Economics is not fulfilling its true potential as a science

[Smartvirus]

Even while driving, you’ve got to hit some bumps on the road. It’s the way it is in my country. You can never win all the wars you fight, it’s a profit and lose market. You win some and you lose some. You can only hope that your profit out weights your loses.

Being an economist doesn’t make you a perfectionist that can solve all the problems arising in your immediate environment. You can only solve a few and maybe some theories would not apply but then, there are other theatrics that do applies in other aspects to living.

Like we can see in demand and supply curves,
Economies that produce more of what they consume and do more in export other than import would always have a fairly stable standard of living. These are some bases to stability and humanity is sure to create its own problems. We could only try!

[1714998256]

1714998256

[serjent05]

What do you think about economists, who study the theories of economics and brag about being vast in the study of economics, yet doesn't help or contribute sufficiently to control or stop world economic meltdown?  

I do not think they are to be blame for the economic distress. Economists are here and have knowledge about the economy but they don't have the power to implement what they know.  Remember, the one with the power are those who are sitting in the government.  So do not blame them for the economic meltdown.  The situation is the same with a company that is getting bankrupt and you happen to know the situation and know the solution but you are unable to help because you are not affiliated with that company thus you have no rights or authority to fix such a problem.

[hatshepsut93]

What do you think about economists, who study the theories of economics and brag about being vast in the study of economics, yet doesn't help or contribute sufficiently to control or stop world economic meltdown?  

What meltdown? The global economy is growing, global poverty is declining, developing countries are developing. We just recently had a global pandemic and we handled it quite well, it didn't become a Great Depression 2.0.

So far all the dooming about the repeat of 2008 crisis has been proven wrong. This of course doesn't mean that there will never be a crisis, but to say that the field of economics is useless and yielded no results sounds absurd to me. Today's economy seems more resilient because the hard lessons of crashes were learned.

[Don Pedro Dinero]

What do you think about economists, who study the theories of economics and brag about being vast in the study of economics, yet doesn't help or contribute sufficiently to control or stop world economic meltdown?  

Economics is a social science, not like physics, where there tends to be more consensus, and yet in physics there are paradigm shifts. To this we have to add the fact that ideology is imbricated in economics, which makes objective knowledge more difficult, so to speak. But there are things on which there is consensus and they work, such as, for example, that raising interest rates serves to lower inflation, and lowering them to stimulate economic growth.

Regarding the meltdown you ask about, it is relative because a left-wing economist will tell you that what is going wrong is because not enough regulations and state control have been established and someone on the right will tell you the opposite, precisely that the economy is going wrong because it has not been deregulated and liberalised enough.

[stompix]

Even while driving, you’ve got to hit some bumps on the road.

I just thought of a way to explain to OP the difference between theory and the economy as a model of study and real-life application.

You can build a car that is perfect, it runs smoothly it can drive at any time anywhere, it has a billion sensors, the car will be great except the moment you're driving legally and carefully and a drunk driver is swerving on your line coming 200 km/h at you and totally destroys you!
It was not your fault, not your car's fault and nothing could have prevented this from your side of the story.

Same here, there is no way to prevent some of those things, if you go into 5 or 10 years bonds, how can you make sure
- a virus doesn't screw the whole economy
- a war doesn't start
- an asteroid doesn't hit the earth
- Hitler's grandson doesn't become president of Bartovia?

Then the economics formal theory and mathematical theory are now handicapped by impractical assumptions or directly contradicted by real world data.

2+2=4
Unemployment Rate= Total number of Unemployed / Total number of employed individuals.
Both of these are correct even if I spray my leg, even if my country is wiped by a nuke, 1000 years from now those formulas will still stand and will be right.

But if I take a loan of $100 a month and I have a wage monthly of $5000 everything works fine and there shouldn't be any problem unless I take up drinking and gambling I lose my job and I have no money and no willingness to pay back. This is no longer science, it's no longer theory, it's just shit that happens and and you can't know if will happen or not 10 years in advance because science doesn't do crystal globe readings.

What meltdown? The global economy is growing, global poverty is declining, developing countries are developing. We just recently had a global pandemic and we handled it quite well, it didn't become a Great Depression 2.0.

So far all the dooming about the repeat of 2008 crisis has been proven wrong. This of course doesn't mean that there will never be a crisis, but to say that the field of economics is useless and yielded no results sounds absurd to me. Today's economy seems more resilient because the hard lessons of crashes were learned.

It's the doom and gloom section, haven't you got used to it?

[gunhell16]

The world is growing fast and so is everything around us. The economy is evolving as well. For this reason, old methods may not work as we as they did in the past. Imagine people doing farming work in the past and earning while contributing to the economy. Now you can earn just by sitting in your room. The way of earning has changed so has the economy. Analyzing the data from the present will never be similar to the data from the past. So we will need new ways to deal with new problems.

Some old methods still might work, but that won't be perfect. You are limited to experiencing things that happen around you. You can also gain knowledge by researching other places, but still, you can not know everything. People may be able to solve many economic crises on a small scale but to do it worldwide, that's a tricky job. Because not everyone thinks the same way. Different people have different goals and motives. So even if economists are able to bring out a solution, not everyone will be able to follow that or not follow it intentionally. So it all comes to every individual. We have to think about ourselves. We need to help ourselves to secure our personal economy. That way it will help the country and others which will help the world economy.

With each passing of time, there is really innovation in all countries, where the old way is no longer used because the civilization that exists in each country has been upgraded. That's why we are living in modern times now that we have modern technology.

Today, the beauty of the economy of each country depends on whether the good economists who give advice to their leaders in each country will follow it. If they do, there will surely be a good result or growth in the country, but if a leader does not follow the good advice of an economist, the country will for sure have a crisis. That becomes the role of an economist in a country.

[karabiber]

What do you think about economists, who study the theories of economics and brag about being vast in the study of economics, yet doesn't help or contribute sufficiently to control or stop world economic meltdown?  

What meltdown? The global economy is growing, global poverty is declining, developing countries are developing. We just recently had a global pandemic and we handled it quite well, it didn't become a Great Depression 2.0.

So far all the dooming about the repeat of 2008 crisis has been proven wrong. This of course doesn't mean that there will never be a crisis, but to say that the field of economics is useless and yielded no results sounds absurd to me. Today's economy seems more resilient because the hard lessons of crashes were learned.

The western centered world financial structure effectively collapsed in the 2008 Crisis. The Federal Reserve Bank of the United States saved the system by printing money. The printed money was given to big banks and these failed banks were made to look as if they had not failed. This money printing operation was gigantic. In its 200 odd year history, the US had only printed around 825 billion dollars of money until 2008. America's huge industrial infrastructure, mega cities, two world wars, the cold war, the Vietnam War, the Iraq War, major scientific breakthroughs and the Moon Landing Project and so on... All of this was done with a monetary base of 825 billion dollars.

In 2008, in order to make it look like the crisis did not happen, the US printed 3.3 trillion dollars of money in a few years, about four times more money than it had printed in 200 years. Following the FED, the central banks of other developed countries also started a race to print money one after the other. If the field of economics is based on printing money in every crisis to cover the negativities of the system, then we cannot talk about economic development, growth and poverty reduction. The world is not the old world and crises are no longer experienced in the style of the Great Depression. I wish they were like that and it would be possible to come out of the crisis in a V shape, but the crises we are experiencing today are crises that spread over many years and are difficult to return.

[Gyfts]

It's not fair to lump all economists together. Economists like Milton Friedman and Thomas Sowell have been opining on the failure of government to follow basic economic principles for decades. Meanwhile, so called economists like Paul Krugman, conflate economics and politics, praising liberal failures in fiscal policy.

Economists opine on matters related to monetary/fiscal policy. The politicians act within their own whims, and it's entirely up to these politicians on who they choose to listen to. Economists are not in the position to form public policy, that's the job of the congress.

[Dunamisx]

What do you think about economists, who study the theories of economics and brag about being vast in the study of economics, yet doesn't help or contribute sufficiently to control or stop world economic meltdown?  

Economics is not a topic to just discuss without considering some other elements that also constitute it progress, there are so many people who think that this should be vested on one side than allowing the general participation of everyone being involved in the exposure we give to the economy, we are all interdependent of each other in an economy, for economical growth to occur, we must not rely only on the economist alone to sustain an economy.

[Kakmakr]

Why would Banks worry over someone else's money? The deposits are not their money.... so they can be reckless with their lending practices. We saw what happened with the fractional reserve banking in the previous crisis... Banks simply created "money" out of thin air and they gave loans to people that were not able to pay it back.

The governments look the other way, because they use tax payers money to bail out the Banks when they f@#$k up. The CEO's and managers got bonuses for the way that they supposedly "saved"  the Banks. 

[tygeade]

First of all, the economists are not the ones that implement the rules. They just advise and give their own professional opinion, it's left to the people with real power to effect change.
I remember a certain time in my country when economic and financial bodies were stressing that we were heading into a recession at this rate, no nobody listened. The people in government just kept on with their daily lives as if nothing would happen. IMF even made warnings. They told the central bank many times to take caution but nobody listened till we went into recession.
So how do these economists stop economic meltdown when people don't listen to them or take them seriously?
Some climatologists have been singing about climate change for a long time but nobody takes them seriously. Would you blame them for the natural disasters and hazards we face because they refused to listen?

Another thing is Economics is not a pure science. The theories don't give the same result everywhere at all times.
Chorine turns litmus paper white anywhere, but an economic theory needs certain factors to give certain results.
An economic or financial theory or system that worked in an Urban area might not work in a rural area.

This is true, there are a lot of professors who have shown how we could get out of the current situation we are in and nobody cared about what they said as well. It's just a shame that people spend decades into mastering one thing that can decide the lives of tens of millions of people and they are not cared about.

Why did this person learned it so much if we are not going to care about them anyway. It makes no sense that the people in power are not the people who have the information that we need, and the ones who have the information that can make our world better, are not the ones who are in power. This causes the ones who have the power, to ignore the ones who can make the nation better and causes the nations to get worse.

[Juse14]

What do you think about economists, who study the theories of economics and brag about being vast in the study of economics, yet doesn't help or contribute sufficiently to control or stop world economic meltdown?  

Sometimes the theories and views of economists do not match what is happening in the field. They are drafters, not implementers.
Those who can change the economy are those who are directly involved in the economy who do not only rely on theory but they also rely on the experience they have gained in dealing with economic problems. Those who have been involved in economics for a long time and have sufficient experience tend to work tactically and sometimes don't care about theory.

Yes, I know that people who have tactical behavior are able to solve every problem directly in the field without requiring long, complex planning and discussions to make decisions to solve problems. But again, this depends on the problem, sometimes to solve a problem you need a theory to solve it and this needs to be formulated and considered carefully.

You need to know that when someone is involved in the world of economics and has a lot of experience, they work tactically, but in their brain they already have a formulated road map to take and that is the theory they got from their experience.

What OP said about the discussion on how to stop the world economic crisis, I think it is very heavy and quite broad in scope, because talking about economics, there are many connections, such as currency, politics, policy, trade, cooperation, and many more that can influence economic crisis, so naturally they (the experts OP mentioned) don't say much.

Thank you for your opinion, and after I saw your post, I immediately remembered someone who once said to me that "Theory without practice is a lie & Practice without theory is arrogant."
And indeed, when talking about economics, many people put forward a theory to solve existing economic problems, but they themselves never put into practice the theory they put forward.

Theory is a guide for those who enter the world of business, with theory being a guide so that we have clear ways and goals in doing business.

Theory is often at odds with practice, it's true. But without theory, it is difficult to achieve much ecocnomic success. Understanding of economic cycles and interrelationships helps to conduct more complete analysis and make more accurate forecasts of the development of the situation

Don't think too much because the journey and time are very short. So when you understand a theory well enough, what you have to continue is to put it into practice. It cannot be denied that what is in theory is sometimes different from what happens in the field. However, to find out whether this theory is effective or not, we have to try it.

[famososMuertos]

Do not confuse economic science with astrology, like who thinks that astrology and astronomy are the same or that both are science.

Economic sciences are part of theoretical studies that require putting into practice. But they depend on human and natural variables, both within their probability influence.

Catastrophes, pandemics, etc.  And the unpredictable human factor in their behavior makes any economic benefit based on theory an unpredictable result that cannot only be presumed to work because it has a background based on economic sciences.

[topbitcoin]

What do you think about economists, who study the theories of economics and brag about being vast in the study of economics, yet doesn't help or contribute sufficiently to control or stop world economic meltdown?  

The best theory is the theory that is practiced and implemented. If it was just a theory, anyone could make it, but what is difficult is implementing what is in theory into real life to overcome existing economic problems. In my opinion, economists make quite a big contribution in overcoming economic problems and in increasing economic progress. It's just that the implementation of theory is not optimal and there are other inhibiting factors because sometimes what is in theory is different from what happens in the field. So this is where, besides having to understand existing theory, we also have to learn to work tactically to face problems that are beyond our previous expectations.

[tjtonmoy]

With each passing of time, there is really innovation in all countries, where the old way is no longer used because the civilization that exists in each country has been upgraded. That's why we are living in modern times now that we have modern technology.

Today, the beauty of the economy of each country depends on whether the good economists who give advice to their leaders in each country will follow it. If they do, there will surely be a good result or growth in the country, but if a leader does not follow the good advice of an economist, the country will for sure have a crisis. That becomes the role of an economist in a country.

Powerful and rich people are laundering money and we just watch and are unable to do anything. Do you think that the government does not know about this? Of course, they know. Because they are the ones helping them in the first place. Millions and millions of currency are getting laundered and all we hear about is news.

What I am trying to say is, that even if the economists are doing their best to provide the best solution, the system itself is corrupted. No matter what it is and how good it could affect the economy or in times of crisis, how it could solve the problem, the system won't allow for that to happen. All they care about is personal gains. The rich will get richer while the poor will stay poor and face the hard times. I know I am getting political here, but that's the truth here.

[davis196]

The economists don't run the world. The politicians are the ones making the important decisions. Some politicians have good economic advisors while others have bad advisors or simply don't listen to any advise coming from experts.
There was a saying. "If you gather 20 economists in one room, you will get 21 different opinions." The global economy didn't change that much in the last 100 years, that's why the economic theory stays pretty much the same.
The example you are giving with Citigroup and Latin America has little to do with the economic theory. This example is more suitable to the financial theory, rather than the economical theory. A bank, which is managed by greedy people loaned money to a bunch of corrupted populist Latin American governments. The outcome was pretty much expected.

[kryptqnick]

This is an amazing question, the question of how much of a science economics really is. There are certain guidelines and principles that help determine what is and what isn't scientific knowledge. You might think it's enough for explanations to be confirmed by observations/experiments, but that's actually wrong. As Karl Popper pointed out, what actually matters is falsification, namely the ability to disprove an explanation/theory. If it's possible to set out criteria to disprove something, and it stands the test, that's scientific knowledge. That's why when testing new drugs, for example, there are control groups taking placebo to see whether the effect is truly measurable.
Now, lots of our natural scientific knowledge is like that, based on facts and falsifiable. There's also sociology which is at least partially like that, as we can see that political polls tend to be very successful in determining election outcomes (and if they didn't, we'd see that it's not scientific).
But now, let's take Economics. A lot of it is theories, theories that help understand financial behaviour, but often not something specific enough to be falsifiable. Major economists can also often disagree completely about some things, which doesn't add science points to it. I don't know Economics well enough to state that it has no strict scientific knowledge, of course, but at least a significant part of it is not science.

[BitDane]

With each passing of time, there is really innovation in all countries, where the old way is no longer used because the civilization that exists in each country has been upgraded. That's why we are living in modern times now that we have modern technology.

Today, the beauty of the economy of each country depends on whether the good economists who give advice to their leaders in each country will follow it. If they do, there will surely be a good result or growth in the country, but if a leader does not follow the good advice of an economist, the country will for sure have a crisis. That becomes the role of an economist in a country.

Powerful and rich people are laundering money and we just watch and are unable to do anything. Do you think that the government does not know about this? Of course, they know. Because they are the ones helping them in the first place. Millions and millions of currency are getting laundered and all we hear about is news.

True that imagine a person who is in power have a percentage gain in every project he created.  This is one of the reason why a country overspend and underdeliver because of this kind of system.  If I am not mistaken the political leader of a community can have 25% of the amount of the project he wanted to implement.  This simply shows that the project has been overcharged by 25% even before it started.  Worst the scenario where the budget had been released but the project was never finished.

What I am trying to say is, that even if the economists are doing their best to provide the best solution, the system itself is corrupted. No matter what it is and how good it could affect the economy or in times of crisis, how it could solve the problem, the system won't allow for that to happen. All they care about is personal gains. The rich will get richer while the poor will stay poor and face the hard times. I know I am getting political here, but that's the truth here.

The example I stated above is one of the system that can be considered corrupt.  Imagine people are paying these government official for their job and these government officials aside from the regular payroll even have a 25% overcharge on their created projects and it would be lucky if the project realized but most of the government projects are unfinished. So how could an economist fix that?  Economist has no authority nor have power to sue these corrupt officials that is milking the stash of the country.

[South Park]

snip

What do you think about economists, who study the theories of economics and brag about being vast in the study of economics, yet doesn't help or contribute sufficiently to control or stop world economic meltdown?  

And what makes you think it is the job of economists to contribute to society? Lets look at the fiat system, even a kid would be able to understand that such a system will be too unstable and benefit only those at the top, and yet economists all over the world defend the system with all what they have and they think that anyone that criticizes it does not know what they are talking about, so in my opinion the evidence is very clear, economists exist to help those at the top to take advantage of everyone else, and when you think about them in this way then you can see they are doing a good job.

[KingsDen]

think of it, a high number of the ideas of the industry or fields are more than 100 years old. Then the economics formal theory and mathematical theory are now handicapped by impractical assumptions or directly contradicted by real world data.

What do you think about economists, who study the theories of economics and brag about being vast in the study of economics, yet doesn't help or contribute sufficiently to control or stop world economic meltdown?  

There is a very big difference between theoretical assumptions and practical reality. The world before now was ruled by elites who are scholars who based their everyday life from the results of their analysis gotten from ancient data and experiences and this information served as basis to solving problems that are related to human life and the economy of the world. This data did not fell them, but as the world grows, things become more dynamic and some of these data are being updated with the new world order.
This is the reason adaptation becomes  the solution. Everyone must be ready to change with the ever dynamic world and to solve their problems with the resources available to them.