Economics — the ‘ten million cool theories’ problem

22 March, 2016 at 19:15 | Posted in Economics | 1 Comment

By Noah Smith’s own account, the field of economics is experiencing an empirical revolution. Unlike the past, it has become necessary to test theories against reality. That places the field of economics many decades behind the field of evolution and numerous fields in the human social sciences that have been rigorously evidence-based all along. Earth to the economics profession: Welcome to Science 101!

1349490-View-at-delicious-platters-standing-together-on-smorgasbord-Stock-PhotoBut there is more to Science 101 than the need to test theories. Let’s imagine that there were ten million cool theories out there. How long would it take to test them? Hundreds of millions of years. Does it really need explaining that the choice of the theory to test is important? Does Smith really believe that any old idea that comes into the head of an economist is equally worthy of attention?

The main reason that the so-called orthodox school of economics achieved its dominance is because it seemed to offer a grand unifying theoretical framework. Too bad that its assumptions were absurd and little effort was made to test its empirical predictions. Its failure does not change the fact that some unifying theoretical framework is required to prevent the “ten million cool theories” problem.

David Sloan Wilson

For my own  view — rather similar to Wilson’s — on the ‘ten million cool theories’ problem, see here.

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  1. OC, the “ten million cool theories” are not independent. They share a number of hypotheses among themselves. You don’t test each theory itself, but the constituent hypotheses. In the best case scenario you can decide among ten million theories with a couple of dozen tests. That is optimistic, OC, but the “hundreds of millions of years” estimate is ridiculous.


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