This is a thoughtful piece today by Robert Shiller on the question about economics as a science. I think he cuts right to the heart of the matter:
“One problem with economics is that it is necessarily focused on policy, rather than discovery of fundamentals. Nobody really cares much about economic data except as a guide to policy: economic phenomena do not have the same intrinsic fascination for us as the internal resonances of the atom or the functioning of the vesicles and other organelles of a living cell. We judge economics by what it can produce. As such, economics is rather more like engineering than physics, more practical than spiritual.
The problem is that once we focus on economic policy, much that is not science comes into play. Politics becomes involved, and political posturing is amply rewarded by public attention. The Nobel prize is designed to reward those who do not play tricks for attention, and who, in their sincere pursuit of the truth, might otherwise be slighted.”
I’ve done a lot of whining in the past about my belief that most of economics is just a policy debate masquerading as a scientific debate (see here). In fact, the reason I formed Monetary Realism was precisely because I got so tired of all the policy stuff. Economics can more closely relate to science. But that requires that we focus more on operational reailties and stylized fact and let our political biases take a back seat. Unfortunately, with money being such an emotionally charged issue, that’s extremely uncommon and not likely to change any time soon.