Issues pertaining to the role of economics in the contemporary world

have always been controversial. Different individuals have different
ideas as to the roles that economics plays in the management of the
economy of countries. This question becomes even more crucial when
considering the choice of the next chairman of the Federal Reserve,
especially with regard to the aspects that should be considered in
choosing him or her. However, economics has failed the test as far as
being categorized as a science is concerned. Scholars have given varied
reasons for this. First, the economic discipline has done little to
assist in the improvement of the predictive capabilities. Indeed, its
being mistaken as a science was based on its use of quantitative
expression in math and differential equations similar to physics
(Rosenberg and Curtain 5). However, the bone of contention has been the
fact that the discipline is deficient of any record of improvement in
the predictive accuracy and range. Previously, mathematical economics
had suffered intense criticism from historical and Marxist economists
who saw it as useless as it was based on numerous idealized assumptions
pertaining to economic processes. However, Friedman answered the critics
by stating that the use of assumptions in economics was not any
different from that of physics. Indeed, idealizations are necessary and
harmless in both economics and physics (Rosenberg and Curtain 8). In
economics, they come off as indispensable approximations and calculation
devices that allow economists to predict the trends that economies,
industries and markets would follow, just the same way that they allow
physicists to make predictions about aspects such as tides and eclipses,
or avert the possibility of power failures and bridge collapse
(Rosenberg and Curtain 9).
Secondly, economists are unbothered in instances where their predictions
turn out false. This has raised questions among philosophers who wonder
what economics revolves around if it does not sufficiently concern
itself with success in making predictions so as to modify its theories
like other sciences in instances where their predictions turn false
(Rosenberg and Curtain 10). On the same note, economics has been unable
to tame science. Indeed, the prospects for the emergence of a theory
that controls the most powerful forces in the economy diminish with
increase in innovation rate, which also declines hopes for prediction
improvements (Rosenberg and Curtain 12).
The fundamental essence of economics rests on its contribution to
creative management and design of institutions that would protect
individuals from temptations such as free-riding, opportunism, as well
as general avoidance of costs pertaining to civil life while still
enjoying the benefits with which it comes. It fixes bad political and
economic institutions such as monopolies, collusions and concentration
of power, designs new ones, and improves the good ones both in the
public and private sector (Rosenberg and Curtain 13). This underlines
the fact that the appropriate candidate for the position of the chairman
of the Federal Reserve must have a clear understanding of the fact that
the economics will never be a science rather, it is a craft that should
be applied with wisdom and not algorithms in the management and design
of institutions (Rosenberg and Curtain 14). The comprehension of
Economic theory in the foreseeable future should be examined not as a
Newtonian theory but as a model of music theory. It is imperative that
economists desist from any thought pertaining to their theory being
perfectly suited to the tasks to be done and use in a manner
sufficiently wise to allow for synchronicity and results.
Works cited
Rosenberg, Alex and Curtain, Tyler. What Is Economics Good For? The New
York Times, 2013 web accessed from HYPERLINK
“http://opinionator.blogs.nytimes.com/2013/08/24/what-is-economics-good-
for/”
http://opinionator.blogs.nytimes.com/2013/08/24/what-is-economics-good-f
or/
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