Economics as a Science and in Context

One of the first things I noticed when reading the Worldly Philosophers was the intense, perhaps excessive, detail with which Heilbroner describes both the personal lives and qualities of the great economic thinkers as well as the historical context in which they lived. At first, this level of description confused me slightly. In my prior studies of economics, texts have always focused on the ideas of thinkers, rather than their lives, histories and quirks. Approaching economics as a “science”, this makes a certain degree of sense. If economics truly is a science in the sense that, say, physics is, then we should not care much for the history of those who discover its laws or the societies in which they lived. Information like Karl Marx’s marital infidelities with his unpaid maid or Adam Smith’s strange walking patterns and intense periods of absentmindedness may be interesting to the trivia buff, but how much they can tell us about economic thought – its content, direction, and so forth – is at the least doubtful.

Yet at the same time, Heilbroner’s descriptions, particularly of the political and historical context for the birth of major economic ideas, shows a significant way in which economics diverges from traditional, hard sciences. Given the information Heilbroner presents, it would seem that at different points in history since the birth of capitalism, different theories have greater explanatory and predictive power than others. For example, Ricardo’s concern about landlords and rent may have been incredibly relevant to the society in which he existed; however, in the modern United States, where we currently pay farmers not to farm, such concerns about agricultural landowners reaping all the benefit in our economy seem fairly moot. Similarly, Marx’s concern about the business cycle may not have made any sense to people of Smith’s time; nor would his ominous predictions hold much credence after World War II and the recovery from the Great Depression, particularly in the United States where increasingly painful business cycles all but disappeared (at least through the 1950s and 1960s).

Indeed, so many of the assumed constants or axioms of these various worldviews have changed entirely since these views were first developed. Perhaps the example that stood out most to me was the belief that increased wages were in a sense self-regulating as they would lead to a higher quality of life for workers, which meant higher rates of reproduction and rearing healthy children to adulthood to become more workers. Just the idea of this sort of trend – let alone accepting it as the norm – seems so remote to the modern world simply because the technological and scientific advances allowing workers to regulate reproduction effectively have become so ingrained into our society (particularly in the West) that they are the norm – the new constant. In physics, on the other hand, you generally do not see this sort of upheaval and change in underlying assumptions. Constants stay constant (at least within the known universe); they do not depend on the time period in which they exist. While hard sciences such as physics may undergo intellectual revolutions, it would seem that economics undergoes actual revolutions, that is, drastic changes in the actual functions it attempts to describe.

Because economics seems to differ so drastically from other sciences in this way, one wonders how much economics truly can offer in terms of predictive power. Another crucial question is how much we can develop an understanding of economic thought that will remain relevant in the very long run, given that economics studies individuals and societies, both of which are inclined to undergo massive changes over time. I do not doubt the potential for intelligent, well-constructed theories, ideas and models to provide insight for shorter periods of time (which, as in the case of Keynes and his warnings against the flaws of the Versailles Treaty, may mean decades). However, it seems doubtful that even the brightest thinkers of any age could predict the functions of an economy belonging to an era that is otherwise unfathomable to them. Without any possible understanding of the culture and historical context of a society, they cannot know the economic axioms or “constants” of that society and cannot develop a proper theory based upon them. Perhaps if determinism is correct and we reach adequately “scientific” understanding of politics, culture, and other social phenomena, we will be able to accurately model economic growth several centuries into the future. If that potential exists, we certainly have not yet reached it. At the least, it seems that until we can reach such a point, economics is a study that must necessarily question and review its central precepts for accuracy if it wishes to stay relevant and informative simply because it depends so heavily upon the historical context and the society within which it operates.