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Alchemy Revisited

I can’t often say that “I was there before Donald Boudreaux,” but in this case, I win by a few months.  In his recent Pittsburgh Tribune column entitled “Economics’ Limits,” the estimable Boudreaux uses a metaphor I posted in July.  Here are some excerpts of his column:

Economics is a science — if “science” means a systematic, rational, open-minded and evidence-based search for understanding. Economics is not a science if “science” means a discipline that can make nuanced and specific predictions about the future.

 …

Economists plug these data into computer-based mathematical models filled with “C’s” and “I’s” and “k’s” and other symbols from alphabets both Latin and Greek. These models then spit out precise predictions.

Voila! exclaims the economist slathered in hubris. “See my multivariable model and my precise-to-several-decimal places predictions! I’m a scientist!”

In fact, he’s an alchemist. He is misled — by the intricacy of the equations on his computer screen and by the apparent concreteness of the data that he shoves into those equations — into thinking that he’s doing science. He is misled into thinking that these leaden, aggregated data from the past can be transformed into golden truths about the future.

Not that I think I did a better or more complete job than Boudreaux (far from it, clearly).  I just like to pat myself on the back once in a while.

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