Economic Science

Economics is a subdiscipline of the social sciences. It is alongside:

• history
• sociology
• anthropology
• political science

The expression “economic science” is terribly arrogant because it suggests that economics has attained a higher scientific status than the other social sciences. It is better to call it “political economy”. This name sets it apart from the other social sciences because of its political, normative, and moral purpose.

Political economy studied the ideal role of the state in the economic and social organization of a country. It asked what public policies and institutions bring us closer to an ideal society.

Social scientists, like all intellectuals and citizens, should participate in public debate.

• They should not just invoke grand but abstract principles of justice, democracy, and world peace.
• They must make choices and take stands in regard to specific institutions and policies, whether it be:
  • the social state
  • the tax system, or
  • the public debt.

Everyone is political in his or her own way. The world is not divided between=

• a political elite on one side
• an army of voters and spectators whose only responsibility is to vote once every four or five years.

The scholar and the citizen do not live in separate moral universes. This separation is dangerous.

For too long, economists used supposedly scientific methods which rely on an immoderate use of mathematical models which are merely an excuse for occupying the terrain and masking the vacuity of the content.

Too much energy is being wasted on pure theoretical speculation without a clear specification of the economic facts. Economists today rely on empirical methods based on controlled experiments.

When used with moderation, these methods can be useful, and they deserve credit for turning some economists toward concrete questions and firsthand knowledge of the terrain .

But these new approaches themselves succumb at times to a certain scientistic illusion.

It is possible, for instance, to spend a lot of time proving the existence of a pure and true causal relation for a useless question.

The new methods often neglects history. We cannot replay the history of the 20th century as if World War I never happened. Did a particular policy lead to a particular effect? Or was that effect due to some other cause?

No controlled experiment will ever be able to equal the historical lessons. To be useful, economists must work more closely with other social science disciplines. Conversely, social scientists in other disciplines should not leave the study of economic facts to economists. They must not flee when a number rears its head, or content themselves with saying that every statistic is a social construct, which of course is true but insufficient.

In the end, both responses are the same, because they abandon the terrain to others.

The Interests of the Least Well-Off

That French book is a good example of the “serial history” that flourished in France between 1930 and 1980, with its characteristic virtues and flaws. It shows the intellectual trajectory of François Furet and explains why his research program eventually died out.

Furet’s topic as a historian was “the incomes of the various classes of contemporary society.”

The book is rigorous, eschews all prejudgment, and seeks above all to collect data and establish facts. Yet this would be Furet’s first and last work in this realm.

Furet tried in vain to find any trace of the “incomes of the various classes of contemporary society” during the French Revolution because he turned against economic and social history of any kind.

This is a pity, since I believe it is possible to reconcile the different approaches.

Politics and ideas exist independently of economic and social evolutions. Marxist intellectuals denounced the laws from what they call the bourgeois institutions.

Yet the ups and downs of prices and wages, incomes and fortunes, help to shape political institutions which then create the ups and downs of prices and wages, incomes and fortunes.

It is possible to have an approach that is both=

• economic and political
• social and cultural
• concerned with wages and wealth.

The bipolar confrontations from 1917–1989 as communism versus capitalism are now over. They sterilized instead of stimulating research on capital and inequality by historians, economists, and even philosophers.2

The premature death of serial history had technical reasons=

• The material difficulty of collecting and processing large volumes of data in those days

• there is often very little analysis of the relation between observed economic changes and the political and social history of the period under study. Instead, one gets a meticulous description of the sources and raw data, information that is more naturally presented nowadays in spreadsheets and online databases.

• the research program petered out before it reached the 20th century.

In studying the 18th or 19th centuries, it is possible to think that the evolution of prices and wages, or incomes and wealth, obeys an autonomous economic logic having little or nothing to do with the logic of politics or culture.

When one studies the 20th century, however, such an illusion falls apart immediately. A quick glance at the curves describing income and wealth inequality or the capital/income ratio is enough to show that politics is ubiquitous and that economic and political changes are inextricably intertwined and must be studied together.

This forces one to study the state, taxes, and debt in concrete ways and to abandon simplistic and abstract notions of the economic infrastructure and political superstructure.

The principle of specialization is sound and surely makes it legitimate for some scholars to do research that does not depend on statistical series. There are a thousand and one ways to do social science, and accumulating data is not always indispensable or even (I concede) especially imaginative.

Yet it seems to me that all social scientists, all journalists and commentators, all activists in the unions and in politics of whatever stripe, and especially all citizens should take a serious interest in money, its measurement, the facts surrounding it, and its history.

Those who have a lot of it never fail to defend their interests. Refusing to deal with numbers rarely serves the interests of the least well-off.