The best you get is hypotheses that are consistent with repeated observations.
I’m really curious whether, in practice, you make your hypotheses in advance of your experiments.
ETA: Actually, to be a bit more general, I'm very interested in every bit of light you can shed about how hypotheses come to you.
I get that you are playing devils’ advocate but at some point it just becomes denial.
Believe me, it's not denial. My aim is more to question how it is that we can't adopt an attitude in which methodical experimentation is acceptable. That's not the same as just collecting data. It makes a conscious and deliberate attempt to discover the nature of causes. I'm not blaming anyone for not doing this, because it's not like there's someone even responsible. We're all responsible, and only in the way that people are responsible for not knowing something until they try to discover it. A quite normal kind of responsible, but also a changeable one.
For some reason you are treating their statements as if they have done no analysis at all and have no experience and knowledge at all.
Not at all. I'm asking some question, is all. I was actually hoping for this discussion not to be adversarial at all, and that you might have some useful insight into how economics could be more scientific, rather than concluding that the best we can do is collect some data and trust a bunch of experts to tell a good story, and throw up our hands in despair at the stupidness of people and the evilness of our political system.
as I understand it you are on really shaky ground to make a change to conditions for a single subject and then claim causation of any observed outcome.
I don't think you even need to be a scientist to see that as completely and utterly false. I could drop a single rock repeatedly to observe extremely reliably that when I open my hand, it falls to the ground. It would only apply to that rock, at that point, but that might be enough. I could very reliably see that it was the opening of the hand that caused the rock to fall to the ground, not the other way around, just from the fact that causation can't flow backwards in time.
Anyways, I think you might be misunderstanding the level of proof that I'm talking about. There's a whole world between "we have no idea" and "we are absolutely certain" and it can take a long period of time to move from one to the other, and it is during that period that we are conducting science, not after it.
you would have so many other potential variables that without a control you would really struggle to assess much of anything
Can I ask whether you are aware of any such experiment being conducted to actually make that claim with any level of confidence? It sounds to me like you're saying no experiment can or ever has been conducted in macroeconomics. If so, I have to question on what basis you think we understand anything about it?
How would you set up the necessarily-controlled macroeconomic environments in which to conduct such experiments? You need a country-sized (or at least one the size of a large city) economy with which to experiment, and another one to act as the control.
I don't know if that's true. You can experiment on a single subject without a control. My doctors have been doing it to me for years. Try a drug, observe effect. Try raising dose, observe effect, try dropping dose, observe effect. There's hundreds of variables they can't control, but over time, a pattern emerges, whether the drug has the desired effect, and what side effects it has. From the drug trials conducted on a massive scale they do know what to expect, but they still really can't be sure without just trying to see, what the effect will be on a particular subject. I buy in to the experiment because I'm even more interested in the answers than them, because it directly affects my wellbeing.
What I'm suggesting is that a social attitude about whether such controlled economic experimentation could be allowed might actually allow the society to genuinely discover what works for it. Since we're all subjects of such an experiment anyway, but just without any kind of methodology or consistency, or even plan, it doesn't seem like some kind of evil path to me. It seems like the difference between trusting medical science or runecasting and witchcraft.
Just quickly, because I have to pop out for some unproductive behaviour, I don't claim to know the answer, hence the question. Try popping the other hat on for a sec and tell me how it could be made more scientific...I'd be interested to see what you can come up with.
What does that word really mean?????
In this context I think it's just a measure of the change in GDP, or maybe GDP per capita. It's always been a very fraught measure to try to maximize, because it doesn't directly measure the general welfare of people at all, and the "boundary of production" is very open to interpretation. What is and is not productive behaviour? For instance, child rearing is typically not paid, but it can be hard work and is clearly of value to society in the long run. But it's popular because it's some kind of measure of the total economic power of a country. Which is why it has to be contrasted to other measures like equality, and the relationships between them need to be discovered.
and we now have two major reports, OECD and IMF, arriving at the same point using different methods/data sets, so it looks rigorous.
Yes, and both from organizations that could hardly be accused of having been raving hotbeds of radical leftwing economists.
you go with the repeated, peer-reviewed stuff
That's what policy makers should do, certainly. Unfortunately, that's also what they did when that orthodoxy was all around growth at the necessary expense of equality. Which leads to that horrid neck of the woods that sees economics in terms of class struggle rather than assuming that those in control of it actually even want equality, or see it as a good at all.
Aha, you answered while I was guessing. Timing is a fairly obvious answer. Does the methodology seem sound to you? I guess the obvious question is: Does the same apply in reverse? Can one pick growth changes and then look for lagged inequality correlation? If so, then it’s still not clear to me how one unpacks this, other than through deliberate and conscious experimentation.
ETA: And once again, just to be clear, this all devils advocate. I strongly believe that what the OECD found is correct, since the mechanism just seems more believable at a microeconomic level. But strong belief is no substitute for actual scientific understanding.
But you can observe societies where inequality has changed and observe changes in economic growth
Sure, which is what is done, and the correlation is well established. But how do you make a sound inference about the direction of causation? Correlation is pretty good indication of some kind of causation at work, for sure. But so long as a credible mechanism can be specified to describe the causation in either direction, how does one establish which is the stronger?
I have always presumed the answer lay in analyzing the timing of specific changes - implement a measure specifically aimed at inequality, then observe changes. It's an experiment of sorts...
You can’t do a controlled expt, nobody will let you.
Is that the only reason a controlled experiment can't be done, or is it impossible, even if we could get to the point of being allowed to experiment? It seems to me that in theory, economic experimentation is possible, and if questions are unsettled that could be reasonably clearly answered, it's very, very well justified. Since the alternative is just claiming to know the answers anyway, without evidence. I know it's very hard to get anyone to buy into being the control group for poverty, but every country makes conscious economic decisions all the time, and the idea of "let's try it and see" hardly seems evil to me, quite the opposite. This is, after all, an extremely important question. In fact, I'd say a refusal to approach the idea scientifically, and to insist on pretending to know all the truths of economics the way our politicians always do, seems far worse.
I've thought inequality stifles growth for a long long time, but just as a devil's advocate, for a moment, can I ask the question: How do we know which causes which? We can see that lower growth is correlated to rising inequality, but perhaps low growth causes rising inequality, rather than inequality causing lower growth?
I do think that mostly the causation is the other way, since the mechanism is clear - the wealthier one is, the less one spends as a fraction of what one has/earns. Money flow is like the blood in a the body of the economy, and if it stops flowing, the body doesn't function so well. Money pretty much exists for this purpose, to move economic goods around faster and more efficiently, rather than accumulating in stagnant piles.
But one could argue that it is the inactivity of that body that caused the blood to slow. An actual decline in the desire to spend money across the board could slow the economy all by itself. Perhaps a critical mass of comfort can be socially reached that creates inertia all by itself.
It seems like a complicated question. I'd like a good answer to it.