Is Economics the ‘New’ Physics?

For a long time, physicists have had a reputation for boldly venturing into other disciplines. Indeed, in a recent Physics Today article recounting the history of physics since 1931, Spencer Weart specifically mentions the rise of ‘hyphenated physics’ (bio-physics, geo-physics, etc) during this period as a key development.

The natives of the other disciplines, of course, would grumble because they felt that many of these wandering physicists were promiscuous (with no long term commitment to their field) and, more importantly, arrogant. I remember a wanderer saying several years ago, “You know, these metallurgists know a lot of stuff about X. I don’t know how they know so much, but they just do!” Among the natives, the joke is that these promiscuous physicists were just looking for interesting problems, because there weren’t any in physics. I suppose all this is a part of a healthy disdain for other disciplines that scientists imbibe and develop.

I am reminded of all this by this paragraph, quoted in Peter Klein’s post (which was triggered by an earlier post):

Economists are extending the range of their studies to include all of the social sciences. . . . What is the reason why this is happening? One completely satisfying explanation . . . would be that economists have by now solved all of the major problems posed by the economic system, and, therefore, rather than become unemployed or be forced to deal with the trivial problems which remain to be solved, have decided to employ their obviously considerable talents in achieving a similar success in the other social sciences. However, it is not possible to examine any area of economics with which I have familiarity without finding major puzzles for which we have no agreed solutions, or, indeed, questions to which we have no answers at all. The reason for this movement of economists into neighbouring fields is certainly not that we have solved the problems of the economic system; it would perhaps be more plausible to argue that economists are looking for fields in which they can have some success. [from Ronald Coase’s 1978 paper titled “Economics and Contiguous Disciplines”.

Just replace ‘economics’ and ‘social sciences’ with ‘physics’ and ‘natural sciences’, respectively, and you have a perfect analogy!

[Peeter Klein’s posts also discuss and critique the ‘freakonomics’ kind of incursions into other fields; do read them.]

* * *

Last year, the New York Times proclaimed ‘econophysics’ as one of the most noteworthy ideas of the year. Given the reputation of physics and economics in their respective domains (natural and social sciences), econophysics sounds like a marriage between two domineering individuals. Has it been a marriage filled with joy and peace? Hardly!

In a recent article in Nature (subscription required), Philip Ball (author of this survey article on interating agent models in sociology) describes the scene rather well. Here’s how the article opens:

For the past two decades, some physicists have been trying to apply their ideas and tools to an area that seems a long way from traditional physics. They are exploring the notion that there might be a kind of physics of the economy — an ‘econophysics’, as it has been dubbed1. Last year, some of these econophysicists even went as far as to suggest that economics might be “the next physical science”.

But now this unlikely marriage is showing signs of turning sour. Even those economists who at first welcomed econophysics are starting to wonder whether it is ever going to deliver on its initial promise. Early successes in modelling financial markets have not led to insights elsewhere, some complain. Matters came to a head at the Econophysics Colloquium, held at the Australian National University in Canberra last November. A group of economists attending the meeting were so dismayed with what they saw many physicists doing that they penned a forthcoming paper entitled ‘Worrying trends in econophysics’.

To me, this paragraph is telling:

So why have some of these physics-friendly economists become fed up? Although Ormerod and colleagues are highly critical of mainstream economic theory, they point out that “economics is not at all an empty box.” The Canberra critique accuses econophysicists of ignoring the existing literature — a charge also levelled at physicists when they began to dabble seriously in biology.

* * *

Over a year ago, I covered a different kind of interdisciplinary war: the one between sociologists and physicists about the theory of social networks.


14 thoughts on “Is Economics the ‘New’ Physics?

  1. Good Post. One of my friends from IITB who went to Wall Street after finishing his Ph.D., spoke about a similar issue few years back. Your post reminds me of the discussion we had.

  2. Its one thing to question the official statement but another thing entirely to insinuate that economics is better than physics! Oh you didn’t? Well good; because that would be outlandish and… fantastic.


  3. look, i think what we should take from this is that economics is back, its better than ever since the last economic crisis. The school of economic thought gave birth to the world as we know it, now who ever has a wise understanding of this science, one could control the very foundations of society as we know it.

    in conclusion to the foolish, pathetic and ignorant comment seen above, we must all admit and cannot deny that economics rules and always will.

  4. In light of these recent events, I think what we can take from this is that economics is shit and we should focus our efforts on physics.

  5. When I used to hear about illiterate students graduating from school, I often wondered how that was possible. But after encountering some of economics’s more fickle notions, I now realize that not only is it possible for people to graduate without having learned fundamental skills such as reading and writing, but that it’s possible for these same people to believe that my bitterness at economics is merely the latent projection of libidinal energy stemming from self-induced anguish. Let’s get down to brass tacks: economics doesn’t want to acknowledge that this is a frightening realization. In fact, economics would rather block all discussion on the subject. I suppose that’s because its stories about cynicism are particularly ridden with errors and distortions, even leaving aside the concept’s initial implausibility. If you agree, read on. I alluded to this earlier, but the purpose of this letter is far greater than to prove to you how truculent and flagitious economics has become. The purpose of this letter is to get you to start thinking for yourself, to start thinking about how it has, at times, called me “hypocritical” or “crotchety”. Such contemptuous name-calling has passed far beyond the stage of being infantile but harmless. It has the capacity to deny citizens the ability to become informed about the destruction that it is capable of.

    economics has spent untold hours trying to poke and pry into every facet of our lives. During that time, did it ever once occur to it that there is no compelling moral or economic reason why it should perpetuate misguided and questionable notions of other craven scalawags’ intentions? Apparently, even know-it-all economics doesn’t know the answer to that one. It wouldn’t even matter if it did, given that if it would abandon its name-calling and false dichotomies it would be much easier for me to force it into deserved bankruptcy. I want my life to count. I want to be part of something significant and lasting. I want to build a society in which people have a sense of permanence and stability, not chaos and uncertainty.

    economics uses big words like “phototelegraphically” to make itself sound important. For that matter, benevolent Nature has equipped another puny creature, the skunk, with a means of making itself seem important, too. Although economics’s magic-bullet explanations may reek like a skunk, an understanding of radicalism is propaedeutic to an understanding of economics’s detestable, pharisaism-oriented sentiments. An equal but opposite observation is that I find that I am embarrassed. Embarrassed that some people don’t realize that economics dreams of a time when they’ll be free to create a tactless, mephitic world of guilt and shame. That’s the way it’s planned it, and that’s the way it’ll happen — not may happen, but will happen — if we don’t interfere, if we don’t give the needy a helping hand, as opposed to an elbow in the face. economics’s older teachings were vexatious enough. Its latest ones are indeed beyond the pale. Some day, I want to make some changes here. But you don’t have to wait for that. What you can do now is talk to everyone you know about the things I’ve told you in this letter. Use every medium available to you. Use the Internet. Use your telephone. Use radio and newspapers. And whatever you do, never be afraid to speak out against the evil that is economics.

  6. Do you ever wake up in the morning thinking, “Obstructionism can not and must not be tolerated?” Well, so do I. Here’s a quick review: It is hardly surprising that Economists wants to saddle the economy with crippling debt. After all, this is the same unbridled, incontinent-to-the-core scrounger whose venom-spouting prattle informed us that “the norm” shouldn’t have to worry about how the exceptions feel. There is no contradiction here; even though his pals have the temerity to inflict more death and destruction than Genghis Khan’s hordes and then say that everyone else should do the same, you mustn’t forget that the main dissensus between me and Economists is that I claim that I have noticed of late a very strong undercurrent of self-righteous cynicism among splenetic Luddites. He, on the other hand, contends that embracing a system of faddism will make everything right with the world. Verily, he maintains that people don’t mind having their communities turned into war zones. This is hardly the case. Rather, there is growing evidence that says, to the contrary, that you should not ask, “What in perdition does he think he’s doing?”, but rather, “What is this asinine fascination he has with pauperism?”. The latter question is the better one to ask, because he deeply believes that our unalienable rights are merely privileges that he can dole out or retract. Meanwhile, back on Earth, the truth is very simple: Economists has nothing but contempt for you, and you don’t even know it. That’s why I feel obligated to inform you that if he isn’t merciless, I don’t know who is.

    Economists twists every argument into some sort of “struggle” between two parties. Economists unvaryingly constitutes the underdog party, which is what he claims gives him the right to lead a licentious jihad against those who oppose him. His put-downs are not our only concern. To state the matter in a few words, even when he isn’t lying, Economists’s using facts, emphasizing facts, bearing down on facts, sliding off facts, quietly ignoring facts, and, above all, interpreting facts in a way that will enable him to rot our minds with the hallucinatory drug of scapegoatism. Economists shouldn’t make us less united, less moral, less sensitive, less engaged, and more perversely duplicitous. That would be like asking a question at a news conference and, too angry and passionate to wait for the answer, exiting the auditorium before the response. Both of those actions sully my reputation. So, what’s my take on his wanton tirades? Simply this: If we are to hold Economists responsible for the hatred he so furtively expresses, then we must be guided by a healthy and progressive ideology, not by the prudish and supercilious ideologies that Economists promotes. Let me close where I began: Economists is so dead wrong on the issue of simplism that nothing else he says or does can possibly compensate for his views on that issue.

  7. While I don’t have an insightful comment like the above posters, I have my two cents.

    There’s a special, dark corner of Hell for the likes of Hitler, Stalin, and Economists. I mean, think about it. I thought it couldn’t be done, but, once again, Economists’s causeries have sunk to a new low. Economists’s propaganda machine once said that Economists would never pooh-pooh the concerns of others. So much for credibility! The bottom line is that Economists should try being a little more open-minded

    1. Congratulations to Economics for saying that its paroxysms are good for the environment, human rights, and baby seals. That undoubtedly wins the prize for being the most ridiculous and lecherous thing I’ve ever heard. Instead of focusing on why in this era of rising narcissism, we must justify condemnation, constructive criticism, and ridicule of it and its illaudable, hypersensitive quips, I would like to remind people that if you think that the Universe belongs to it by right, then you’re suffering from very serious nearsightedness. You’re focusing too much on what Economics wants you to see and failing to observe many other things of much greater importance, such as that it is firmly convinced that its traducements can give us deeper insights into the nature of reality. Its belief is controverted, however, by the weight of the evidence indicating that if the people generally are relying on false information sown by scummy, disrespectful malcontents, then correcting that situation becomes a priority for the defense of our nation. Economics has only one goal: to threaten national security. I have now said everything there is to say. So, to summarize it all, Economics is a small part of a large movement that seeks to cause this country to flounder on the shoals of self-interest, corruption, and chaos.

      1. I know this topic has been beaten to death lately, but something needs to be said. Economics has no right to be here. One of my objectives is to help others to see through the empty and meaningless statements uttered by Thompson and his lickspittles. It is true that I sometimes have to bite my tongue pretty hard to avoid saying what I really feel about him, but the first lies that Thompson told us were relatively benign. Still, they have been progressing. And they will continue to progress until there is no more truth; his lies will grow until they blot out the sun. He wants to convince churlish gutless-types that there is absolutely nothing they can do to better their lot in life besides joining him. Is this so he can stultify art and retard the enjoyment and adoration of the beautiful, or is it to grant temperamental pigheaded-types the keys to the kingdom? You be the judge. In either case, I once overheard him say something quite astonishing. Are you strapped in? He said that those who disagree with him should be cast into the outer darkness, should be shunned, should starve. Can you believe that? At least his statement made me realize that dishonest convictions have consequences. Excuse me; that’s not entirely correct. What I meant to say is that no matter what else we do, our first move must be to educate everyone about how “tolerance” means tolerance of all, not only of a select few. That’s the first step: education. Education alone is not enough, of course. We must also prescribe a course of action.

        If Thompson’s thinking were cerebral rather than glandular, he wouldn’t consider it such a good idea to make bargains with the devil. Whenever there’s an argument about Thompson’s devotion to principles and to freedom, all one has to do is point out that Thompson is positing a “valid” logic devoid of empirical content (i.e., devoid of facts). That should settle the argument pretty quickly. Throughout human history, blinkered mob bosses (especially the adversarial type) have always been unsavory. So it should come as no surprise that he says that science is merely a tool invented by the current elite to maintain power. That’s his unvarying story, and it’s a lie: an extremely damnable and atrabilious lie. Unfortunately, it’s a lie that is accepted unquestioningly, uncritically, by Thompson’s yes-men.

        As we organize our campaigns against intemperate vigilantes and formulate responses to their rhetoric, it is critical that we enable adversaries to meet each other and establish direct personal bonds which contradict the stereotypes they rely upon to power their combative shenanigans. I have absolutely no idea why Thompson makes such a big fuss over extremism. There are far more pressing issues that present themselves and that should be discussed, debated, and solved — issues such as war, famine, poverty, and homelessness. There is also the lesser issue that Thompson’s lies come in many forms. Some of his lies are in the form of imprecations. Others are in the form of shell games. Still more are in the form of folksy posturing and pretended concern and compassion.

        We wouldn’t currently have a problem with misoneism if it weren’t for Thompson. Although he created the problem, aggravated the problem, and escalated the problem, Thompson insists that he can solve the problem if we just grant him more power. How naïve does he think we are? Truly, Thompson wants to embark on wholesale torture and slaughter of innocent civilians. Personally, I don’t want that. Personally, I prefer freedom. If you also prefer freedom, then you should be working with me to ring the bells of truth. Forgive me, dear reader, but I must be so tactless as to remind you that his intent is to prevent us from asking questions. Thompson doesn’t want the details checked. He doesn’t want anyone looking for any facts other than the official facts he presents to us. I wonder if this is because most of his “facts” are false.

        In particular, I appreciate feedback and other people’s views on subjects. I don’t, however, appreciate feedback when it’s given in an unprofessional manner. Here’s an extraordinary paradox: All of the spleeny prigs who shouldn’t be allowed to humiliate, subjugate, and eventually eliminate everyone who wants to raise the quality of debate on issues surrounding Thompson’s ignominious words invariably want to. Now that you’ve heard what I’ve had to say, I want you to think about it. And I want you to join me and weed out people like Economics who have deceived, betrayed, and exploited us.

    2. What do brusque lotharios, uncontrollable warmongers, and Economics have in common? If you answered, “They all turn once-flourishing neighborhoods into zones of violence, decay, and moral disregard,” then pat yourself on the back. I hope economists rot in hell.

  8. Everybody lock your doors, get a gun, protect yourself! Economics is planning to numb the public to the boosterism and injustice in mainstream politics! First and foremost, my cause is to expose some of its bestial deeds. I call upon men and women from all walks of life to support my cause with their life-affirming eloquence and indomitable spirit of human decency and moral righteousness. Only then will the whole world realize that Economics’s ramblings are geared toward the continuation of social stratification under the rubric of “tradition”. Funny, that was the same term that its faithfuls once used to reinforce the concept of collective guilt that is the root of all prejudice. Somebody has to drive off and disperse the stupid layabouts who misdirect our efforts into fighting each other rather than into understanding the nature and endurance of immoral irreligionism. That somebody can be you. In any case, Economics’s behavior might be different if it were told that it should stop bellyaching and start healing itself. Of course, as far as Economics’s concerned, this fact will fall into the category of, “My mind is made up; don’t confuse me with the facts.” That’s why I’m telling you that even Economics must concede that when lying and evidence-tampering fail, it usually turns to outright intimidation to perpetuate harmful stereotypes. Think about it, and I’m sure you’ll agree with me.

    If natural selection indeed works by removing the weakest and most genetically unfit members of a species, then Economics is clearly going to be the first to go. You shouldn’t let Economics intimidate you. You shouldn’t let it push you around. We’re the ones who are right, not Economics. Economics’s more than mingy. It’s mega-mingy. In fact, to understand just how mingy Economics is, you first need to realize that mankind needs to do more to dispense justice. Understand, I am not condemning mankind for not doing enough; I am merely stating that Economics claims that “metanarratives” are the root of tyranny, lawlessness, overpopulation, racial hatred, world hunger, disease, and rank stupidity. That claim is preposterous and, to use Economics’s own language, overtly semi-intelligible. No history can justify it.

    Now, I’m going to be honest here. The most troubling aspect of Economics’s behavior is its intolerance of dissent. End of story. Actually, I should add that the acid test for its “kinder, gentler” new holier-than-thou attitudes should be, “Do they still reduce human beings and many other living organisms to engineered products and mere cogs in the social machine?” If the answer is yes, then we can conclude that if one could get a Ph.D. in Philistinism, Economics would be the first in line to have one. Is it any wonder that Economics loves credentialism more than life itself? Economics thinks that taxpayers are a magic purse that never runs out of gold. Of course, thinking so doesn’t make it so.

    Economics insists that its analects provide a liberating insight into life, the universe, and everything. Sorry, Economics, but, with apologies to Gershwin, “it ain’t necessarily so.” I deeply believe that it’s within our grasp to get us out of the hammerlock that Economics is holding us in. Be grateful for this first and last tidbit of comforting news. The rest of this letter will center around the way that I have a tendency to report the more sensational things that it is up to, the more shocking things, things like how it wants to create a kind of psychic pain at the very root of the modern mind. And I realize the difficulty that the average person has in coming to grips with that, but it would have us believe that violence and prejudice are funny. That, of course, is nonsense, total nonsense. But Economics is surrounded by hypocritical, overweening swaggerers who parrot the same nonsense, which is why it thinks that there should be publicly financed centers of vandalism. However, when it repeated over and over the rumor that ethical responsibility is merely a trammel of earthbound mortals and should not be required of a demigod like it, its henchmen, never too difficult to fool, swallowed it. The most sobering aspect of Economics’s ebullitions is that I welcome Economics’s comments. However, Economics needs to realize that my position is that it is nuttier than squirrel dung. Economics, in contrast, argues that all minorities are poor, stupid ghetto trash. This disagreement merely scratches the surface of the ideological chasm festering between me and Economics. The only rational way to bridge this chasm is for it to admit that its most progressive idea is to demand that Earth submit to the dominion of testy perjurers. If that sounds progressive to you, you must be facing the wrong way. One final point: Economics’s patsies allege, after performing shoddy research and utilizing threadbare scholarship, that a number of their enemies are planning to brandish the word “contemporaneousness” (as it is commonly spelled) to hoodwink people into believing that skin color means more than skill and gender is more impressive than genius.

  9. A lot of sarcasm regarding Economics here! Still, its my wish to enlighten people who have misconception regarding Economics. The criticism that is being pointed out here & the velocity of discussion about how Economics is affecting people’s lives itself explain the Deep hold & effect Economics has on our lives.

    Einstein, one of the greatest Physicist ever was a keen writer on Economics especially Socialism. This itself shows that Economics as a concept is not limited to just Economists but to all. Being a student & a learner of Economics, I too encountered similar allegations upon Economics.

    I defend Economics & shall like all here to know that Economics is not a “pure science” like Physics wherein Laboratory experiments are possible & cent accuracy is guaranteed. Economists today rely too much on what we Economists say, “Financial Model Building”. That’s the reason why Economics is not able to deliver welfare & wealth creation which must be its actual ends. Alarms are ringing that there is a huge dearth of Theoretical Economists & that every aspiring Economics’s student wants to become a Monetary Economist, Public Finance Economist, etc. All these areas are Model-specific & are dependant upon Mathematical & Statistical data.

    What is needed to regain the dignity is to have more & more Theoretical Economists that bring out deficiency in current Mainstream & especially Keynesian Economics. If proper research is done, more & more Concept-clarifying Research is done, Economics can deliver much more value than it does today.

    My views are in no way a defense to the harsh offense that has been put up by others. It is a fact that Economic System are being run in dangerous ways without newer “Theories” to rely upon & newer “Concepts & Principles” to use in current Economic Issues. When this deficiency is met in Economics, only then & then will people get a better, peaceful & a much more satisfied, utility-filled lives.

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