Is Economics a science or a religion? Economists have fought hard to have their discipline recognized as a hard science, sometimes even looking down on softer disciplines such as sociology, due to the empirical and data-driven nature of their research. However, in a recent article in the Economic Times, Mark Buchanan (the physicist and economic commentator; not to be confused with the pastor and spiritual author of the same name) makes the case that economics is not as objective as it seems to appear. He notes that economics is very goal driven; once an economic goal is selected, economists general do a good job of finding the mechanics and principles to maximize efficiency and increase output. However, Buchanan asks, how are the initial goals selected? His argument: faith. Advancing a similar thesis put forward by economist Robert Nelson, he maintains that most Western economists have a set of values that they believe are unquestionably good, and that these guide the entire economic discipline. Economic policy is thus not devoid of subjectively selected values, but rather is instead “dressed up to look like objective science.”
He discusses, as two brief examples, the ideas of labor unions (which most economists think are bad) and the encouragement of privatization in Russia at the end of the cold war (which most economists thought was good) and points to the unintended societal and political costs of those decisions. Economists could claim success based on the goals they were pursuing, but should they really define these developments as successful? Should we?
While I don’t know that I agree with him on every issue (and gladly admit that I am no specialist in the field), I think Buchanan has an interesting and important point to make: that the goals and values of economics are subjective and thus ultimately suspect and open to debate, despite the objective principles used to pursue efficiency and maximize output after a goal has been identified. What do you think? Are economic values ultimately a matter of faith? Are economic objectives ultimately subjective? Why do you think so?
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