Essays in Trespassing: Economics to Politics and Beyond
Why is there a Nobel prize for economics but not for the other social disciplines? Is it because we are so in debt to economics for the welfare and happiness it has brought about? I think not. The reason for the prestige of economics lies in something quite apart from its practical successes—which are hardly cause for much celebration these days. The reason is that economics, unlike its sister disciplines, claims to be a science. Alone among the social disciplines it searches for the social counterparts of overarching physical laws like the law of gravitation; and alone among the fields of social inquiry, it risks predictions from the application of its generalizations, such as the consequences that can be foretold from the workings of the “laws” of supply and demand.
Why, then, does economics, unlike the natural sciences, fail so miserably to increase our ability to impose our will on the world? The answer can be approached from two points of view. One is that the social universe is inherently much more complex than the natural universe, so that the science of economics cannot amass, or coordinate, the information required to produce a workable model. From this perspective we can assert that if we knew enough about the data of the real world, economics should be able to predict the course of national production at least as accurately as physics predicts the course of a space flight.
There is undoubtedly something in this view because the economic system resembles the physical universe in certain ways, the most important of which is that its human actors often behave in a predictable way—like so many iron filings under a magnetic field—following the arrow of economic advantage, buying cheap and selling dear. If men and women did not behave in this predictable manner, the socioeconomic system would have broken down long ago. But it is also clearly the case that we do not begin to have enough data to represent the facts of their behavior in our minds or in our computers.
It is equally valid, however, to ascribe the failure to reproduce the triumphs of science for another reason, that the object to which economics applies its analytic powers is intrinsically different from that to which natural science applies its scrutiny. The difference is that the elements of the social universe embody something lacking in physical events, namely human will, motive, interest. The root of the unpredictability and unmanageability of the economy, in this view, lies in the fact that human actors can and do change their behavior in ways that iron filings cannot. It follows that all the data in the world will not clarify the movements of the economy unless we can understand the perceptions and desires of its social particles.
It is this uneasy situation of economics, one foot in science, the other in society, that accounts for the importance of the work of Albert Hirschman. Hirschman is a distinguished economist, fully conversant with its claims …