Obviously, it is the Keynesian school that informs our public policy, not the Austrian school. Read all of Richards’ entertaining article here.
Austrian economists deny that economics is an empirical science, that is, one whose theories can only be known to be true by experimental verification. Economics is a science in the same sense that mathematics and logic are sciences. Its claims are based on logical deduction from indisputable axioms, and may be illustrated historically, but never verified or falsified experimentally. In the same way, we do not ask for experimental verification that a straight line is the shortest distance between two points on a two-dimensional plane.
The Austrian economists have not fallen victim to the invasion of logical positivism that has wrought so much havoc in our intellectual landscape. The logical positivists wished to eschew metaphysics, to escape transcendence, to leave behind forever the tyranny of an immaterial world of ideas. And so they devised a rigid criterion of knowledge: you cannot know anything you cannot empirically verify...
[If] the weatherman misses with his temperature forecast by five degrees, that’s one thing. If he misses the fact that a class-five hurricane the size of Texas is speeding directly for New York City — not only fails to predict it but explicitly denies its existence up until the moment it hits — I’d find another weatherman.
Austrian economists said a hurricane was coming. They didn’t know precisely when, but it was coming, and it was a big one. Keynesians denied its existence. Austrian economists don’t claim to be doing empirical science. Keynesians do. What is ironic to me as an empirical scientist, is that it is the Austrians who get their predictions right, while Keynesians seem to have been caught like deer in the headlights.
Thursday, March 12, 2009
Who Knows Science Better Than a Scientist?
Benjamin C. Richards is a Ph.D. candidate in physics, so he knows a little something about empirical science. His perspective on the field of economics is particularly insightful: