I want to associate myself with Ryan Avent’s thoughts on the scientific status of economics and especially these remarks on how the nature of popular political punditry tends to create an exaggerated view of the scale of disagreement:
Why does it seem to laypeople as though economists can’t agree about anything? I can give you a few reasons. First, Paul Krugman isn’t going to write a column saying, “Here are the many, many things on which both I and my University of Chicago antagonists agree,” and the Journal isn’t going to get Gary Becker to write a column saying, “Indeed, on these many things we see eye-to-eye.” Second, the most riveting economic events are those, like global recessions, that occur infrequently, and about which there is far less certainty than other, more common events. Critics make hay of the fact that economists seem not to have come any closer on these issues in 80 years, but this amounts to no more than academics debating the meaning of the first lab test while they run the second. And third, the stakes of the policy debate are high, and so commentary is passionate and intense. It begins to seem as though economics is riven through by unbridgeable gulfs, and that these gulfs are as yawning now as they’ve ever been.
I think that’s all spot on. The fact that the economics profession can offer so little in the way of consensus guidance about dramatic, crucially important events like the panic of 2007-2008 is a huge problem and a very legitimate knock on the enterprise, but it doesn’t actually undermine the overall epistemic status of the discipline. The hope is that over time things improve. And, indeed, for all the horrors of the current recession it’s been managed much better than the Great Depression of the 1930s was. Progress is happening. The only way to make more rapid progress on the science of macroeconomic stabilization would be to have many more recessions so as to gather better data. Paul Krugman emphasizes that to understand the problems facing the American economy today you have to focus on the special economic properties of a large economy in an liquidity trap. But (fortunately), human history isn’t littered with examples of such a situation, so it’s challenging for him to compile a quantity of data sufficient to persuade all of his colleagues. That leaves people relying heavily on stylized models which are inherently open to contestation as to the validity of their underlying assumptions. That’s a huge problem for the world, but it doesn’t reflect some kind of malpractice by scholars.