Inflexibility and falsifiability in economics, and the failure of rigid worldviews
February 24, 2009
By Amit Bhaduri. EPW, January 2009
It is remarkable that despite the inexactitude of economics as a body of knowledge, which should have left enough space for some if not several contesting economic ideologies, over the last 20 years or so all the major political parties in India cutting across the spectrum from the Left to the Right largely converged to a very similar point of view on economic management. Would the current global financial and economic crisis give us the courage necessary to re-educate ourselves to view the “logic of the market” more logically?
A badly kept secret among economists should be shared with non-economists. Economic theory, insofar as it consists of results derived from logically from clearly stated premises, is mostly precautionary knowledge which warns against unfounded economic propositions. Very rarely is it positive knowledge for guiding policies. There is an even more fuzzy area of economic knowledge which infers from quantitative data through statistical techniques and historical analogies. Such knowledge is even more tentative.
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