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The Farce That Is Economics: Richard Feynman On The Social Sciences ( Sinclair & Co., Oct 18, 2014):

Richard Feynman on the Social Sciences

What do real scientists have to say about sciences that are not so real?

Born in 1918, Richard Feynman was an American theoretical physicist known for his work in a variety of fields where he made an immeasurable contribution, including quantum mechanics, quantum electrodynamics and particle physics. He was also credited with introducing the concept of nanotechnology, a breakthrough that holds so much promise today.

A professor at the California Institute of Technology, Feynman helped popularize physics through lectures and books which he made more accessible to the general public. He received many honors for his work throughout his life. He was elected to the American Physical Society, the American Association for the Advancement of Science, the National Academy of Science and the Royal Society of London. He was recently ranked as one of the ten greatest physicists of all time.

Many insights he left us with go beyond the world of physics. And we would be wise to pay close attention to them.

A Critique of the Social Sciences

Looking back at his own experience, Feynman was keenly aware of how easy our experiments can deceive us and thus of the need to employ a rigorous scientific approach in order to find the truth. Because of this, he was highly critical of other sciences which did not adhere to the same principles.

The social sciences are a broad group of academic disciplines concerned with the study of the social life of human groups and individuals, including anthropology, geography, political science, psychology and several others. Here is what he had to say about them in a BBC interview in 1981:

“Because of the success of science, there is a kind of a pseudo-science. Social science is an example of a science which is not a science. They follow the forms. You gather data, you do so and so and so forth, but they don’t get any laws, they haven’t found out anything. They haven’t got anywhere – yet. Maybe someday they will, but it’s not very well developed.

“But what happens is, at an even more mundane level, we get experts on everything that sound like they are sort of scientific, expert. They are not scientists. They sit at a typewriter and they make up something like ‘a food grown with a fertilizer that’s organic is better for you than food grown with a fertilizer that is inorganic’. Maybe true, may not be true. But it hasn’t been demonstrated one way or the other. But they’ll sit there on the typewriter and make up all this stuff as if it’s science and then become experts on foods, organic foods and so on. There’s all kinds of myths and pseudo-science all over the place.

“Now, I might be quite wrong. Maybe they do know all these things. But I don’t think I’m wrong. See, I have the advantage of having found out how hard it is to get to really know something, how careful you have about checking your experiments, how easy it is to make mistakes and fool yourself. I know what it means to know something.

“And therefore, I see how they get their information. And I can’t believe that they know when they haven’t done the work necessary, they haven’t done the checks necessary, they haven’t done the care necessary. I have a great suspicion that they don’t know and that they are intimidating people by it. I think so. I don’t know the world very well but that’s what I think.”

To be fair, such disciplines seek to uncover and understand very complex relationships involving a volatile and even unpredictable human element. But the point that Feynman was making is that, rather than acknowledging this limitation, experts in these fields present their findings as truths, without employing the same rigor as in the physical sciences.

In the interview, Feynman singled out nutrition as an example, which has actually made progress in recent years as far as the scientific method is concerned (although everyone is still getting fat). There is, however, another social science whose “experts” have come to influence, directly or indirectly, generations of millions of people around the world. And this one fits perfectly with what he was describing.

The Dismal Science

“The dismal science” is a derogatory name for economics coined by Thomas Carlyle, the 19th century Scottish writer and philosopher. There is some debate as to why he thought of those words. But with the world coming off a huge recession in 2008 that very few economists foresaw, he could not have come up with a more prescient name.

Consider the following mainstream economic “truisms”, presented in broad layman terms, which have largely governed economic policy thinking in recent decades, particularly in the Western hemisphere:

  • Saving money is a sin and should be penalized; speculation is a virtue and should be encouraged
  • The government does not need to run its finances like every other company and individual in the country; what is good for the latter is bad for the former
  • Inflation should be kept at 2% forever; that’s the exactly right number, no more, no less; if you start paying less for your food, rent and healthcare, the central bank must intervene
  • Those who take personal risks to create prosperity and jobs have obligations; everyone else has rights
  • The state can spend its citizen’s money much more intelligently than they can
  • Business cycles are bad so we must always stimulate the economy
  • When a boom in demand pursuant to a boom in credit inevitably fades away, we should create another boom in credit to revive demand again, and again, and again
  • Creating debt at a rate above an economy’s incremental productive capacity generates wealth
  • Anyhow, debt does not matter because that liability is someone else’s asset
  • Demographics don’t matter either
  • You generate so much prosperity in your job over 40+ years that you can comfortably live in your retirement of 20+ years
  • Foreign lenders only need to be concerned with regard to banana republics; the others will always pay them back
  • The capital markets follow nicely shaped probability bell curves, and so shocks and crashes are extremely rare events; the markets are “efficient”
  • The benefits of free trade outweigh the costs of a country losing its manufacturing sector as a result; the fact that domestic companies have to comply with much stricter and costlier regulations than their foreign competitors is of no consequence
  • Human behavior is governed by mathematical equations and models, even when oversimplifying assumptions are used
  • The next generation will figure out a way to pay for all the massive debts that we are creating today; otherwise the central banks will solve the problem
  • The way to create prosperity in a society is to take away resources from the productive sector and distribute them amongst the unproductive sector
  • We all admire the free markets; we just can’t let them work

The list could go on. Needless to say, every “truism” here defies common sense, let alone any rigorous scientific analysis.

For instance, there is no empirical evidence to support the view that a debt crisis can only be solved by piling on more debt, a de facto policy being implemented today in the Eurozone periphery. This is certainly not a scientific argument. And you can’t argue with it either. If the policy fails it’s only because you did not pile on the debts fast enough. The expert is always right!

And so we go on, clinging to every word uttered by prominent mainstream economists and central bankers as if it were the absolute undisputable truth. Just as Feynman had suggested.

And he was certainly not alone in his criticism of the social sciences. Some economists had warned years earlier that their discipline was posing as a true science. Here’s a very insightful excerpt from the 1974 Economic Sciences Nobel prize acceptance speech by Friedrich von Hayek (appropriately called “The Pretence of Knowledge”):

“It seems to me that this failure of the economists to guide policy more successfully is closely connected with their propensity to imitate as closely as possible the procedures of the brilliantly successful physical sciences – an attempt which in our field may lead to outright error. It is an approach which has come to be described as the ‘scientistic’ attitude – an attitude which, as I defined it some thirty years ago, ‘is decidedly unscientific in the true sense of the word, since it involves a mechanical and uncritical application of habits of thought to fields different from those in which they have been formed.’”

Even Paul Krugman, a high priest of mainstream economics, is critical of his own kind. However, in his view the problem is that there are too many solutions on how to solve the world’s economic problems (instead, everyone should just follow his advice and we will all be saved!). That divergence of opinion is yet another indictment of the lack of scientific rigor and precision that permeates the economics profession today.

The Consequences

first economist

Widely accepted beliefs in myths masquerading as science have consequences. The cartoon above could not describe them any better (and it’s better to laugh indeed). Must individuals continually walk the plank as advocated by “experts” that supposedly hold all economic truth, or should we instead have a clear-headed debate as a society on how to get our economies back on track?

In January 1988, a month before his passing, Feynman warned us against becoming arrogant and complacent in our current stage of progress, which otherwise could have dire implications on future generations:

“We are at the very beginning of time for the human race. It is not unreasonable that we grapple with problems. But there are tens of thousands of years in the future. Our responsibility is to do what we can, learn what we can, improve the solutions and pass them on.

“It is our responsibility to leave the people of the future a free hand. In the impetuous youth of humanity, we can make grave errors that can stunt our growth for a long time. This we will do if we say we have the answers now, so young and ignorant as we are.

“If we suppress all discussion, all criticism, proclaiming ‘This is the answer, my friends; man is saved!’ we will doom humanity for a long time to the chains of authority, confined to the limits of our present imagination. It has been done so many times before.

“It is our responsibility as scientists, knowing the great progress which comes from a satisfactory philosophy of ignorance, the great progress which is the fruit of freedom of thought, to proclaim the value of this freedom; to teach how doubt is not to be feared but welcomed and discussed; and to demand this freedom as our duty to all coming generations.”

Right again Mr. Feynman. Now, will the real scientists please stand up?

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10 Responses to “The Farce That Is Economics: Richard Feynman On The Social Sciences”

  1. Marilyn Gjerdrum Says:

    Great article, he is spot on. The US is now at 100% debt to GDP. Every cent that comes in belongs to someone else. The UK has debt level of over 400% to GDP, France and Germany enjoy debt levels of over 200% to GDP. Ireland has over 1000% debt to GDP, terrifying to anyone with an ounce of sense.

    The entire western civilization is mired in debt. The stock market is worse, and national borrowing starts leveraging at 1000%:1. Now, they leverage the leveraged funds as well. There is NO WAY any of this can every be repaid.

    Only banana republics do stuff like this? I guess that is what we will all become.
    The idea of a world currency is insane, just look at the Euro. Bad debts from Greece, and other deadbeat countries, have made any resolution impossible.

    I wonder what he would say today. As a civilization, we are finished. Nothing is left but insane debt and fool wars that feed the few at the cost of everyone else. Our leaders don’t even profit from their endless wars, all the profits go to greedy gut corporations.

    I agree with Abe Lincoln, corporations are the most evil invention by man, and ought to be wiped out.

  2. Deniusz Kutyłowski Says:

    And what my dear Marilyn of Bob Cratchit’s non-corporate employer?

  3. Bart klein Ikink Says:

    Richard Feynman is right. Everyone can use a pocket calculator, but in economics you should not, otherwise you are not taken seriously. This applies to nearly all economic schools, whether it is Keynesianism or the Austrian School. The only way to have inflation free money is to have negative interest rates. But do you agree? Probably not. That is because you did not think through the consequences of compound interest. I will explain.

    The design of our monetary system is so stupid that it is hard to believe. The money we currently use is created by banks as a debt on which interest must be paid. This has far reaching implications. To explain this, I will simplify matters, and assume that there is a small self sufficient village that does not trade with other villages. This village only needs $ 1,000 to operate its entire economy. The local bank is happy to lend the $ 1,000 at a reasonable interest rate of 5%.

    What happens? After a year the $ 1,000 has to be returned, but also a petty $ 50 in interest must be paid. There is a slight difficulty, a fly in the ointment so to say. The required $ 1,050 simply is not there as there is only $ 1,000 to begin with. Then the bank comes up with a clever solution. The economy needs $ 1,000 to operate and the $ 50 is nonexistent money that cannot be repaid, so the bank offers to lend the villagers $ 1,050 at the same reasonable interest rate of 5%.

    It is now clear what will take place next. At the end of the next year the debt has grown to $ 1,102,50. This may not seem much but it cannot be repaid as there is only $ 1,000. After 10 years the debt has grown to $ 1,628,89. After 100 years it amounts to the considerable sum of $ 131,501,26. There is no way of repaying this debt as there is still only $ 1,000 in the economy. Long before that time, the debt level may already have become a cause of some worry, at least by people that can make proper use of a pocket calculator.

    If the villagers are quite dexterous with their pocket calculators and fear the consequences of compound interest, nobody in the village may be willing to borrow the extra $ 50 in the first year. Then there would be only $ 950 in the economy in the second year, while the debt remains $ 1000. After two years there would be just $ 900 in the economy as another $ 50 in interest had to be paid. Because there is less money available, the economy would deteriorate. After twenty years, there is no money left at all, only $ 1000 of debt. By then the economy would have completely collapsed.

    Of course reality is more complicated. Banks make expenses, the money that banks create can come from deposits, and debts do not have to be repaid in one year. Still, the underlying mechanism of interest on money does not change. We only need interest on money to exist to make debts continue to grow and to make it impossible to pay off those debts. Because of interest on money, we continuously need more debt to keep the economy from collapsing. This is why the people in charge of this system are trying to convince us to go deeper into debt to buy more stuff we do not need or cannot afford. This is why governments have to go into debt when nobody else is willing to do so.

    It is not easy to design a money without interest because interest is a natural phenomenon in the economy. But it could be done, if the value of the money unit is allowed to rise and prices are allowed to drop. To go into the details takes too much space, but if you are interested, you can read more here:

    http://www.naturalmoney.org/naturaleconomy.html

  4. Vess Says:

    I guess Mr. Feynman had never heard of the Austrian school of economics, which very much agrees with what he has said. Not surprising, really. I recently had a conversation with someone who had studied economics at the university and, amazingly, she had never heard of Ludwig von Mises.

  5. David Chu Says:

    There is another science (I skimmed thus long article) that belongs to this rubbish pile call “science”: Political Science!

    Although the United States of Death, Disease and Destruction has more or less perfected this art of geopolitical “persuasion” of democracy change. Take what’s happened to Ukraine as an example.

    The more clear cut case maybe Brazil. They (meaning the US) probably killed one of the previous presidential candidates (plane crashes are a CIA specialty) to get into place this Marina Silva (an “environmentalist” who is for GMO, a “socialist” who is pro-business), so that she could siphon off votes from the current President Rousseff where it takes 50% to win in the first round. Now we are in the second round of presidential voting this Sunday and the other US-candidate is running neck-n-neck with Rousseff. And he just might pull it off.

  6. Mld Says:

    Sounds like global warming is similar to economics.
    Both are irrational belief systems that can’t be questioned.
    You’re apostate to question the tenants.

  7. Hampton Burt Says:

    He fell into his own fallacy. The faults he attributes to social science are probably projection onto his subject the flaws he subconsciously knew was in his own work. In fact, social scientists do conduct valid experiments and they are rigorous in their criteria. He didn’t know this. In this area of his remarks he was ignorant. What this proves is not necessarily that he was wrong about everything but it certainly does show that he was not averse to making absolute statements on subjects about which he was ignorant. What matters is that this habit almost certainly extended to his career work and this means that his own work should be viewed with some skepticism, not necessarily with regard to observable results, but with regard to his explanations relating to their cause and effect.

  8. Mark Lewko Says:

    there is a very simple reason the social sciences are not ‘science’ and it is mentioned in passing in the article but needs a little elaboration. the ‘scientific method’ requires constants and variables. there are no constants in the social sciences, only variables. therefore, all the experiments can provide is historical data but no laws. mises pointed this out in his book, ‘human action’.

  9. Steve Says:

    We have a global monkey economy guided by economists.

    Once upon a time, in a place overrun with monkeys, a man appeared and announced to the villagers that he would buy monkeys for $10 each.

    The villagers, seeing that there were many monkeys around, went out to the forest, and started catching them.

    The man bought thousands at $10 and as supply started to diminish, they became harder to catch, so the villagers stopped their effort.

    The man then announced that he would now pay $20 for each one. This renewed the efforts of the villagers and they started catching monkeys again. But soon the supply diminished even further and they were ever harder to catch, so people started going back to their farms and forgot about monkey catching.

    The man increased his price to $25 each and the supply of monkeys became so sparse that it was an effort to even see a monkey, much less catch one.

    The man now announced that he would buy monkeys for $50! However, since he had to go to the city on some business, his assistant would now buy on his behalf.

    While the man was away the assistant told the villagers, “Look at all these monkeys in the big cage that the man has bought. I will sell them to you at $35 each and when the man returns from the city, you can sell them to him for $50 each.”

    The villagers rounded up all their savings and bought all the monkeys.

    They never saw the man nor his assistant again, and once again there were monkeys everywhere.

  10. Godsfriend Says:

    This article is very insightful, and amplicable to much more “Science” than economics. Freud came from a very evil world. He must have or he would not have described human motivation is such an evil light. When I first encountered his descriptions I found myself looking into a “Friday the 13th World”. I hated it and immediately decided not to spend a lot of time listening to such depressing nonsense. I had been raised in a world highly influenced by the teachings of Jesus. In that world happiness, joyfulness, loving kindness, and goodness were greatly encouraged. It was a much better place to be. Since then I have been involved in prison ministries where some of Freud’s nightmarish insight seems to hold some legitimacy, but it is still not where you want to spend your personal time nor be engulfed in its motivational corruptions. There are a lot of worlds amoung humans and you can and do sellect the one you live in. I certainly do not want the one I live in to be one of the nightmarish ones. I’m willing though to encourage those trapped in the nightmarish ones to move. There is a good, kind world available to those who dare to move.

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