New Mises Article: Economists are the New Astrologers

In my latest article for Mises.org, I take on not just the "mathiness" of modern economics, but the fact that they tend to get so much wrong. Or as Christopher Nolan put it once, “Take a field like economics for example. [Unlike physics] you have real material things and it can’t predict anything. It’s always wrong.”

In the article, I discuss Alan Jay Levinovitz' article on "The New Astrology" where he points out that,

"The failure of the field to predict the 2008 crisis has also been well-documented. In 2003, for example, only five years before the Great Recession, the Nobel Laureate Robert E Lucas Jr told the American Economic Association that ‘macroeconomics ... has succeeded: its central problem of depression prevention has been solved’. Short-term predictions fair little better — in April 2014, for instance, a survey of 67 economists yielded 100 per cent consensus: interest rates would rise over the next six months. Instead, they fell. A lot."

But he doesn't seem to draw the proper conclusions, as I note, 

"It appears that Levinovitz hasn’t quite grasped the full consequences of the argument he has espoused; namely that because economics models are mostly useless and cannot predict the future with any sort of certainty, then centrally directing an economy would be effectively like flying blind. The failure of economic models to pan out is simply more proof of the pretense of knowledge. And it’s not more knowledge that we need, it’s more humility. The humility to know that 'wise' bureaucrats are not the best at directing a market — market participants themselves are."