Battle of Methodologies

According to the standard definition accepted by everybody on this planet, economics is the social science which means that we want to apply the scientific methods to study human beings and society. This means that history is irrelevant and we don’t study history in our economic text books. The Great Depression and Global Financial Crisis of 2007 were the biggest economic event of 20th and 21 century but none of the text books will explain what is was and why it was only because its history. History is not science. Any particular event, like WWII, is only one event but it is not a law.

Scientific approach is to look for patents which are universally invariant and they happen all the time. It this case also science requires that you have to have quantitative methods, data, have to measure everything but if something cannot be measured then it does not exist. If we say that people should be trust worthy and honest but it is something that is measurable so it is not taken into account in economic theories. Similarly if economics is part of science then we have to have equations so we can find the formula which can tell how the society will evolve, we can find a formula to tell how much you buy of any good, have to have calculus and differential equations and then we can solve these things. But the reality is that human beings don’t follow formulas.

In late 19th century in Europe there was a battle of methodologies. On the side there were people who argued that economics is a historical subject, it is qualitative, and it does not have a mathematical formula. On the other side there were the scientists who said we can’t learn anything from history as it is very particular and unique how can one learn anything from it. Unless we can find a law any historical event is useless. This argument has a great deal of logic to it but it is wrong. The reason of it to be wrong is very difficult to understand and in fact the scientific side won and it was agreed that we should treat economics as a science. So, we should look for universal laws. Scientists were talking about economic laws but actually people were hungry and starving so it is not true that there are economic laws like the law of gravity and if economic law exist because human beings make these laws and it can be changed.