What are some of the limitations and drawbacks of economics as a field?
Economics is a social science that examines the way people produce, distribute, and consume goods and services. This means that much of the field is based on human behavior, which can be somewhat irrational and unpredictable. For this reason, it is a science with some inherent limitations that prevent its practitioner – economists, that is – from being able to accurately predict how markets will perform and know exactly how certain policies will affect different sectors and economies. .
In addition, the field of economics suffers from the problem of non-replicability. It is impossible to accurately recreate market conditions or predict an outcome based on how the markets have behaved in the past under similar circumstances. Unlike the hard sciences, where researchers are able to isolate certain variables and determine direct cause and effect relationships, there is no way to completely isolate a variable in the world of economics. Markets are simply too big, too intertwined, and too influenced by human behavior to act in a 100% predictable way. In fact, there are so many variables involved that it’s even impossible to identify all the factors at play in the first place.
The limits of economics become particularly problematic in normative economics, which involves recommendations for how things should be and the types of policies a government should implement in order to improve a nation’s economy. Different economists come to completely different conclusions about what kind of regulation and supervision to apply in different markets and what precise results will result. While they can point to data, historical background, and other facts to back up their arguments, there’s no way to guarantee they’re right.
Because the field of economics cannot provide concrete conclusions, it is susceptible to criticism from various sources, as is the case with political economy. Politicians often use normative economics to advocate for certain policy changes that support their own agendas. They present their beliefs and assumptions to the public as irrefutable facts when in reality there is no way to verify the validity of their ideas except to put them into practice and evaluate the results.
Economics arose from the idea that human beings could study the nature of wealth in order to improve the world, but it is a problematic area. While a positive economy can help people understand what’s going on right now, it’s much more difficult to use similar thought patterns to predict the future and influence policies to ensure overall improvements. Even long-held theories considered essential aspects of economics sometimes contradict each other. Ultimately, economists must choose to subscribe to a particular school of thought that best matches their beliefs. These opposing views can cause controversy and only add to the limits of economics in effectively solving financial problems.