All nine of this year’s American Nobel Prize laureates shared a stage this week. Not surprisingly, economists Robert Shiller and Eugene Fama sniped at each other, if good-naturedly. But it was the winners from the harder sciences who got the best digs in at the economists. Martin Karplus, a chemist from Harvard, queried, “What understanding of the stock market do you really have?” He even went so far as to note that economics – “if one wants to call it a science” – seemed completely unable to explain market movement. There were others, but you get the point.
The obvious takeaway is a common theme — that economics is conflicted flawed divided wildly inconsistent worthless, a point that has been made by Nassim Taleb, Jeremy Grantham and many others. The idea is that economics desperately wants to be a science, with “physics envy,” but simply isn’t up to the task. And it’s hard to contest the point.
My disagreement is not so much with the main point (even though I think academic economics has a good deal to offer, with Shiller’s work being Exhibit A in my evidence cache), but with its corollary and the casual certainty with which that corollary is expressed. “Hard” scientists increasingly express a belief that their domain is the only bastion of reality available. They see a great divide between things we can know (science) and everything else, which is opinion at best and largely worthless. That the expression of it is so often humorless and irony-challenged makes it all the worse. Continue reading
Above the Market 