Tuesday, 28 June 2011

Economic climate

I’m no economist, yet I find economics interesting enough to read a few blogs with leanings towards economics which I read pretty well every day. Two of my favourites (Mark Wadsworth and Tim Worstall) have a light touch with a plenty of humour, lots of miscellaneous material to ease the load and enough clearly explained contrarian economics to be interesting to the general reader. Contrarian with respect to mainstream media that is, which on the whole tends to mislead us about economics, as it does with many other subjects.

For me, an interesting aspect of economics is why it isn’t firmly entrenched as a fully-fledged science, even though it obviously is one. For example, there are plenty of practical experiments performed on the basis of economic theory such as interest rate changes by central banks, quantitative easing and changes in taxation. There is plenty of economic data too, much of it more accurate than some traditional scientific data.

If you compare our ability to perform economic experiments with our ability to perform (say) experiments on the climate, then we come up against the embarrassing fact that we can’t actually perform experiments on the climate. We can’t change a climate variable to see what happens, to find out if our theories stand up or fall to the ground. There have been some rain-inducing experiments of course, but they are local and not really about climate as a whole. So one-nil to economics.

I won’t try to push this too far, but as far as I can see, economics is generally more ‘scientific’ than climate science because of experimental practicalities. So in asking what we should do about climate change, how we should tackle the more extreme claims, then I’d say the views of economically literate observers may be more ‘scientific’ than those of climate scientists. Not that it necessarily gets us anywhere worthwhile, but I think these things are worth airing.

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