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Get your own Free HomepageA LETTER TO EVERY ONE CONCERNED ABOUT THE LAG OF ECONOMIC IDEAS AS COMPARED TO HARD SCIENCES.
Dear Friend,
There is an old joke that says: The Weather Bureau reports that last year 45% of its forecasts were right. If it has forecast just the opposite they would have been right 55% of the times
Of course this is a sophism deriving from the fact that the opposite of a weather forecast is not defined; the fact of the weather not being dry, sunny and cold does not imply its being damp, cloudy and hot, it could equally have been dry, cloudy and mild.
Notwithstanding, after the collapse of communism, many economists keep repeating that this collapse proved that the opposite economic model should be applied, and this opposite model is what they call now free market economy
As a consequence, a uniform recipe is being applied all over the world: banks lend money to favor concentration of economic power so that now most of it belongs to a few emerging countries.
But recently we see how these emerging economies are beginning to sink, submerged by the dead weight of their credit. (Why they call credit, as if it were an asset, to external debt that is a liability is a mystery)
Two things cause surprise and pain: the insistence on this weather forecast sophism and the assumption that the only two possible economic systems are those mentioned by 19th Century writers.
Is it possible that since 1850 economists have not been able to create any new system?
They still debate centralized planning vs. free market -- and nothing else.
Undoubtedly Alfred Nobel was right when he did not institute a Nobel prize for economy, as he supposed there was no economic science. (The Nobel Prize for economy was created only recently)
Due to the lack of basic research economic science is still nonexistent, only empirical recipes and verbal discussions are published. Economy remains in the philosophical status of knowledge according to August Comte's classification (religious, philosophical and positive science).
It is urgent and vital that someone begins to think in depth in the problems of creation, circulation and use of wealth using true scientific research techniques.
By scientific research techniques I mean hypothesis formulation and proving by means of crucial verification. The fact that no experiment is possible in economy does not prevent the use of this method. Astronomy, for instance, has found the ways of scientifically prove its theories by careful registration and use of naturally occurring phenomena.
No science -- Physics, Chemistry, Biology, Medicine .... -- is going to begin the 21st century still discussing 19th century ideas. Only the economists remain speaking of planning vs. free market as in the times of Adam Smith or Karl Marx. Meanwhile the world risks that the collapse of planned economy in 1989 might be followed by the collapse of free market in 1999 --- and without alternative ways.
I would thank everyone for its comments on the preceding ideas, as well as for any information regarding:
a) Research conducted to find alternative ways of economic organization
b) Bibliography about scientific foundation of economic theories.
Rodolfo J. Naveiro
rnaveiro@usa.net
Please, send e-mail if you wish
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