The science of economics
Science has earned much respect in modern society. Scientific pursuits require maturity, open-mindedness, intelligence and hard work. And scientific findings hold regardless of the nationality, sex, religious beliefs and the political affiliation of those who uncover them.
Just glance into your kitchen. The microwave and refrigerator — and the electricity-distribution system that powers these appliances — would be impossible without modern science. Ditto for so many other features of our daily lives.
Yet we must be careful to keep science in perspective. A careless understanding of science promotes a very unscientific attitude.
Science, as we think of it today, covers only a partial range. The full range of science includes not only physics, chemistry, medicine and the other hard sciences but any and all searches for understanding that are systematic, unbiased and rooted in human curiosity that prizes reason and evidence above dogma and authority.
Economics, for example, is no science like physics, but it is indeed a science. Its practitioners seek with open minds and unobstructed intellectual give-and-take to better understand the operation of systems of human exchange — including, of course, the operation of commercial markets.
One of the scientific findings of economics — a finding as firm as any conclusion of the hard sciences — is that the mix of what should be produced and made available for consumption cannot possibly be determined by science. That determination, if it's to be remotely correct, can be made only by market competition in which everyone spends his or her own money.
The number and quality of sofas, MP3 players, automobiles, pairs of jeans, toasters, bulldozers — you name it — that is “correct” for the economy to produce is discovered only in an ongoing and unplanned market process. Suppliers spend their own resources in efforts to earn profits by producing goods and services that consumers willingly buy. Many of these efforts are competitive (for example, Amazon.com competing with Sears to sell retail goods) and many are cooperative (for example, Amazon.com using FedEx to deliver retail goods to consumers).
No genius or committee of scientists plans market outcomes. Importantly, no such genius or committee could possibly match, much less outperform, the unplanned competitive market at determining what should be produced.
To see why, ask yourself how many pairs of dress shoes are “right” for you to buy over the next two years. You might have in mind some rough number now, but you know that your precise answer depends on too many factors to account for today: Will your fashion sense change? Will you get a new job that requires you to dress up more (or less) than in your current job? Will you meet a new girlfriend or boyfriend who wants you to dress up more (or less) frequently than you do now? And importantly, what if the price of dress shoes skyrockets — or falls through the floor?
There is no scientifically correct answer to the question.
Making the matter even less scientific is the fact that each of us has different tastes in dress shoes. Whatever number of dress shoes you choose to buy over the next couple of years will be right for you but probably not right for me — and certainly not right for each of the other 310 million Americans.
If the above sounds obvious, it has surprising implications — as I'll show in my next column.
Donald J. Boudreaux is a professor of economics at George Mason University in Fairfax, Va. His column appears twice monthly.
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.
- Medicare payments to tie doctor, hospital payments to quality rather than volume of care
- Business roundup: IBM “flatly denies” report of mass layoffs; more
- Major storm skips past
- Buildings concern board
- Fayette man allegedly exposed self to Charleroi children
- Connellsville looks for ways to raise money, cut expenses
- North Belle Vernon man accused of stalking girl, 13
- Baseball lover shared lifelong passion by coaching
- East Allegheny girls getting used to winning with underclassmen
- Discord drives Monessen meeting
- Lower Burrell 5th-grader illustrates power of kindness with cancer charity