Epstein, "Down With The Living Wage"
A recent opinion piece in the New York Times by Alex Rosenberg and Tyler Curtain, both trained as philosophers of science, asks the intriguing question: “What is Economics Good For?” “Not much” is their largely skeptical answer. They argue that economics is a second-rate science, while the physical and biological sciences sport more impressive credentials. For all its use of fancy mathematics, they argue that “the trouble with economics is that it lacks the most important of science’s characteristics—a record of improvement in predictive range and accuracy.” Unfortunately, this increasingly fashionable view that economics is not a science too often leads people to endorse unwise regulatory policies.
Their column sparked a reply by the Harvard Nobel Prize–winning economist, Eric Maskin, who argued that even if economics fails the test of prediction, it offers explanations of phenomena just as the other sciences do. Maskin was chastised by a number of readers who denied, with good reason, any distinction between explanation and prediction. A theory that purports to explain something but predicts nothing is, intellectually, not very compelling.
So what, then, is economics good for?