What is Economics?

I've been following recent disputes among academic economists in the blogosphere. Very interesting.

I think macroeconomist Brad DeLong has put his finger on one of the essential differences in approach that feeds economic disputes, as well as political disputes.

Commenting on a presentation by Robert Lucas, Jr., a noted economist of the Chicago School, who cites taxes, unions, financial regulation and the expanding welfare state as causes of the persistent depression, DeLong has this to say:

"[A]s Gavyn Davies [another economist blogger] drily notes, Lucas "seems to have ruled...out [alternate explanations] by a priori conviction, rather than any detailed empirical work."... Lucas seems to be discarding the very idea that economics, like the natural sciences, should be based on the evidence. He appears to believe that the state of the world can be ascertained by deductive logic, without ever looking out the window. That's fine, I suppose, if you believe that economics is a branch of philosophy rather than a branch of science. But it does not seem to be an approach that is likely to enable many practical improvements in the lives of human beings."

Reminds me a bit of the Queen of Hearts in Alice in Wonderland: "Sentence first - verdict afterwards." And perhaps then a bit of evidence, if ever we get around to it.

But I'm afraid too many in Congress treat economics as a branch of philosophy rather than science.