I've been reading The Nobel Factor: The Prize in Economics, Social Democracy, and the Market Turn by Avner Offer, Gabriel Söderberg, an interesting critique of the use of the Nobel Prize to undermine the Welfare State, essentially by conservative groups in Sweden, that were influential within the Central Bank (Riksbank), that disliked the Social Democratic policies in place in the 1960s.…My comment on section of the post on laws. Economists need lose the term "law." There are no "laws of economics," or any other social science, that are comparable the laws of nature discovered in the natural science, owing to the differences in subject matter. There are no "laws of history," and economics is historical — regardless of how much formalists would like to believe otherwise.
There may be regularities that observable in economics, but they do not rise to the level of universality that is characteristic of laws of nature. Economists should stop implying they they do. It is dishonest, and it is bringing considerable criticism down on the profession for apparent failures.
These failures appear because of the way economist approach their discipline. They set narrow scope conditions that are instead advertised as law-based. Then they they have to resort to "exogenous factors" when things go wrong. This is not doing science. It is either confused, or else ideological persuasion based on rhetoric rather than reasoning and evidence.
My advice is to declare your scope conditions and then don't give the impression that you are able to provide answers for anything beyond the scope of the modeling assumptions. Of course, this limits what economists can claim because restrictive assumptions narrow the scope of the model.
Those who like to pontificate about "laws" don't like that. Now they are on the receiving end of not only criticism but also derision because of the exaggerated expectations about prediction and certainty they cultured in their audience that imploded in the GFC, for instance, and their prescription afterward have shown that they don't know how to fix thing they were involved in breaking.
So when you hear "economic laws," think BS.
Economic Regularities and "Laws" and the Riksbank Prize too
Matias Vernengo | Associate Professor of Economics, Bucknell University