of hyperinflationists, and the zany claims of gold bugs. Without tools that economists use we'd simply have stories versus stories instead of actual evidence. To argue that economics should be nothing but randomized experiments and free wheeling punditry would throw out a lot of awful useful research.

Gobry's complaints here remind of Russ Roberts. He's an economist who regularly complains that economics is less scientific than it thinks, and says things like he doesn't think economists really know what much more about the world than we did 50 years ago. But then Russ also has perhaps the best economics podcast in the world where he interviews leading economists about their research. It's true Russ often provides a voice of skepticism, pushing back and asking hard questions. It's a great part of the podcast. But the vast majority of the time Russ is clearly having people on because he thinks we can learn from hearing about their research. He's hardly constantly disagreeing with them like you'd expect if he thought most of what they have done doesn't tell us anything.

It begs the question, if economists haven't really learned anything in the last 50 years then why in the world would you spend so much time interveiwing economists about their research?  Why not interview economic historians about what economists were saying 50 years ago? There is a huge disconnect between Roberts' intensely skeptical attitude when he makes sweeping statements about the field, and the content of his detailed conversations with experts, and really the entirety of his Econtalk project.

Overall, I disagree with the notion that a science needs to be stricly randomized controlled trials. But more importantly, for people who understand empirical methodology, the question "is this science?" is basically useless. Instead we ask detailed questions about causality, robustness, bias, heterogeneity, external validity, etc. In doing so we learn a lot about how much weight we should put on various studies and estimates. And by the way, a lot of the "math, impenetrable jargon, peer-reviewed journals" that Gobry finds so cargo-cultish is quite useful here.

Instead, whether something is "science" is most useful to convey to the layperson how much weight they should put on various research. And to this end I think Gobry is completely wrong that "randomized trials good, non-randomized trials bad" is a useful heuristic. After all, there are plenty of randomized trials done with 12 people in laboratory conditions that have little to do with reality that should receive little weight in our beliefs. And there are large scale, well-done econometric studies that should be given a fair amount of weight in our beliefs. Whether something is a randomized trial or not is but one dimension among many in determining how we should think about it. If you need to boil what is scientific down to a single heuristic, a better criteria than "randomized trials or not" is whether it is falsifiable. You can falsify a lot without randomized trials. The long-run Phillips curve, the idea that productivity shocks can fully explain the business cycle, the claim that the gold standard will lead to economic growth, and a litany of other zany ideas have been thoroughly debunked by economists using tools that Gobry finds unscientific. While there may not be as many economic claims that we know are true, there are certainly a good amount that we know are false.

Trying to paint economics as unscientific may be useful for those who wish to fill the vacuum that such excess skepticism would create with their own baseless, data free stories about the economy. But it is not useful for people wishing to understand the world.

Scientist? (Photo credit: Wikipedia)