Economic policy lies at the heart of some of the disagreements between Liberals and Conservatives. Cut taxes. Raise taxes. Privatize social security. Institute universal healthcare coverage. While some of the motivation for each of these actions may be an extra-economic consideration ("It's the right thing to do"), there is an implicit assumption that there will be a connection between a certain policy, and its economic consequences. But that assumption entails a far more fundamental, and much more important, assumption: That there is a fact of the matter about economic transactions. And lets face it: if you don't have that assumption, there's no point in arguing for one economic policy over another.
So: if, with respect to some social goal Y and some economic policy X, you're going to say "we should do Y" and then say "X will accomplish Y, so we should do X" you are committing yourself to a link between an economic state of affairs and a resulting social state of affairs. This is something that should be empirically testable, and which, therefore, should fall into the purview of (waaaaaaaaaaaiiiiiiiiiiiit for it...............) science!
So: Liberals and Conservatives will trot out their favorite economists, who will then trot out to argue why the proposed link between X and Y obtains. Or does not obtain. Depending on the political orientation of the economist. WTF??
It seems both sides are caught in an existential contradiction. On the one hand, in arguing for a given policy because of a certain (desired) social goal, they are implicitly asserting that there is a fact of the matter with respect to economics. But by trotting out, in support of their position, someone in a discipline where what they state is a function of their political orientation, they are denying such a robust, objective connection exists. Hmm.
Something is rotten in the state of Economics.
As I see it, we have two, and only two, options. We can give up on the idea that there is a fact of the matter about economics. We can, effectively, be economic nihilists: it just doesn't matter what our economic policies are, because there is no connection between them and the economic results. Well, if that's really what you think than you really should be a Libertarian: because whether the policy is one thing or another, the results are epistemologically unavailable to us. Kill 'em all and let God sort 'em out.
Since nobody argues that, then you must be in the other camp: there is a fact of the matter about economics. But if that's the case, there is a real answer as to whether the link between X and Y obtains. And that means either the liberal economist or the conservative economist is wrong. Yet the discipline of economics has been going on its merry way for TWO HUNDRED YEARS NOW, and still hasn't figured out how to answer a simple yes-or-no question? For crying out loud: train 2 economists with differing political views for 10 years, giving them identical educations in economic theory. Train 2 monkeys or reasonably adroit 5 year olds how to flip a coin. Ask the economists an answer; then ask the boys to flip their coins. You should get reasonably consistent answers from either group.
Something is wrong with economics.
I clearly do not fall into the economic nihilism camp. Yet, if there are any genuine economic facts, then it seems they should be discoverable. Yet, after two centuries, the academic discipline of economics has failed to position itself in a place to discover them. Economists will argue all sorts of reasons why: economic conditions are never perfectly repeatable, so you can't really do scientific investigations of them; economics is a science about humans, so free will and human variability gets in the way of prediction; economic systems are chaotic and so prediction isn't feasible; etc. I don't really buy them. Oh, I'm sure they are applicable at some level; but I don't think they explain why economists can predict diametrically opposed conclusions from the same sets of assumptions. And the predictions certainly shouldn't depend on the political inclinations of the predictor! No, I think the issue is deeper than that. I think there is a fundamental problem with the discipline of economics itself, and that this is in part responsible for disagreements between Conservatives and Liberals on economic policy.
And that is why I am writing this blog.
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