So … just normal economics. If that school of “science” was more than retconning and trying to see ideologically aligned patterns in the irrational noise and result of complex interwoven incentive systems that would make the complexity of the three body problem look tame, we probably wouldnt have a financial crisis every few years :/
For one thing, it's kind of like saying "if scientists really understood the weather, we wouldn't have tornados every few years". Or even better, "if we really understood climate change, we'd stop it". There's a big difference between understanding something and being able to do something about it.
Another thing, it's missing the nuance that financial crises could be handled better or worse, and it seems to me like it's getting better (e.g. compare the great depression to the great recession).
People like to dump on things they don't have much familiarity with, and software engineers and the HN crowd in general seems to think everything besides software is all noise full of uneducated people. (Not saying you specifically are an outsider to economics or a software engineer, but that is the general trend.)
Economics is not a reproducible science, because no system can be properly isolated and initial state can’t be reset. But it’s still a science. It’s in the same category as biology, or even sociology, and it’s way more accurate than the study of brownian systems like meteorology.
“If biologists were so good at their science, they’d all be extremely healthy”?
“If sociologists could predict what humans think, they’d have a job”? In fact competent sociologists do, and generally in marketing departments. Same for economists.
If a single economist (or anyone) could predict the future, they'd be wealthy because they could bet against the prevailing wisdom. If a lot of people predict the future, and share their guesses, then those predictions are the prevailing wisdom and there's nobody to bet against.
Placing bets successfully needs way more than a general understanding of what might happen (and, of course, capital). Also, you conveniently ignore all the economists that got rich in financial markets over the years.
Maybe academic economists don't find it interesting to 'simply' make money and find reward in our endeavours? Plenty of STEM folks could work on Wall Street as quants for way more money, but choose not to.
Paul McCulley (an economist) made certain predictions while working at PIMCO (as did Paul Krugman), and then he left and Bill Gross (PIMCO founder) ignored what he said and made certain financial moves and lost a whole bunch of money:
Gross is way richer than McCulley (or Krugman), and yet the rich guys got it wrong and the poor(er) guys got it right. If only Gross had listened to the economists (that worked for him).
Economists that made it in financial markets (examples): Cliff Asness, Barr Rosenberg, John Paul Tudor Jones, Stanley Druckenmiller, Kenneth Griffin , John Paulson (but that's an MBA) - is that enough billionaire economists for you? What exactly made each rich is a bit more tricky, but certainly Asness and Rosenberg got rich based on their research.
> Kenneth Cordele Griffin is an American hedge fund manager, entrepreneur and investor. He is the founder, chief executive officer, co-chief investment officer, and 80% owner of Citadel LLC, a multinational hedge fund. He also owns Citadel Securities, one of the largest market makers in the U.S.
I don’t see economist anywhere in Ken’s Wikipedia.
You have a very low bar for classifying someone as an ‘economist’. I see why that’s the case as it does help your narrative but does not really lend much strength to your argument in my view.
What then is an economist or a physicist or a mathematician etc. when graduating with a degree in the respective field isn't it? What additional thing needs to be there?
Just saying it doesn't count is a bit weak because that is saying training in a certain discipline and graduating in it has no meaning or skill transfer of relevance.
How about holding that title professionally? Or maybe just having him call himself an economist at some point? But your opinions are just that, and my opinion is your arguments are without merit.
I find it interesting that you know that the people on the list never ever referred to themselves as an economist.
But I guess your point is to make sure that economists don't have any successes, not some deeper introspection into whether the study of economics can help in being successful.
Yup, that did it. I am now convinced that some classes Ken took 45 years ago make him a modern day, professional economist. Guess I’m an economist too! I’m sure Paul Krugman would love the comparison.
Yup, just like there few that would consider themselves philosophers just because they took some philosophy classes in undergrad. Glad we have found some consensus on this.
Why does Asness' PhD in finance under Farmer not count, for example? Is a financial economist not an economist, i.e., things like the EMH are not part of economics? Why do you think their training in economics was irrelevant?
What rational actors? Could you share some sources showing that individual economic choices are mostly driven by a cost-benefit analysis to determine whether an option is right for them? As opposed to being driven by habit, emotion, and social customs?
The rational choice for food would not lead to an obesity and diabetes epidemic in the wealthiest country. Something doesn't add up.
Ok, so you couldn't give sources for your first claim, so now you're moving the goal posts.
Let's try again. Can you give sources showing that AI effectively models the economic decisions of non-rational actors? Anyone who can predict the economy should be able to quickly become very wealthy.
Don't you end up having a problem with recursion? The people who use AI to predict the rational actors in the economy are actors themselves, and need to be included in their own model. Then you have others trying to predict what that model will say, etc.
> If that school of “science” was more than retconning and trying to see ideologically aligned patterns in the irrational noise and result of complex interwoven incentive systems
There was a physicist (Feynman?) who once joked that his job would have been much harder if particles had free will.
But there are regular experiments that are run in the realm of economics and various models make different predictions. It turns out that tax cuts don't pay for themselves, as some say:
Turns out QE wouldn't devalue the currency and cause hyperinflation (as some said it would):
> We believe the Federal Reserve's large-scale asset purchase plan (so-called "quantitative easing") should be reconsidered and discontinued. We do not believe such a plan is necessary or advisable under current circumstances. The planned asset purchases risk currency debasement and inflation, and we do not think they will achieve the Fed's objective of promoting employment.
There are certainly areas where things can get complicated and there's room for debate, but in other areas the mechanisms are understood.
Just because some folks choose to go with ideology over accurate models does not mean we don't have accurate models: is it the fault of medicine that some people say vaccines and masks don't work for ideological reasons?
It’s also common for economic ideas to be taken out of context. In an environment with 99% tax rate it’s beloved that lowering taxes will increase revenue. This is directly applicable when the sudden loss of government subsidies creates an effective 90+% tax rate within an income band resulting in people working less. Yet, politically the idea gets simplified to lowering taxes will always increase revenue which is false.
Austerity to the point of being able to pay down government debt is painful, that’s well known. Unchecked spending and unlimited growth in debt is however unsustainable.
>Yet, politically the idea gets simplified to lowering taxes will always increase revenue which is false.
Also this usually works short-term because companies and people still have the infrastructure from previous government spending.
When that infrastructure inevitably crumbles because the taxes don't suffice to support it 10 years down the road, it's too late, the infrastructure needed to create new businesses will be missing, leading to a downward spiral for the economy.
> Yet, politically the idea gets simplified to lowering taxes will always increase revenue which is false.
It's not so much that the idea was simplified to push a political agenda: Arthur Laffer himself, when popularizing the concept (with the eponymous Laffer Curve[1]), used it as an argument against tax raise in the US.
So the big problem with economics is not so much that its results are being hijacked by politicians to push their agenda, it's that most of them (at least most of the prominent ones) are in fact pushing their ideologies through their publications.
But it is the same argument just at different points on the curve. Using the curve to argue against a tax raise just implies you are on the optimal point [for raising revenue] or somewhere to the right and arguing for a tax cut implies you are somewhere to the right. Notice both arguments have similar assumptions and the only difference is the unlikely possibility you are at the optimal point. Of course one of those arguments is stronger because it does include this unlikely possibility but not much stronger. I think the main argument is whether you are to the left or the right of the curve not whether you are at the optimal point.
Also, I’m assuming it’s unlikely the government has set the tax rate at the optimal rate to maximise revenue. But this assumption is probably dubious because even without explicit knowledge of the curve governments are probably pushed towards the optimal rate.
Popular/Prominent economists are generally tied to politics.
“The basic concept was not new; Laffer himself notes antecedents in the writings of the 14th-century social philosopher Ibn Khaldun and others.”
IMO, it’s says less about economics than it does democracy. You can find many “think tanks” which are paid to create papers in support various ideologies. This doesn’t guarantee what they are saying is incorrect, but it does many they gloss over any inconvenient caveats.
I don't disagree with you here, but the problem isn't just think tanks at this point, academics have been doing it as well, with university departments having their ideologies of choice for decades, and it's a self-reproducing situation since they select they students/researchers based on their views.
