Every October, the award of the ‘Nobel Prize in Economics’ revives the age-old dispute over the scientific standing of the discipline: it is not a science, it uses too much mathematics, it cannot predict crises, and its prize is not even a real Nobel. These criticisms are made in good faith, but they miss the target. And a far more radical critique is possible.
The debate is becoming increasingly polarised. On one side stands the majority of economists, who liken economics to a natural science, adopt mathematical language as the criterion of scientific status, and justify recent forecasting failures by invoking the stochastic nature of crises. On the other side are those who deny economics any scientific standing whatsoever, condemn the use of mathematics tout court, and brandish those same forecasting failures as irrefutable proof that it is not a science. Neither position is, on closer inspection, entirely persuasive. It is the second, however, that deserves attention: it springs from the understandable need to subject dominant economic thought and its strongholds to criticism, yet its three most popular arguments do not hold.
The first is that of the ‘fake Nobel’. It is true: the so-called ‘Nobel Prize in Economics’ was not among the awards established by Alfred Nobel in his will of 1895. It was created only in 1968 by the Swedish central bank and bears the name ‘Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel’. This spurious origin is sometimes invoked to show that economics has unduly arrogated to itself a licence of scientific respectability. This is, in my view, a well-meaning but fallacious criticism. The prestige of a prize depends not so much on who confers it as on who receives it. What ought to be critically discussed, therefore, is which lines of research the prize has consecrated and which it has ignored. The prize should, in short, be criticised for the choices made by those who award it, not for its genealogy. After all, Nobel’s will also rewards literature and peace, which are not sciences, and ignores mathematics, for reasons that, legend has it, were more sentimental than epistemological. It was never a list of the scientific disciplines.
The second argument is that of forecasting failures. It is a rather weak position. The impossibility of making accurate quantitative predictions is a limitation that economics shares with many disciplines whose scientific status nobody disputes. Seismology cannot say when the next earthquake will strike, meteorology cannot see beyond a couple of weeks, epidemiology struggles to anticipate the spread of a virus, and evolutionary biology explains the origin of species without being able to say which ones will appear. This limitation stems not so much from dealing with thinking agents rather than atoms or air masses as from studying a complex system, made up of many interacting components, feedbacks, non-linearities, and dependence on initial conditions and on the path taken. The dominant theory can be faulted not for having missed the date of recent crises, but for having adopted models in which a general crisis can only come from outside, as a technology or policy shock, and never from the workings of the system itself. It is on this ground that the appeal to the stochastic nature of crises should be challenged.
The third argument is that of ‘too much mathematics’, which is, in turn, a false problem. Admittedly, mathematical formalisation is not, in itself, a guarantee of scientific status: Darwin’s theory of evolution is a model of scientific rigour although it was formulated, at least originally, without any mathematical apparatus, whereas astrology resorts to calculations, some of them elaborate, without thereby being a science. But neither is the renunciation of mathematics a guarantee of scientific status. Every language has its limits, because it determines what can be said and what cannot: this holds for mathematics as it does for the English language, or for any other form of expression. Awareness of these limits should, if anything, lead to a sparing and judicious use of mathematical and statistical tools, not to their hasty dismissal.
Besides, scientific status pertains first and foremost to the method of inquiry, not to the language adopted, still less to the object under investigation. It is not the topics addressed that are, in themselves, scientific or otherwise, but the way in which they are approached: the rigour and transparency of procedures, the intersubjective testing of hypotheses, and the willingness to revise them in the light of empirical evidence.
What should be subjected to radical critique is not, therefore, the use of formal tools as such, but the pre-analytic vision from which mainstream modelling derives, that is, the idea of society that precedes and guides the analysis: the image of an ordered, ahistorical, asocial and conflict-free cosmos, which is ultimately the self-representation of the hegemonic social classes. The point, in other words, is not to reject mathematics, but the conception of society and the theoretical assumptions on the basis of which it is often employed.
An example may help to clarify the point. Establishing whether an unemployment rate of eight per cent is a social problem or, instead, a ‘natural’ magnitude is not merely a technical matter. The two readings refer back to opposing world views and theoretical systems and, behind them, to distinct social interests.
It goes without saying that disagreement exists in the ‘hard’ sciences too: it is well known that Albert Einstein, though one of the founders of quantum theory, rejected its completeness. Such disagreement, however, tends in the long run to be reabsorbed, or at least adjudicated, by empirical evidence. In the social sciences, where evidence matters but is rarely decisive, something different happens. This is because an economic theory is not only a cognitive tool, but also a form of self-understanding and self-representation of a social subject. Since social subjects are heterogeneous (classes, groups, nations) and their relations are often conflictual, the discipline does not harbour merely episodic disagreement, but fully fledged schools of thought, each bearing a distinct vision of how society is and, above all, of how it ought to be.
Nor, indeed, is there a single definition of ‘scientific status’: ultimately, it is always debate within the scientific community that establishes, historically and provisionally, what is recognised as scientific. And since that community is not a neutral subject, but is traversed by the tensions of the society that hosts it, in the social disciplines establishing what counts as science inevitably carries greater social and political weight than in the natural sciences.
Seen in this light, economic thought can be interpreted as the coexistence and competition of several paradigms (classical, neoclassical, Keynesian, Sraffian, Marxist, institutionalist, evolutionary, and so on), gradually brought, from the 1970s onwards, under the hegemony of an orthodoxy of neoclassical derivation, with well-known consequences for the selection of research and of academic careers. The charge often levelled at economists, that they all, without distinction, act as theologians of the dominant interests, thus also ends up accepting the perimeter drawn by mainstream economists, who, with few exceptions, deny the existence of schools and currents of thought, since there are supposedly only wrong theories and right ones (their own, naturally).
Let there be no doubt: economics not only may, but must be subjected to rigorous criticism. The problem is that misdirected criticisms do damage. The most widespread ones hand neoclassical orthodoxy a monopoly on rigour and mathematics and shift attention from hypotheses and models to symbols. Above all, if economics is not a science, full stop, everything becomes opinion, and among opinions the one that prevails belongs to whoever holds the most power. On the terrain of method, by contrast, the dominant hypotheses and models can be challenged on the basis of shared criteria, including by seeking alliances with scholars from other disciplines.
That is why, despite the best intentions of its proponents, denying economics any scientific character ends up strengthening the dominant view. Those who deny economics any claim to scientific status and those who liken it to a natural science start, after all, from the same premise: that the only possible scientific status is that of a natural science. It would be better, instead, to recognise that economics is a social science, that is, a body of theories and methods called upon to investigate critically the historically changing laws of motion of capitalist societies, shunning both the conceited claims to neutrality of dominant thought and the irrationalist shortcuts of its more naive critics.
(For those interested in exploring these themes further, I refer to the notes for my course in Economic Analysis, which are in Italian: https://github.com/marcoverpas/analisi_economica)