Economics isn’t physics.  It’s not chemistry.  It doesn’t belong to the realm of the natural sciences.  Yet, modern economists insist on dressing it up in equations, models, and statistical regressions, as if human action were reducible to a formula.  Man acts, this is the starting point.  No equation can capture the infinite variability of human decision-making.

The obsession with data blinds economists to fundamental truths.  Supply and demand are not theories to be tested but axioms derived from action itself.  Prices form through subjective valuation, not mechanical forces.  Yet, the pseudo-economists continue their experiments, torturing the data until it confesses to whatever policy prescription they seek to justify.  They reduce the complexity of human action to numbers, assuming that correlation is causation, that trends are laws, and that past patterns will repeat themselves indefinitely.

They claim that through econometrics, they can guide policy.  Their models are built on sand.  The inputs are faulty because human action is not static.  The output is unreliable because human preferences change.  When their predictions fail, they tweak the model, adjust the parameters, and run the test again.  This is not science, it is an elaborate game of self-deception.  Worse, policymakers take these faulty predictions as gospel, crafting interventions that distort markets, crush entrepreneurship, and stifle innovation.

The truth is that economics is a logical science.  It begins with the recognition that man acts with purpose, seeking to remove felt uneasiness.  From this, all else follows.  If more money is printed, its purchasing power falls.  If government fixes prices, shortages or surpluses result.  These are not hypotheses, they’re logical conclusions.  Yet, the pseudo-economists scoff at this reasoning, insisting that nothing can be known without empirical validation.  They discard centuries of economic thought, replacing wisdom with data points, common sense with complexity.

The honest economist recognizes this.  He doesn’t get lost in the illusion of measurement.  He doesn’t pretend that by adding enough variables, he can predict the future.  He understands that the economy is the sum of countless individual actions, each guided by subjective values, not by mathematical determinism.  He knows that interventionists use numbers not to seek truth, but to justify their interference.

The pseudo-economists will continue their tests, their models, their predictions that fail year after year.  The laws of economics remain unchanged.  The market functions not because of central planning, but despite it.  The more people recognize this, the less power these number-crunchers will have to manipulate reality to fit their theories.  Until this is understood, the errors will persist, and the road paved by quantitative economists will lead only to ruin.

References

John Elliot Cairnes; The Character & Logical Method of Political Economy

Alfred Schutz; The Phenomenology of the Social World