Question

Economics is a science. Economists employ the scientific method to try to find answers to questions that interest them. However, unlike many sciences, it is hard or impossible to make experiments in economics. In physics, if one wants to know how gravity affects an object, one could conduct an experiment where an object is dropped and the time for object to reach the ground is measured. If wind interferes, or if the object is significantly slowed by air itself, then the experiment could be moved to a vacuum chamber, eliminating any other confounding factors, so that it is precisely the effect of mass and gravity that is measured. In economics this is not possible. What if one wanted to understand the effects of raising tax rates? Can an experiment be run where half the country has high tax rates and half has low tax rates? This would never be approved. Even if an experiment like this was approved, there would be no way to eliminate confounding factors. Perhaps right when taxes were increased, the oil prices happened to drop, giving an unexpected boon to the economy. If people responded by spending more, then one would not know whether this is because of the higher tax rates, or because of the lower oil prices, or both.

With this background in mind, please consider the following question. Is economics truly a science if many experiments cannot be run? Why or why not? How could economists overcome this difficulty to still test their hypotheses and prove their theories?

Answer 1

No, Economics is not a science. A subject has to be its credibility in order to call its a science where facts are gathered of the natural world through experiments and observation. To become a subject under the category of science, it needs to follow strict scientific methods where hypothesises are tested repeatedly with parameter controlled experiments in a laboratory. As historical or cross country evidences are mostly applied to derive a conclusion of a theory or policy which are far away from the controlled experiments. As Economics can not make falsifiable claim which helps to make concrete prediction of the world and then observe the result of the prediction. Hence we can not say Economics as a truly science. Rather it falls under the Social Science category as it relies mostly on other subjects like politics, sociology, history etc where mostly the distribution of natural resources and human behaviour are considered in order to reach in a conclusion.

In order to have falsifiable claim in Economics, Economists should develop tools that help carrying out approximate scientific experiments to obtain perfect results to specific policy questions. Empirical testing and application of scientific methods on old theories will also help Economists to remove their false evidences and formulating new theories which are more relevant with the current situation.