Are economists the new astrologers?
A controversial article has been circulating through the financial news for the past year or so that equates economists with astrologers because, its author argues, both are pseudosciences. Ironically, the argument given is that economists were not able to predict the 2008 economic crash:
The failure of the field to predict the 2008 crisis has … been well-documented. In 2003, for example, only five years before the Great Recession, the Nobel Laureate Robert E Lucas Jr told the American Economic Association that ‘macroeconomics […] has succeeded: its central problem of depression prevention has been solved’.
The irony is that astrologers DID predict the 2008 crisis, and were not surprised when it occurred. Unfortunately though, while astrology can reveal the general climate of what the future may bring, there is no way to predict specific events either in our personal lives or in a global economy. Since the 2008 crisis both economists AND astrologers have predicted a correction, or a crash – yet the global economic condition continues to expand.
I like this quote from Paul Krugman in the article cited above:
‘As I see it,’ he wrote, ‘the economics profession went astray because economists, as a group, mistook beauty, clad in impressive-looking mathematics, for truth.’ Krugman named economists’ ‘desire… to show off their mathematical prowess’ as the ‘central cause of the profession’s failure’.
Math is an abstraction, but can it be used to predict human behavior? I think astrologers often make the same mistake. We have these marvelous symbols, “beauty, clad in impressive-looking mathematics,” and now an abundance of ancient techniques to predict the future. And yes, a few times those techniques for prediction have succeeded – but so will flipping a coin 50% of the time.
When astrology […]