40 – Economics is a Science. Really!


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Little Dog: “Big Dog, do you think economics is a real science?” 

Big Dog: “Well, it all depends on what you mean by science, Little Dog. To my mind, pure science is descriptive. When I think of economics, I think of it as prescriptive. 

Little Dog: “Woof. I have no idea what you’re talking about.” 

Big Dog: “Pure science precisely describes the way the world works. Economics practitioners describe the way they think the world should work, as opposed to describing how it really works.”

Little Dog: “I dunno. Not sure that’s accurate. There’s a daunting amount of mathematics in the field of economics. Pretty impressive stuff.”

Big Dog. “Maybe. But does anybody use the theory of gravity to persuade someone to behave one way or the other? Gravity is gravity. It applies regardless of canine behavior. And most importantly, canine behavior can’t modify its basic principles. The force of gravity is proportional to the masses of each body and the square of the distance between them. End of story. No hedonic quality adjustments needed.”

Little Dog: “Hedonic quality adjustments? What the heck is that?

Big Dog: “Look it up on the Dognet. It’s one of many ways that economists bend data to suit their needs.” 

Little Dog: “How does it work?” 

Big Dog: “Have you noticed the price of dog bowls lately?” 

Little Dog: “Noticed! Are you kidding? They’ve doubled! Outrageous!” 

Big Dog: “Not according to the economists. The price has only gone up 10%”. 

Little Dog: “How is that possible?” 

Big Dog: “Well, the new dog bowls have non-slip pads on the bottom. Keeps the bowl in one spot while you’re eating.” 

Little Dog: “That is a nice feature. My old bowl always slides around the kitchen floor while I’m trying to grab my chow. Very annoying.” 

Big Dog: “Well, according to the economists, those non-slip pads are very valuable. The new dog bowls are a lot better quality than the old ones. This added benefit makes it impossible to compare the new, better quality dog bowls to the old bowls. So, the economists lower the ‘effective’ price of the new dog bowl by claiming that, if you take into account the quality improvements, the new bowl is only 10% more expensive.” 

Little Dog: “I dunno. Seems a bit fishy.” 

Big Dog: “Precisely.” 

Little Dog: “Well, at least I can buy the old dog bowl and deal with the sliding if I want. Consumer choice, you know?” 

Big Dog: “Sorry, but you’re out of luck Little Dog. The government decided that the old dog bowls are hazardous to our health. Evidently a few pups banged their heads while chasing their sliding dog bowls around the kitchen floor. So, the government outlawed the sale of them.” 

Little Dog: “So, I have to buy the new dog bowl that’s twice as expensive?” 

Big Dog: “Only if you want a new dog bowl. You can always keep your old one.” 

Little Dog: “But it’s getting rusty. I need a nice shiny new one!” 

Big Dog: “Then plan on ponying up a lot of money, because they’re twice as expensive.” 

Little Dog: “Not according to those crazy economists! How do they get away with stuff like that?” 

Big Dog: “By using that daunting mathematics you referred to. Makes them sound very scientific. The truth of the matter is that economics is inextricably intertwined with canine behavior in a hopelessly complex way. Building a precise model of the economic behavior of canines is an impossible task. So, economists are left with prescriptive models that tell us what we should be doing as rational dogs.” 

Little Dog: “Rational? Not most of the dogs that I know.”

Big Dog: “Things get even more complicated if societal power structures purposely manipulate canine choice. It raises the issue of whether dogs are truly making independent decisions. For example, video game companies hire research psychologists to design games that are difficult to stop playing. They create reward structures that are virtually irresistible, so that little pups become hooked.”

Little Dog: “Woof! Video game opioids for kids! But, isn’t that why we have government regulations to rein in those evil corporations?”

Big Dog: “Maybe, but the cure may be worse than the disease. Government is run by politicians and career employees. They have their own agenda. As I said, economics is not a science like physics. It involves many philosophical concepts regarding canine behavior. It’s not a descriptive science where we can observe nature using carefully controlled experiments with precise outcomes. The theory of gravity can’t be manipulated by huge corporations, but canine behavior can. Free markets are a great idea in principle, but they are founded on the notion of independence and free choice by rational, autonomous individuals. But if those free choices are being cynically manipulated by powerful corporations for their own benefit, or by politicians for their own benefit, then ‘free choice’ is no longer free.”

Little Dog: “Ah, good thing we have benevolent governments! Daddy Dog will look after us.” 

Big Dog: “Maybe. But who in the government decides what is good for us? The government’s composed of dogs, just like the corporations. Besides, shouldn’t we decide for ourselves what’s good for us, rather than giving up our freedom to choose?” 

Little Dog: “Just like the dog bowls. I’d rather have the choice of buying the sliding bowl for half the price if I want. Well, at least we get to pick our own government. We don’t get to pick who runs those evil corporations.” 

Big Dog: “Maybe. The concept sounds good in principle, but quite often the candidates that are running for office are not the ones that I would choose. And those candidates are also trying to manipulate you, so they can get your vote. They promise things that they can’t possibly give you.”

Little Dog: “Like promising to reform those so-called evil corporations by limiting their power, so that the politicians can run things instead? I voted for Roger Rottweiler in the last election. A noble beast of a dog.” 

Big Dog: “Great, but my point is that going from Big Business to Big Government is merely shifting from one problem to another. Possibly an even bigger problem, since a strong federal government with a large regulatory apparatus can potentially be even more coercive. After all, they don’t have to persuade you to buy their ‘product’ like a company would. They can simply order you to do it.”

Little Dog: “Yeah, but if my candidate wins then all is good, right?” 

Big Dog: “Do you agree with all of your candidate’s positions?” 

Little Dog: “Well, not exactly, but he is the best of the pack.” 

Big Dog: “Yes, but that’s only your opinion. Other dogs may not agree. Let’s say that a democratically elected government comes into office with 51% of the vote and the opposition party garners 49%. Does that mean the new government should have unfettered power to substitute their own values for the values of the entire population? What values will the new government hold, and who’s to decide if those values are beneficial for the 49% that did not vote for them? The dilemma becomes even more acute in undemocratic societies where a small elite may stay in power forever, and be completely unaccountable for the decisions that it makes and the laws that it creates.”

Little Dog: “So, government and economics are intertwined too, huh?” 

Big Dog: “Indeed. So, beware of economists who claim that their field is an objective science.” 

Little Dog: “Woof. I see what you mean. It’s hard to figure out us dogs, that’s for sure!”

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