The Wrongness Of Macroeconomic TheoryPosted: June 6, 2012 | Author: Greg Linster | Filed under: Macroeconomics | 1 Comment »
Every year John Brockman poses a question to the Edge community. In 2005, the Edge question was suggested by the theoretical psychologist Nicholas Humphrey, who wrote : “Great minds can sometimes guess the truth before they have either the evidence or arguments for it. (Diderot called it having the “espirit de divination”). What do you believe is true even though you cannot prove it?” Given my interest in epistemology, I found this question to be especially interesting.
Anyway, I recently read all the responses to this question that Brockman put together in the book called “What We Believe But Cannot Prove“. Since I’ve done it in the past (seeDigital Ambivalence), I thought it would be fun to answer the question myself, so here it goes.
I have a confession to make: almost everything I believe to be true, I cannot prove. Is it really possible that we can prove anything in the strictest sense of the word? Alas, I’m not sure that this question was intended to be so deeply epistemological in spirit.
Given that I’m a Popperian, I think the question becomes much more interesting when it is inverted: what supposedly scientific ideas that have not (yet) been disproved do you believe are false? Alas, the question was not actually inverted, so I’m going to focus my response on scientism.
My conviction is that macroeconomics is not a science — we don’t know much (if anything) about macroeconomics. I’m not sure what amount of evidence it would take to make us realize that we don’t know much when it comes to macroeconomics, but I believe that almost all of our theories about macroeconomics are wrong and our scientific approach to it has backfired numerous times. I prefer to think of economics as an applied branch of philosophy.
If the evidence from the financial crisis of 2008 didn’t falsify some of our theories about macroeconomics, then I’m afraid no amount of evidence will be satisfactory to do so. Despite the fact that I can’t disprove (again, in the strictest sense of the word) that most macroeconomic theories are false, I nonetheless still believe they are false.
Now, I turn the question to you: what do you believe is true even though you cannot prove it?