And the Nobel Prize for Natural Science Goes to… Economics?
Posted On June 30, 2019
Berkeley Reclassifies Economics as a STEM Major
Economics can be a useful degree. Specific micro, meso, and macro economic analysis can, when done properly, help a business project or financial situation through future modeling. Economics operates best when it is demonstrating the changing relationships between the costs of goods based on concrete changes in the market structure.
However, economics is a liberal art mixed with a social science. This means that the findings of an economic study are not transferable across a broad spectrum. Instead, they are applicable within the spectrum to which the study was created.
Thus, if a company is looking into how widgets sold in the Southeast Asia sector in the fourth quarter of last year, the study is likely only applicable for the sales of widgets in that same market during the same quarter the next year. The paralogism that what happens in the third quarter of 2019 in Southeast Asia can mirror second quarter earnings in northeast Europe is a problem that we see with economic modeling. Quite simply, as Keynes puts it, “[Economics] works well in a lab but cannot work in the real world.”
According to the Daily Californian, UC Berkeley has joined MIT and Cornell in classifying economics as a science, technology, engineering, and mathematics (STEM) major. While econometrics could meet that definition, which is used in securing of funding for grants and work visas, economics falls woefully short.
Economics has too much “art” in it to qualify as a STEM field.
Problems with Classifying Economics as a STEM Field
STEM fields create findings that are repeatable across a broad cross-section and are applicable to real world applications. Economics, however, fails in all of these categories.
Economic phenomena consist of isolated events which occur once, and because of the nature of macro- and meso-economic analysis, cannot be repeated. Micro-economic experiments can be repeated, but their results are only transferable to the exact set of variables in which the study was done, which also are unlikely to repeat.
Moreover, economic analysis cannot be applied to a cross-section, similar to qualitative research. Economics must have matching variables to be used. “The reactions of my junior Econ 357 class to the election of Donald Trump: Spending habits” really has no application because the first election of Donald Trump will not happen again. Thus, it is a historical study rather than a STEM study.
Finally, application of economic forecasting to the real world is dangerous. Economic models are simply predictions, similar to statistical predictions. Economics should be on the outside looking in at the STEM field because it is an “art” not a “science.”
Academic Advocates Get a Failing Grade
Too often advocates for this classification argue that as econometrics is a STEM subject and include it within economics (as well as business), then by extension the entire discipline of economics should be included within the STEM framework.
Once again, we have a solecism; just because you say something is something does not make it something. Here, we have a case of economics identifying as a science, and academics are on the move to accommodate its “subject choice.”
There is a reason why STEM fields were created in such a limited manner. There is a great need in society for STEM training. There is no need in society for economists; in fact, there are too many of them.
Show me a famous economist and I will show you where their theory was misused and cost people their lives. Marx, Mises, and Keynes were all brilliant academics, but their theories could not be accurately applied to the real world. Mises came the closest, but his capitalism modeling often degraded to proto-plutocracy.
Classifying economics as STEM opens the door for other social sciences and arts to seek the money set aside for STEM education, the latter which is needed in the United States today.
Economics is an Art, Not a Science
While I am not opposed to economics, since it creates a history of why we are where we are, no one should condone its use as STEM education and as accepted fact. Like conflict management, economics works in a world of theory, and, as such, can only be applied as far as the theory is reliable.
Economics has too much “art” in it to be a STEM field. We need to keep the funding differentiated so that the United States can keep winning in inventions, engineering, and science.
Economics is important historically mainly because of the times when people put too much faith in economic theory, and it failed them. Now we are seeing it again as economic theory posturing as natural science.
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Dr. Christopher Smithmyer is a writer for NRN, the Vice President of International Affairs at Brav Online Conflict Management, and an Adjunct Professor of MBA Business at Doane University. He is also part of the founding team at BlackWalletLTD, one of the leaders in stable coin 2.0 ecosystem maintenance. Dr. Smithmyer’s focus is international business and finance, along with reviews of board games, weapons platforms, and survival items.