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Copernican Economics
Why the “dismal profession” is still more creed than science
Economics is nominally the study of how economies function. As economies consist of large numbers of quasi-independent actors providing and consuming a wide range of inputs and outputs, it’s clearly infeasible even with today’s powerful computers to attempt to capture and model every single element and interaction within a modern economy. Economists therefore, just like chemists and physicists and biologists, create simplified models in order to elaborate fundamental principles and see what kinds of alterations result in what kinds of effects.
Economists tend to be quite attached to their complex mathematical models, much as doctors used to be attached to leeches (in both methodological and literal senses of the phrase) and small children are attached to their favorite soft toys. Complicated equations provide a comforting impression of scientific precision, the attainment of which is important throughout the so-called “social” sciences which generally lack proper empirical foundations. Sometimes these models can be very helpful, providing insight into phenomenon that are so large they are invisible to us working at the ordinary human scale.
But like all models, if one or more fundamental assumptions are wrong then the entire model is invalidated. Any policy proposals resulting from such…
