The Farce That Is Economics: Richard Feynman On The Social Sciences

Submitted by Erico Tavares of Sinclair & Co.

Richard Feynman on the Social Sciences

What do real scientists have to say about sciences that are not so real?

Born in 1918, Richard Feynman was an American theoretical physicist known for his work in a variety of fields where he made an immeasurable contribution, including quantum mechanics, quantum electrodynamics and particle physics. He was also credited with introducing the concept of nanotechnology, a breakthrough that holds so much promise today.

A professor at the California Institute of Technology, Feynman helped popularize physics through lectures and books which he made more accessible to the general public. He received many honors for his work throughout his life. He was elected to the American Physical Society, the American Association for the Advancement of Science, the National Academy of Science and the Royal Society of London. He was recently ranked as one of the ten greatest physicists of all time.

Many insights he left us with go beyond the world of physics. And we would be wise to pay close attention to them.

A Critique of the Social Sciences

Looking back at his own experience, Feynman was keenly aware of how easy our experiments can deceive us and thus of the need to employ a rigorous scientific approach in order to find the truth. Because of this, he was highly critical of other sciences which did not adhere to the same principles.

The social sciences are a broad group of academic disciplines concerned with the study of the social life of human groups and individuals, including anthropology, geography, political science, psychology and several others. Here is what he had to say about them in a BBC interview in 1981:

“Because of the success of science, there is a kind of a pseudo-science. Social science is an example of a science which is not a science. They follow the forms. You gather data, you do so and so and so forth, but they don’t get any laws, they haven’t found out anything. They haven’t got anywhere – yet. Maybe someday they will, but it’s not very well developed.

“But what happens is, at an even more mundane level, we get experts on everything that sound like they are sort of scientific, expert. They are not scientists. They sit at a typewriter and they make up something like ‘a food grown with a fertilizer that’s organic is better for you than food grown with a fertilizer that is inorganic’. Maybe true, may not be true. But it hasn’t been demonstrated one way or the other. But they’ll sit there on the typewriter and make up all this stuff as if it’s science and then become experts on foods, organic foods and so on. There’s all kinds of myths and pseudo-science all over the place.

“Now, I might be quite wrong. Maybe they do know all these things. But I don’t think I’m wrong. See, I have the advantage of having found out how hard it is to get to really know something, how careful you have about checking your experiments, how easy it is to make mistakes and fool yourself. I know what it means to know something.

“And therefore, I see how they get their information. And I can’t believe that they know when they haven’t done the work necessary, they haven’t done the checks necessary, they haven’t done the care necessary. I have a great suspicion that they don’t know and that they are intimidating people by it. I think so. I don’t know the world very well but that’s what I think.”

To be fair, such disciplines seek to uncover and understand very complex relationships involving a volatile and even unpredictable human element. But the point that Feynman was making is that, rather than acknowledging this limitation, experts in these fields present their findings as truths, without employing the same rigor as in the physical sciences.

In the interview, Feynman singled out nutrition as an example, which has actually made progress in recent years as far as the scientific method is concerned (although everyone is still getting fat). There is, however, another social science whose “experts” have come to influence, directly or indirectly, generations of millions of people around the world. And this one fits perfectly with what he was describing.

The Dismal Science

"The dismal science" is a derogatory name for economics coined by Thomas Carlyle, the 19th century Scottish writer and philosopher. There is some debate as to why he thought of those words. But with the world coming off a huge recession in 2008 that very few economists foresaw, he could not have come up with a more prescient name.

Consider the following mainstream economic "truisms", presented in broad layman terms, which have largely governed economic policy thinking in recent decades, particularly in the Western hemisphere:

  • Saving money is a sin and should be penalized; speculation is a virtue and should be encouraged
  • The government does not need to run its finances like every other company and individual in the country; what is good for the latter is bad for the former
  • Inflation should be kept at 2% forever; that’s the exactly right number, no more, no less; if you start paying less for your food, rent and healthcare, the central bank must intervene
  • Those who take personal risks to create prosperity and jobs have obligations; everyone else has rights
  • The state can spend its citizen’s money much more intelligently than they can
  • Business cycles are bad so we must always stimulate the economy
  • When a boom in demand pursuant to a boom in credit inevitably fades away, we should create another boom in credit to revive demand again, and again, and again
  • Creating debt at a rate above an economy’s incremental productive capacity generates wealth
  • Anyhow, debt does not matter because that liability is someone else’s asset
  • Demographics don’t matter either
  • You generate so much prosperity in your job over 40+ years that you can comfortably live in your retirement of 20+ years
  • Foreign lenders only need to be concerned with regard to banana republics; the others will always pay them back
  • The capital markets follow nicely shaped probability bell curves, and so shocks and crashes are extremely rare events; the markets are “efficient”
  • The benefits of free trade outweigh the costs of a country losing its manufacturing sector as a result; the fact that domestic companies have to comply with much stricter and costlier regulations than their foreign competitors is of no consequence
  • Human behavior is governed by mathematical equations and models, even when oversimplifying assumptions are used
  • The next generation will figure out a way to pay for all the massive debts that we are creating today; otherwise the central banks will solve the problem
  • The way to create prosperity in a society is to take away resources from the productive sector and distribute them amongst the unproductive sector
  • We all admire the free markets; we just can’t let them work

The list could go on. Needless to say, every “truism” here defies common sense, let alone any rigorous scientific analysis.

For instance, there is no empirical evidence to support the view that a debt crisis can only be solved by piling on more debt, a de facto policy being implemented today in the Eurozone periphery. This is certainly not a scientific argument. And you can’t argue with it either. If the policy fails it’s only because you did not pile on the debts fast enough. The expert is always right!

And so we go on, clinging to every word uttered by prominent mainstream economists and central bankers as if it were the absolute undisputable truth. Just as Feynman had suggested.

And he was certainly not alone in his criticism of the social sciences. Some economists had warned years earlier that their discipline was posing as a true science. Here’s a very insightful excerpt from the 1974 Economic Sciences Nobel prize acceptance speech by Friedrich von Hayek (appropriately called “The Pretence of Knowledge”):

“It seems to me that this failure of the economists to guide policy more successfully is closely connected with their propensity to imitate as closely as possible the procedures of the brilliantly successful physical sciences - an attempt which in our field may lead to outright error. It is an approach which has come to be described as the ‘scientistic’ attitude - an attitude which, as I defined it some thirty years ago, ‘is decidedly unscientific in the true sense of the word, since it involves a mechanical and uncritical application of habits of thought to fields different from those in which they have been formed.’"

Even Paul Krugman, a high priest of mainstream economics, is critical of his own kind. However, in his view the problem is that there are too many solutions on how to solve the world’s economic problems (instead, everyone should just follow his advice and we will all be saved!). That divergence of opinion is yet another indictment of the lack of scientific rigor and precision that permeates the economics profession today.

The Consequences

Widely accepted beliefs in myths masquerading as science have consequences. The cartoon above could not describe them any better (and it’s better to laugh indeed). Must individuals continually walk the plank as advocated by “experts” that supposedly hold all economic truth, or should we instead have a clear-headed debate as a society on how to get our economies back on track?

In January 1988, a month before his passing, Feynman warned us against becoming arrogant and complacent in our current stage of progress, which otherwise could have dire implications on future generations:

“We are at the very beginning of time for the human race. It is not unreasonable that we grapple with problems. But there are tens of thousands of years in the future. Our responsibility is to do what we can, learn what we can, improve the solutions and pass them on.

“It is our responsibility to leave the people of the future a free hand. In the impetuous youth of humanity, we can make grave errors that can stunt our growth for a long time. This we will do if we say we have the answers now, so young and ignorant as we are.

“If we suppress all discussion, all criticism, proclaiming ‘This is the answer, my friends; man is saved!’ we will doom humanity for a long time to the chains of authority, confined to the limits of our present imagination. It has been done so many times before.

“It is our responsibility as scientists, knowing the great progress which comes from a satisfactory philosophy of ignorance, the great progress which is the fruit of freedom of thought, to proclaim the value of this freedom; to teach how doubt is not to be feared but welcomed and discussed; and to demand this freedom as our duty to all coming generations.”

Right again Mr. Feynman. Now, will the real scientists please stand up?