Around here I’ve frequently wondered about economics as a predictive science. I’m not alone. John Maynard Keynes, for example, once described the purpose of economic forecasting as to make astrology look good. That’s why I found this article, reproduced at naked capitalism, on the shortcomings of economic statistics very thought-provoking:
The Economist recently had a leader “Don’t Lie to Me Argentina” in which it accused Argentina of some kind of unforgivable treachery for politicising its economic statistics. As if economic statistics aren’t political in their very nature (a heavy bias towards capital and against labour, for instance).
So in contrast to H&H [a fellow MacroBusiness blogger], who enthuses that without economic data we are “naked, bereft of meaning” I wish to present a very different perspective. I wish to briefly examine what it would mean not to have economic statistics.
Here are some of the author’s suggestions about what that would mean:
- We would have to stop being lazy in the way we construct meaning and do the work of creating meaning ourselves.
- We would embrace a broader sense of meaning, one that did not involve just what can be measured.
There are three more bullet points and expansions on them. Read the whole thing.
I think those first two points should be thought of in an old MBA rule-of-thumb: if it can’t be measured, it can’t be managed. But it does make me wonder if, as was originally said about archaeology, economics is not a science, it’s a vendetta.