How good are the social science disciplines – 2 economics

My second social science is economics. Sociology is not alone in having deficiencies. Economics is another discipline which cannot explain its own subject matter and leaves non-academic researchers to use the most effective methods. The deeper question I am addressing in these comparisons is why the social sciences today haven’t got their act together.

Economists do correlations. They are good at crunching data. They have now taken away what sociologists used to do in stratification. Economists like Raj Chetty publish on upward mobility in America today. But this is done utterly without theory; it is no help to people who need conceptual explanations. Correlations at the individual unit size cannot explain the big changes in society.

The big picture economists’ have is of macro economics. They discuss central bank and government policies and look for measures of how the economy is doing. This is lively and interesting stuff. (See Krugman’s recent https://www.nytimes.com/2018/05/20/opinion/monopsony-rigidity-and-the-wage-puzzle-wonkish.html ). But this whole area exists without such theory as micro economics provides and is conducted without any pretense to explain big questions of social change. This is not a new deficiency; economists have never been able to explain how economic growth happens. How the first Industrial Revolution happened remains a mystery despite the efforts of economic historians (See McCloskey). Today’s courses in micro and macro economics won’t tell you how the economies of today grow or fail to do so. One thing economists don’t seem able to do is explain their own subject.

In the meantime, people whose job requires them to study the economy look at ‘industries.’ Researchers in finance and business divide the economy into different sectors, knowing that industries operate under different conditions. Academic economics won’t let economists do this;  theoretically, its all one market and one economy. No theory exists of what an industry is or why industries should exist at all. To my mind, industries are probably created by sociological and demographic factors … and disciplines don’t like explanations from outside their own field!

So it turns out that sociologists don’t have to be envious of economists; they can’t answer the important questions in their field either.