ShareThis Page
Seeing with reason |

Seeing with reason

A frequent complaint about economics is that the failure of most economists to predict the 2008 financial crisis means that economics isn’t really scientific.

It’s true that most economists didn’t predict the crisis, but the ability to make such specific predictions is not the hallmark of science. Many sciences — such as astronomy and chemistry — do make specific predictions, but not even all physical sciences specialize in such predictions. Biologists, for example, cannot predict what forms of life will be destroyed by natural selection and which will emerge to replace the defunct forms. The course of natural selection depends on far too many unforeseeable details and random events to enable biologists to predict which specific forms of life will perish and which will flourish over time.

Biologists can , though, make “if-then” predictions — such as, “ If the Earth’s average temperature rises by 12 degrees Celsius over 20 million years, then the number of life forms suited to a warmer climate will grow relative to the number suited to a cooler climate.” This prediction is valid and instructive, yet vague. For starters, it avoids taking a stand on whether the Earth’s temperature will rise. Second, it says nothing about the kinds of life that will emerge if the climate warms. Will the new creatures be mostly reptilian? Or will mammals thrive by shedding their body hair, by slowing their metabolisms or by any of dozens of other possible adaptations?

No biologist can answer such questions. Yet no one doubts that modern biology is a true science. Biology supplies a way of thinking that improves our understanding of reality. Biology enables us to understand what we observe around us, and in the fossil record, better than does any alternative explanation, such as biblical literalism.

And so it is with economics. Economics is a systematic way of thinking that improves our understanding, if not our ability to make specific predictions. The economist understands, for example, that raising the minimum wage makes low-skilled workers less profitable for employers to hire. Therefore, concludes the economist, the higher the minimum wage, the fewer and worse are the employment opportunities open to low-skilled workers.

The economist doesn’t predict that hiking the minimum wage will necessarily cause an actual increase in the rate of unemployment of low-skilled workers. Rather, he reasons more modestly by pointing out that hiking the minimum wage worsens the employment prospects of low-skilled workers compared to what those prospects would be without a higher minimum wage. The economist understands that a modern economy is an astonishingly complex, dynamic and huge system in which changes in one part often offset or mask changes in another part.

Consider a physicist standing on a beach and observing feathers floating in thin air. This physicist would not conclude from her observation that feathers are immune to gravity. The physicist understands that gravity works on feathers no less than on steel anvils, but that this effect can be masked by other forces, such as wind. So, too, does the economist, upon observing that a higher minimum wage is not followed by higher measured unemployment, not conclude that a higher minimum wage inflicts no harm on low-skilled workers.

The good economist, in short, sees with his reason that which is often invisible to his eyes.

Donald J. Boudreaux is a professor of economics and Getchell Chair at George Mason University in Fairfax, Va. His column appears twice monthly.

TribLIVE commenting policy

You are solely responsible for your comments and by using you agree to our Terms of Service.

We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.

While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.

We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers

We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.

We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.

We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.

We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.