Is Economics More Like History Than Physics?

Is Economics More Like History Than Physics?

By Jag Bhalla | August 16, 2013 |  12

Is economics like physics, or more like history? Steven Pinker says, “No sane thinker would try to explain World War I in the language of physics.” Yet some economists aim close to such craziness.

Pinker says the ”mindset of science” eliminates errors by “open debate, peer review, and double-blind methods,” and especially, experimentation. But experiments require repetition and control over all relevant variables. We can experiment on individual behavior, but not with history or macroeconomics.Isaiah Berlin pointed out that “because” is used differently in science and history. In science, it means reliably causal. In history, it means a looser, narrative kind of causation, a useful explanation of the complex web of factors affecting a particular situation. Since Plato many have privileged universal timeless truths. But history’s truths are typically particular and time bound, describing changes through time.

Pinker’s science needs types and theories. It assumes that phenomena “may be explained by principles that are more general than the phenomena themselves.” But Berlin noted that knowledge can be nomothetic or idiographic. “Nomothetic” means fit for law-like generalizations, having reliably repeatable regularities. “Idiographic” means much the same as the Hebrew word “da’at”: knowledge gained through direct relationship with the particular (not via theories or types). ()

Physics is fortunate to enjoy a kind of closedness that human life lacks. Nothing in physics chooses. And nothing it studies innovates. History and economics study things that can change how they act and react. So the methods of the inanimate sciences face extra challenges when used on people. Even statistics and probability can’t always help. Previously measured distributions can be upset by the spread of behavioral changes, making social systems less predictable.

Jerome Kagan notes that “19th century economists, mimicking the physics of the era…adopted the mathematics that physicists used to describe” inanimate equilibria. Many economists still use such methods. And macroeconomists try to model events essentially as complex as world wars, using (insanely by Pinker’s standards) the language of physics.

The Oxford English Dictionary says “science” originally just meant knowledge. In the Middle Ages, the seven liberal arts (grammar, logic, rhetoric, arithmetic, music, geometry, astronomy) were also called the “seven liberal sciences.” Shakespeare used science in that sense: “Cunning in Musicke, and the Mathematickes, To instruct…in those sciences.”

We risk blinding ourselves with science, in its now narrower highly reliable form. It is dazzling. But it also has limits. Its tools don’t fit all situations. Economics, especially the macro kind, has history-like aspects. Its narratives might be woven with data, but not everything that counts can be counted. It must deal with different kinds of change that (to paraphrase Shakespeare) were never dreamt of in our physics. Perhaps this limits economics to moderately reliable maxims.

Illustration by Julia Suits, The New Yorker Cartoonist & author of The Extraordinary Catalog of Peculiar Inventions.