Physics has long been considered the canonical science. It is not the oldest mathematical science, since astronomy predates it by centuries but that discipline lacked an experimental basis. Physics deals with the inanimate world and so is free of the messiness and ethical constraints that complicate other disciplines that deal with living things. It has an empirical basis of observations and experiments and yet has a high level of abstraction that enables simplified models to approximate reality. And the mathematical framework in which its theories are expressed gives its predictions a level of precision and rigor.
As a result, other disciplines, especially those in the social sciences, that seek to view themselves as a science try to model their field along the lines of physics, something that is referred to in academia as ‘physics envy’. John Rapley, a political economist at the University of Cambridge, says that economists who fall prey to the allure of physics envy are making a serious mistake.
Two questions: is it good or bad that professional athletes earn 400 times what nurses do, and is string theory a dead end? Each question goes to the heart of its discipline. Yet while you probably answered the first, you’d hold an opinion on the prospects of string theory only if you’ve studied physics.
That annoys economists, who wonder why everyone feels free to join economic debates instead of leaving them to the experts, as they do with physics or medicine. What economists don’t usually admit is that, on a range of topics they examine, they often had an answer to the question before they began their studies. Scientists are supposed to reach their conclusions after doing research and weighing the evidence but, in economics, conclusions can come first, with economists gravitating towards a thesis that fits their moral worldview.
I don’t quite agree with Rapley who seems to think that scientists work purely inductively, arriving at their conclusions based on the data. The way that science works is more complicated than that as I discuss in my forthcoming book THE GREAT PARADOX OF SCIENCE: Why its conclusions can be relied upon even though they cannot be proven. It is better to say that physics theories are more tightly constrained by data than most other fields since there are usually fewer variables that need to be accommodated.
Where Rapley mainly finds fault is with the idea that the ‘laws’ of economics are as universal as the laws of physics and he says that the theoretical modeling which is highly prized and rewarded in contemporary economics ignores the fact that economic theories deal with the highly messy behavior of human beings and these are so dependent on context and history that any claim to universality is highly dubious, and ignoring this is what leads to major problems such as bubbles and crashes.
Unlike in physics, there are no universal and immutable laws of economics. You can’t will gravity out of existence. But as the recurrence of speculative bubbles shows, you can unleash ‘animal spirits’ so that human behaviour and prices themselves defy economic gravity. Change the social context – in economic parlance, change the incentive structure – and people will alter their behaviour to adapt to the new framework.
That’s something that ‘physics envy’ can’t capture – that the social nature of human beings makes any laws of behaviour tentative and contextual. In fact, the very term ‘social science’ is probably best seen as an oxymoron.
The apogee of economic ‘scientism’ came in the 1990s, a decade in which economists such as Alan Greenspan were lionised as gurus, Bill Clinton was describing globalisation as a force of nature to which governments had to submit, and whizzkid experts such as Jeffrey Sachs were jetting into one country after another advising former communists how to re-align their countries with this presumed natural order.
Hindsight has revealed the misplaced hubris of that decade, one during which Greenspan helped to fuel a speculative bubble that nearly destroyed the world economy, and the Soviet Union’s failed reform knocked seven years off its life expectancy. Many economists, Sachs included, defend themselves on the grounds that their advice was not actually taken: bad politics got in the way of good economics.
He reminds us that Adam Smith, considered by many to be the founder of this field, was a moral philosopher and that “economics has always been an ethical and social exercise, its purpose being to produce the rules by which a community organises its production” and that to ignore that human dimension with all its variability is to risk going astray in a big way.