Topic: Economics is not fulfilling its true potential as a science (Read 360 times)

We're blaming the "old thinkers" today, isn't that right? That makes sense. Yes, let's ignore millennia' worth of economic wisdom because, well, look at Bitcoin now. Yes, I understand that we shouldn't be stuck in the past, but we also shouldn't be blind followers ignoring the traditional. Balance is the key, though

CBDCs? Yeah, central banks are trying to get involved in the market, but it's important to remember that they are not inherited any crypto's philosophy. They are heavily controlled, centralized, and subject to the government. They’re the “safe” version of cryptos for those who fear too much freedom might be dangerous. And greed leading to economic crises? That's a story as old as time. It's not about the tool, be it fiat or digital currency, it's about human nature. Maybe that's what we need to "innovate"

I like your words a lot. This is the real truth and there's nothing that could deny this fact. This has been the case for so long and there's nothing stopping it. People will always try to find their own benefits and take advantage of every situation if they get a chance. As long as this exists, corruption will continue to exist along with it. And as the world is changing every day, there's no stopping it. It will just continue to grow more and more.

This is why we need to face every difficulty on our own. When you start to help yourself, in that process you also help others. This is the best way to make this easy. As long as everyone starts doing it, not only the country's economy but the global economy could be improved. Fix your personal economic situation first and that will help everyone. That's the idea and it's all about people following this path.

That's because leaders and people don't really listen to any of them, if we really did follow or heed their advice, there's a big chance that we're going to see a financial prosperity but no, their advices are being riddled with holes by big businesses and banks because in all of the advices given by the best economists out there, the big businesses and banks are the one that's going to be affected negatively and so they actively discredit economists when they talk about something big.

To be fair that has been the case for politics for over 2000+ years. Even during the "democratic" period of Rome, even though it wasn't as "democratic" as it is today, we still saw a ton of corruption and that was an issue. Corruption and politics go hand in hand and there seems to be no end to it at all.

We need to realize that it is not going to be too simple to get rid of it neither, there is absolutely no incentives about it neither. There are corrupted people who are beloved by their public as well, just because they are not the other side. Which is why we are not going to see economics will get any decent anytime soon, we are going to end up with a result that would be ending up with a lot of trouble that could make it worth a lot more.

We cannot blame economists for the global financial crisis.  Economists only present their opinions and do not implement them.  The whole system is responsible for the financial crisis of a country.  Here the failure of the government is the most.  Lack of government accountability.  I believe that the desire of the powerful to make their own pockets heavy is responsible for the economic collapse of a country.  The more responsible the government of a country is, and the more vocal it is about its duties, the better the country is.  On the other hand, the more dishonest the system of the country, the more the consequences of the country.  A dishonest system will eventually bankrupt a country.

You see, when there's an economic problem and you inquire about economists, everyone comes with their theories and opinions. They sit together and decide which is best ( it depends on your definition of best though), probably suppressing the solution that would have worked most.
 
Also, economists see situations and problems in terms of long-term and and short-term. There may be a solution at hand, but that solution has to last for years, probably decades before you see its results.

And lastly, Henry Ford once said, "If everyone understood how our monetary system works, our economic problems would be solved before tomorrow morning" ... But unfortunately, that's not the case. Economists bring their theories and possible solutions, but the people, the individuals in the country are the ones to actually carry out those solutions. Take inflation for example, it isn't caused by economists but they bring up policies to prevent, manage, or stop it. The effectiveness of those policies depends on the individuals. It depends on whether they save or spend, whether they invest or build up liabilities, whether the private business export or import... Etc.
So, I don't think all economists do is brag. They're probably working really hard, harder than you think to stabilize the world's economy.

In my view, economists have limitations in conveying what's valid and likely to work well in every piece of advice they offer. An economic crisis arising from unpaid debt is an unexpected event, clear evidence that economic failure in a country can occur at any time.

This issue extends beyond the realm of economists, where there's still a fair share of unpredictability in every prediction made. Relying solely on knowledge and logic isn't sufficient. It all requires a dash of luck to ensure things go according to plan.

Innovation doesn't have to be just about technology. But innovation must also exist in relation to economic science and economic practice. Likewise in economic philosophy. We should not rely too much on knowledge from the past. We have to make small improvements and adapt it to current world conditions. Adapted to human conditions and continuously developing technology. Examples are fiat and digital money such as Bitcoin. The people who don't want to accept bitcoin are those who are stuck with the old thinking about fiat. And it is difficult for them to accept new things that are actually present not to replace but to add to the rich diversity of payment instruments which can become alternatives that develop according to the times and technology.

But the step of creating a CBDC is also a good step, it's just that currently people prefer freedom and a decentralized system. The point is, if we want to develop economically, we have to think according to the times and we also have to think outside the box. Sometimes stepping outside of common thinking can bring big changes. As long as it is in accordance with the regulations of the country where we are located and in accordance with human values.

But regarding the economic crisis, I think it all started not from economic ideas. But all of this happened due to the greed of certain parties which weakened the economic balance and an economic crisis occurred.

It is true that Reed's frustration with economists and their inability to effectively prevent economic crisis is a sentiment shared by many but not all of them agree with his perspective. it is important to understand that every field of science has its limitations and challenges. One of the primary reasons economists often struggle to predict and prevent economic crisis is the complexities of economic systems.

As far as narrowing gap between rich and poor is concerned, in my opinion, the most effective approach nvolves education and skill development, which can be put into action by governments with the required political commitment.

I am from a 3rd world country so I know how it goes very well. Corruption everywhere. The thing you have mentioned about projects getting started and getting finished. That's because people involved in these projects are always forced by their co-workers or higher-level persons to make a budget where they can make an extra profit. One of my friends is in civil engineering. He told me that if the whole project needs 200 million, they will make a budget of 800 million. And the corruption is so much in there that the original budget which is 200 million will never get used fully. they will cut the percentage from that too. Making it a 100 million budget project with low-quality materials.
Where corruption happens this much, how can we imagine the government listening to some opinion from an economist? And if you go against it, you will be tagged in such a way that you will never be able to continue to work and other sectors or companies will never accept you for that tag.

Everyone keep coming with his own theory thinking that that's the best way to give an approach to the economy and this is one of the reasons you discover we keep having new theories each day and this is in other way making things gets more complicated because the way the scientific approach applies to human lifes is different from the economic approach, but each has to work along with each other to form a unified result towards the development of the economy in each of their research and have thesame take on their roles to tackle economical challenges.

There is a very big difference between theoretical assumptions and practical reality. The world before now was ruled by elites who are scholars who based their everyday life from the results of their analysis gotten from ancient data and experiences and this information served as basis to solving problems that are related to human life and the economy of the world. This data did not fell them, but as the world grows, things become more dynamic and some of these data are being updated with the new world order.
This is the reason adaptation becomes  the solution. Everyone must be ready to change with the ever dynamic world and to solve their problems with the resources available to them.

And what makes you think it is the job of economists to contribute to society? Lets look at the fiat system, even a kid would be able to understand that such a system will be too unstable and benefit only those at the top, and yet economists all over the world defend the system with all what they have and they think that anyone that criticizes it does not know what they are talking about, so in my opinion the evidence is very clear, economists exist to help those at the top to take advantage of everyone else, and when you think about them in this way then you can see they are doing a good job.

True that imagine a person who is in power have a percentage gain in every project he created.  This is one of the reason why a country overspend and underdeliver because of this kind of system.  If I am not mistaken the political leader of a community can have 25% of the amount of the project he wanted to implement.  This simply shows that the project has been overcharged by 25% even before it started.  Worst the scenario where the budget had been released but the project was never finished.


The example I stated above is one of the system that can be considered corrupt.  Imagine people are paying these government official for their job and these government officials aside from the regular payroll even have a 25% overcharge on their created projects and it would be lucky if the project realized but most of the government projects are unfinished. So how could an economist fix that?  Economist has no authority nor have power to sue these corrupt officials that is milking the stash of the country.

This is an amazing question, the question of how much of a science economics really is. There are certain guidelines and principles that help determine what is and what isn't scientific knowledge. You might think it's enough for explanations to be confirmed by observations/experiments, but that's actually wrong. As Karl Popper pointed out, what actually matters is falsification, namely the ability to disprove an explanation/theory. If it's possible to set out criteria to disprove something, and it stands the test, that's scientific knowledge. That's why when testing new drugs, for example, there are control groups taking placebo to see whether the effect is truly measurable.
Now, lots of our natural scientific knowledge is like that, based on facts and falsifiable. There's also sociology which is at least partially like that, as we can see that political polls tend to be very successful in determining election outcomes (and if they didn't, we'd see that it's not scientific).
But now, let's take Economics. A lot of it is theories, theories that help understand financial behaviour, but often not something specific enough to be falsifiable. Major economists can also often disagree completely about some things, which doesn't add science points to it. I don't know Economics well enough to state that it has no strict scientific knowledge, of course, but at least a significant part of it is not science.

The economists don't run the world. The politicians are the ones making the important decisions. Some politicians have good economic advisors while others have bad advisors or simply don't listen to any advise coming from experts.
There was a saying. "If you gather 20 economists in one room, you will get 21 different opinions." The global economy didn't change that much in the last 100 years, that's why the economic theory stays pretty much the same.
The example you are giving with Citigroup and Latin America has little to do with the economic theory. This example is more suitable to the financial theory, rather than the economical theory. A bank, which is managed by greedy people loaned money to a bunch of corrupted populist Latin American governments. The outcome was pretty much expected.

Powerful and rich people are laundering money and we just watch and are unable to do anything. Do you think that the government does not know about this? Of course, they know. Because they are the ones helping them in the first place. Millions and millions of currency are getting laundered and all we hear about is news.

What I am trying to say is, that even if the economists are doing their best to provide the best solution, the system itself is corrupted. No matter what it is and how good it could affect the economy or in times of crisis, how it could solve the problem, the system won't allow for that to happen. All they care about is personal gains. The rich will get richer while the poor will stay poor and face the hard times. I know I am getting political here, but that's the truth here.

The best theory is the theory that is practiced and implemented. If it was just a theory, anyone could make it, but what is difficult is implementing what is in theory into real life to overcome existing economic problems. In my opinion, economists make quite a big contribution in overcoming economic problems and in increasing economic progress. It's just that the implementation of theory is not optimal and there are other inhibiting factors because sometimes what is in theory is different from what happens in the field. So this is where, besides having to understand existing theory, we also have to learn to work tactically to face problems that are beyond our previous expectations.

Do not confuse economic science with astrology, like who thinks that astrology and astronomy are the same or that both are science.

Economic sciences are part of theoretical studies that require putting into practice. But they depend on human and natural variables, both within their probability influence.

Catastrophes, pandemics, etc.  And the unpredictable human factor in their behavior makes any economic benefit based on theory an unpredictable result that cannot only be presumed to work because it has a background based on economic sciences.

Thank you for your opinion, and after I saw your post, I immediately remembered someone who once said to me that "Theory without practice is a lie & Practice without theory is arrogant."
And indeed, when talking about economics, many people put forward a theory to solve existing economic problems, but they themselves never put into practice the theory they put forward.

Theory is a guide for those who enter the world of business, with theory being a guide so that we have clear ways and goals in doing business.

Don't think too much because the journey and time are very short. So when you understand a theory well enough, what you have to continue is to put it into practice. It cannot be denied that what is in theory is sometimes different from what happens in the field. However, to find out whether this theory is effective or not, we have to try it.