Re: Economics is not a real science; it is cargo cult science.

Bob Kolker wrote:

Irrelevent. The predictions are, in principle at least, testable.

Many of the economics predictions are also testable. Supply demand curve is
one quite well known.

In many cases the problem is either you don't have the models that account
to all the variables, either there are variable you can not measure
accurately enough.

Econometrics, in part, has some huertistic virtues in that economic
activity can be measured. But economic theories, by and large, are
untestable, particularly those which are based on utility. My utility
and yours are incomperable and incomensurable. In fact utility is never
observed, only preferences and choices are observed.

Can you in physics trace the path of every photon from a ray individually ?
Forget it. However, you can calculate quite well how a ray of light behave.

I agree that it is an exercise of futility to compare individual by
individual utility to calculate if the Porn DVD bought by A have more value
that the (C)Rap DVD bought by B.

However, you can measure on a large population the:
- school dropout rate
- death rate
- criminality rate
- consumer confidence
and many many other indicators

The you can check, how these change into a poor neighborhood after an
increase in minimum wage. Then you can check how the same indicators
changed into a population representing the business owners.

Then you can compare, how the move of the money from the owners to workers
as a result of increase the minimum wage affected this indicators.

If the dropout rate in poor is reduced to 5% (1000 poor) and the dropout
rate into rich increased with 0.5% (1 rich) then you can calculate quite
easily that the movement of money from the rich to poor actually increased
the utility.

So while on individual base doesn't make any sense to do that, the averaging
weather out all these differences, and you can apply the utility functions
quite well.

The only reason that prevent you to do this kind of statistically backed
utility comparisons is if you believe that the poor and rich have different
values as human lives. And here we enter again the mined field of ideology
and belief and we left the realm of science.

.

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