Economics versus natural sciences

One of the most basic and crucial distinctions we all make, often without even realizing it, is the difference between purposeful action and mindless behaviour.

If I told you I’d give you $5 if you kneeled down and you would do it, that would be purposeful action. But if there was a tennis ball flying right at you and you would quickly duck, it would be a mindless behaviour.

Economics is a social science, meaning that it studies people and aspects of society. Other social sciences are for example psychology or sociology. Natural sciences, on the other hand, study the natural world. Thus the social sciences focus on the purposeful action and the natural sciences focus on the mindless behaviour.

Sciences can be also referred to as “hard”, which are the natural sciences, and “soft, which are the social sciences. We can also see many successful scientists in the field of natural sciences. This is because natural scientists are able to show proof by testing their theories. Social scientists, on the other hand, are not able to experiment and test their theories.

Take Mathematics and Economics for an example. In Mathematics, you can prove that the Pythagorean Theorem is true by trying it out on many variously sized triangles or even by measuring it.

Now let’s look at the Keynesians vs Austrians fight about the Great Depression. Keynesians believe it was caused by a collapse in “aggregate demand”, while Austrians strongly disagree, saying that it was caused by a preceding “boom” engineered by the Federal Reserve. Both sides have different opinions on how the problem should have been solved, but we cannot definitely prove any of it, since it would require us going back to that time and trying different solutions.

So, while natural scientists try to predict the behaviour of mindless objects with better and better accuracy and enjoy success because these objects usually obey a constant set of simple rules and many things can be performed in controlled experiments, economists deal with objects that have minds of their own and controlled experiments are much more difficult to perform, therefore they have to make logical deductions. Economics is similar to geometry in this way.

(Logical deduction is a form of reasoning that start from one or more axioms and moves step-by-step to reach a conclusion.)

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