Economics is NOT Natural Science!
(It is technology of Social Science.)
Science is a process of formulating models that predict outcomes in a natural system under certain conditions, and then testing them to see if the future predictions agree. However, the goal is to find how the model is inadequately representing the natural system. When the model is refuted, it is adjusted to form a new model from what is learned about the system. Since there is an underlying system that is being approximated by the models, there is an "objective reality" (exists independently of human conceptualization) to be described by conceptual models. The models evolve representations of the relationships and features that are defined by the system. Models are useful to humans. Models are respected when they better reflect the nature of the system.
Since Descartes we have approached the task of developing models as if the systems were mechanical. This means that the properties of one part are inherent in its composition and individual properties, unaffected by the surroundings. We can study the whole system a part at a time, assemble what we have learned into a more comprehensive model. The more extensive the parts and the quality of the model's components, the better model should become.
As complex systems have been recognized and are being studied, we are beginning to appreciate that both living and physical systems are not well approximated by Cartesian approaches. A model composed of parts that are independently describable is inadequate because the system has extensive interactions among the components. Therefore, the features of a part of the system are partly determined by the components, and partly determined by the conditions surrounding the components. That is, the components have properties that partly depend on the context in which they exist. To understand responses we need to consider the entire system at once.
Nevertheless, the reality of science is a physical universe with underlying determinable properties. Only our approach to study reflects the difference between Cartesian science and complex systems. In complex systems, the system evolves and there is an "arrow of time" that prevents "retro-dictions" (predicting the conditions in the past that led to present states) and long range pre-dictions are impossible.
On the other hand economics is an artifact of human imagination, and the agreement among certain humans who "play the games" together -- thereby it is a social technology. There is no underlying physical reality other than what is identified by the players to be components. Granted, the interactions within the system may be complex, and the economic properties are determined by what people study. Nevertheless, in the economic properties are determined by and limited only by the beliefs of the "players." To build economic models one must assume certain features, and the models become part of the generators of the results. Since they are not inherently tied to the physical and biological realities, they may fail arbitrarily as the physical and biological world view of humans change -- or as people believe the physical and biological world exists. Economics in large part reflects human belief systems. When physical and biological constraints become seriously constrained for humans, economics becomes irrelevant. The game ends.
Dr. Dick Richardson
