CB -
...My complaint against economists is that they substitute theory for fact - they don't bother digging out the facts, they just assume them.
While your statement may in large part be correct, your implication that facts outweigh theory is an overstatement.
The problem is that economic theory cannot be tested by means of a controlled experiment. There are just far too many significant, interacting variables involved. If a controlled experiment is impossible, then the 'facts' or data taken from the historical record are even less useful in trimming economic theory. It's like rolling a die 100 times and forming a law from the number of times that a six follows a five sequentially in the observed data. In some cases every occurrence of a five IS followed by a six, but this does not in any way invalidate the probability theory that controls the results of the toss of a fair die.
When someone publishes a study that claims to show that an increase in the legal minimum wage reduces unemployment at fast food restaurants in New Jersey, we know, or should know, that the study is flawed, likely from start to finish.
Regards, Don |
