Introduction
This essay critically evaluates the assertion that economics is not a real science, drawing on philosophical frameworks and practical limitations inherent in the discipline. As a student of economics, I argue that while the field employs mathematical tools and systematic analysis, it falls short of the rigorous standards of scientific methodology defined by thinkers like Karl Popper and Imre Lakatos. The discussion focuses on three key areas: the inability to conduct controlled experiments, the lack of falsifiability in economic theories, and the field’s failure to predict future events reliably. Through these arguments, I aim to demonstrate that economics might be better understood as a complex study of human behaviour rather than a strict science.
The Challenge of Controlled Experiments in Economics
One fundamental hallmark of scientific inquiry is the ability to conduct controlled experiments to establish causality. In disciplines like physics, variables can be isolated to test specific hypotheses under controlled conditions. However, economics struggles with this principle due to the inherently unpredictable nature of human behaviour and external influences. For instance, adjusting interest rates might be intended to boost investment, but simultaneous political changes, market sentiment, or global events can obscure causal relationships. Economists often rely on the assumption of “ceteris paribus” (all other things being equal), which, as critics argue, oversimplifies reality by ignoring the messiness of real-world interactions (Hausman, 1992). Unlike sciences where variables can be physically constrained, economics lacks a literal or metaphorical “box” to lock away confounding factors, rendering claims of causality speculative at best.
Falsifiability and the Resistance to Theoretical Failure
Karl Popper’s criterion of falsifiability asserts that a theory is scientific only if it can be proven wrong through clear, testable predictions (Popper, 1963). Economics, however, often dodges this scrutiny by adapting theories post-failure rather than discarding them. The 2008 financial crisis serves as a striking example: despite the collapse contradicting the predictions of efficient market theory, economists labelled it an anomaly or “shock” rather than questioning the model itself. Instead of admitting theoretical shortcomings, the discipline frequently introduces ad-hoc adjustments to preserve existing frameworks (Quiggin, 2010). This tendency to “patch up” rather than refute aligns with Popper’s criticism of pseudo-science, where theories are protected from falsification, undermining the progressive nature of scientific discovery.
Predictive Failures and Degenerative Research
Imre Lakatos argued that a true science progresses by making bold predictions about the future, not by crafting elaborate post hoc explanations (Lakatos, 1978). Economics often excels at explaining past events with increasing sophistication but consistently fails to anticipate major crises, such as the 1987 market crash or the 2008 recession. Rather than acknowledging predictive failures as evidence of flawed theories, economists reframe these events with new terminology or adjustments, a behaviour Lakatos would deem “degenerating” rather than progressive. This pattern suggests that economics prioritizes self-preservation over rigorous scientific advancement, further distancing it from the standards of fields like astronomy or physics, where observation trumps theory, as seen in Einstein’s revision of Newtonian mechanics.
Conclusion
In conclusion, economics cannot be classified as a real science due to its inability to conduct controlled experiments, its resistance to falsifiability, and its consistent predictive failures. While it employs sophisticated mathematical models and deductive reasoning, these tools often construct an idealised version of reality that overlooks human unpredictability. Drawing on philosophical critiques from Popper and Lakatos, I argue that economics resembles a complex study of human drama rather than a science adhering to strict empirical standards. This perspective invites a broader implication: policymakers and academics should approach economic theories with caution, recognising their limitations and treating them as interpretative tools rather than definitive truths. Indeed, acknowledging these shortcomings may ultimately strengthen the discipline by fostering humility and a focus on real-world applicability.
References
- Hausman, D. M. (1992) The Inexact and Separate Science of Economics. Cambridge University Press.
- Lakatos, I. (1978) The Methodology of Scientific Research Programmes. Cambridge University Press.
- Popper, K. R. (1963) Conjectures and Refutations: The Growth of Scientific Knowledge. Routledge.
- Quiggin, J. (2010) Zombie Economics: How Dead Ideas Still Walk Among Us. Princeton University Press.
