Moral: Wherein we consider more background, such as some 'problems' related to economics.
While looking at EconoSpeak, I found a post with 'Economics is not a Real Science' (09/23/11) in its title. The theme of the post refers to the recently obtained data that might suggest that changes may be needed to Einstein's view.
That is, if the data turn out to be correct. A whole lot of analysis is needed to remove any doubt of measurement error.
There was a remark that many didn't want their names associated with the findings, just in case there were errors found. Evidently, avoiding such a stain means more in that scientific world than it does in the dismal one of economics.
That is, just as we've claimed that changes are pushed out (like some of the recent Big Ben moves) without any framework for seeing how it works. The 'cowboy' mode is used in some circles to describe this sort of thing.
Dorman uses the concept of types related to hypothesis testing. In fact, he points back to an earlier post: Annals of Unscientific Economics (04/05/11).
Before proceeding, comments to these two posts bring in a couple of blogs that are of interest.
- Maison Fluery -- makes the very correct relation of economical thinking with systems analysis which then can be used to show that the monetary system is unstable. Is that arguing against fiat money? Of course, it's nice to see Minsky (7oops7, Truth engineering) brought into the argument. (see Comment at the 9/23 post)
- Very Deep Left -- on the dogmas of economics. (see Comment at the 4/5 post)
Science must (can afford to) be consistent, since it cannot be complete. Even with all of its effort, you can expect to find problematic findings. Why? There is no science that is not filtered through the human experience.
On the other hand, can economics get away from the human frailties? Perhaps, if it dampened those who perturb at the top (firming up the basis might help here). Bottom up? Yes, all sorts of initiatives, such as neuro-economics, need to be pursued.
Too, though, effort ought to be put into a 'sandbox' with which to maintain a little more stability.
How? Well, that's why we're here.
09/29/2011 -- The question remains. Even with 'financial engineering' what is the science behind finance? Gaming, only? Who has the basic ontology (other than wealth for the few)?
09/27/2011 -- Science cannot be complete, therefore it can spend its time (and energy - enormous requirements) on being consistent (or, more formally, sound). Yet, we cannot wait for science in our daily lives; nor, can we entirely run ourselves on this limiting (yes) viewpoint.
Engineering (as one of the application frameworks) uses much more than 'science' in its achievements.
Economics is different from (some) science , as it deals with people and their lives. The reality is that Economics uses types of compactification as the basis for arbitrary (some better founded than others) closures that then are, or are not, operationally effective. Our problem is that this creative effort can be stable, if done in a mature manner; yet, it is mostly pirated (and made unstable) by those who take advantage of situational opportunities (because they can or are allowed to; or, because we are all idiots in their view).
A good example of the situational is what is called the 'quants' (original post) phenomenon. Supposedly done by the best-and-brightest, this type of activity essentially exploits differences (as in, that which is behind volatility) in a manner that is not unlike siphoning off the cream. The net effect (near zero) is an almost guaranteed impoverishment of the many whose health and welfare serves as the source. The sink? Of course, the pockets of the fat cats and their players.
People, these types have 'played' with us, humanity, forever. It is time to grow up and let them know that we are more than mere commodities (kleenex metaphor applies) for their use and exploitation.
How to do this? Again, that's why we're here.