It seems I hit a nerve last week when I said: But if economists say, as they have for centuries, that a minimum wage raises unemployment, reporters treat them skeptically and feel they need to find a contrary quote to "balance" their story.
wait there are people out there that belive that raising the minimum wage, will decrese unemployment?I have been for raising the wage, but always despite the fact that it will destroy some peoples jobs. (I just think keeping wages artificially high is good for society).
I'm surprised I feel moved to comment, but the discussion of physics vs economics is just too interesting to leave alone.
My opinion as a physicist is that much of physics, especially the physics that gets lots of popular press, is highly speculative and should be treated as such. We don't know how many dimensions the Universe has, we only have some interesting and extremely speculative theories that suggest certain answers. Does anyone really believe otherwise? We have some idea of the age of the Universe, though the accepted estimate has changed significantly in the past decade. Might it change again by a factor of 2 or 10 or 1000 over the next ten years? Probably not, but this is speculative territory and I wouldn't be shocked (just mildly, and pleasantly, surprised).
But then we have other areas of physics, atomic physics, condensed matter physics, fluid dynamics and statistical mechanics, etc, where we have very accurate theories that make wonderfully accurate predictions. All this has been built up over a long period by repeated testing of ideas against experiment. This success (which has made a great deal of modern technology possible), isn't traceable to the brilliance of physicists as people, but to the effectiveness of the scientific algorithm for developing knowledge, in which both speculation and empirical test play equally important roles.
I think economics doesn't get quite as much respect because it hasn't been as strongly committed to testing its theories empirically, and rejecting those ideas that do not work. Serious people are still quibbling over the Efficient Markets Hypothesis, despite absolutely overwhelming evidence against it. It's taken 30-40 years for it to become acceptable for economists even to begin studying systematically the way people really make decisions, in contrast to what perfect rationality would imply.
I also find it more than a little strange that economics papers so often adopt an extremely formal mathematical tone, with theorems and lemmas, etc, much more so that do papers in theoretical physics. My suspicion is that this is in part to give the illusion of scientific certainty, and therefore to confer authority on the theory and its developers. Much more impressive would be theories for basic economic phenomena that met very stringent empirical tests, theories to which every economist could point and say "this clearly works". As far as I understand, there is just no such thing.
One other comment regarding what journalists should believe when asking the experts about how things work. A good journalist doesn't just ask the experts for their opinions, but for the reasoning behind those opinions. If you find that lots of experts have different opinions, and different reasons behind them, you begin to suspect you're dealing with a field in which there isn't a great deal of sound knowledge (in my opinion). And if an expert gives bad reasons, or incoherent and inconsistent ones, you've got reason to suspect their motives.
So, short answer, forget about string theory and dimensions of the universe. On far more basic issues, physics has very powerful and well tested theories and economics has nothing remotely comparable. This might be because the social world is much more complicated. It is definitely NOT, in my opinion, because physicists are smarter than economists, but may also in large part be due to some particularly damaging theoretical paradigms in which much of economics has been stuck for a long time (rational expectations, fixation on equilibria, etc.)
Simon, it is sad to see you under-weighing the beliefs of experts, because that will surely lead you into belief error.
Robin, it is sad to see you giving so much weight to qualifications without first determining whether they represent real expertise.
The opinions of experts may be correlated because they converge on truth. There may be other reasons. A look across human history indicates that people socially recognized as experts were often not only mistaken, but did not know what they were talking about.
I'm just going to boldly defy the textbook economics and say that all economists for centuries have been wrong, and here's why I think so.
Everything I can think of indicates that demand for unskilled labour (let's use this label for all kind of cheap hard-to-outsource labour - the kind that typically gets near minimum wage) is highly inelastic. So if legislation forces costs of unskilled labour higher by X%, demand will drop by Y%, for Y being much lower than X. For the sake of example let's make X=20%, Y=2%, but the argument follows the same way.
If minimum wage is below market rate for a particular kind of unskilled labour, raising it a bit won't have any effects. If it's above market rate it will have an effect of increasing costs of unskilled labour. Worker gets some part Z% of this cost, the rest going for taxes, and all kind of expenses related to employing someone. Let's assume the Z% doesn't significantly change before and after introduction - share of admin costs will most likely go down, but taxes can go either way, so let's just hold Z% constant.
So far we have two big effects: Y% decrease in employment in unskilled labour sector, and X%-Y%-Y*X% increase in income for people in this sector, even including those that just lost their jobs. With numbers from the example it's 2% drop in employment and 17.6% increase in income for the working poor. This money isn't taken from thin air of course, it's taken from everyone, and demand reduction effect is already included here. As a side note nobody would need to lose a job because of it, the working poor as a group would just work 2% fewer hours, what can mean some people losing jobs, or some people going part-time, or any combinations of two.
What textbooks of economy get wrong is focusing solely on the smaller demand drop effect, and completely ignoring a lot more significant transfer of wealth effect.
If this transfer of wealth has even modest positive impact on economic growth, or it changes structure of demand to increase demand for unskilled labour, it can be easily a lot stronger than naively calculated reduction in demand.
There are two more effect here - increasing value that unemployed people can get from getting a job, and decreasing the value unskilled people get from increasing their marketable skills. The first is mostly a good thing, the second is mostly a bad thing.
I don't know if transfer of wealth increases economic growth, or changes demand structure, or how it quantitatively make people go up the employment scale. I know that any of these effects can easily overwhelm small drop in demand for unskilled labour, and that's why we need hard empirical data instead of this naive theory - the thing is we don't have much macroeconomic hard data on anything, there are just too many things happening simultaneously, and we're limited to observing a tiny not-even-close-to-independent sample.
Even if this caused tiny increase in unemployment, I would be surprised if this transfer of wealth didn't have a lot stronger beneficial social effects (reducing all kinds of poverty-related bad thing like crime, children malnutrition, and so on) than negative effects from tiny unemployment increase.
The Democrats were carried into power this past election largely upon an anti-incumbent tide, but one should also acknowledge that House Speaker Nancy Pelosi put together a modest package of legislative priorities in order to give the Dems some substan...
As others have pointed out, economics is argued over heavily because it is nearly impossible for most people to look at economic theory without considering the way in which it is likely to drive policy. Theory that supports policies which are (for possibly unrelated reasons) considered harmfull is likely to be opposed, this is a flaw in human nature, but it is pervasive and certainly not limited to economics.
Secondly, people are often skeptical about economics because, it does often seem that economic decision making, even by supposed experts, is driven by ideological bias. For recent examples of this see supply side economics, or Stiglitz detailed account of the failure of the washinton consensus policies in Asia and Russia. Or another example, look at how liberalising the Californian energy market, led to massive fraud, failures in supply and increased cost. All of these are examples of people having "faith in free markets" or in a particular set of polcies (washington consensus) rather than sitting down and really thinking about how the particular markets involved would react to the proposed policies.
Thinking based on ideology or personal or class interests occurs at both ends of the economic spectrum, both economic liberalizers and socialists are guilty of it.
"But if economists say, as they have for centuries, that a minimum wage raises unemployment, reporters treat them skeptically and feel they need to find a contrary quote to "balance" their story. "
A standard liberal critique of the mainstream media (AKA 'liberal media') is precisely that. Given an overwhelming consensus of experts, reporters will strenuously seek opposing quotes for 'balance', even if those come from outright intellectual prostitution brothels and astroturf organizations (e.g., CEI, AEI, Heritage, CATO, TCS).
Prominent recent examples would be evolution and global warming; a bit back would be supply-side economics. Of course, the difference would be that very, very few prominent biolgists or climatologists would support fraud and junk science, while 'expert' support for Reagan/Bushnomics was plentiful.
At http://robertvienneau.blogs..., I provide some references arguing that the intro textbook story about minimum wages is invalid and incoherent on its own terms.
passing_by, as to the historical graph of human wealth versus time again, the fact the big explosions in wealth all occurred after technological revolutions spread to large numbers of people (i.e. the agricultural, industrial revolutions etc) suggests that the effects of economic policy on wealth creation are completely swamped by factors like technology and education any way.
Robin, Getting back to something on topic, possibly the reason why economists don't get as much respect from the general public is due to three factors (It seems to me): (a) Economics is a lot more complicated than physics, (b) It’s a lot more domain specific and (c) There is much more motivation for hidden agendas and special interest groups to distort or bias results.
Economics ain't physics. For physics it turned out that the basic abstract principles behind the universe were very simple and has wide applicability. Economic models however are more complex and have narrower applicability. There are all sorts of confounding variables and the complexity of human nature to deal with. Results obtained in one narrow social context don't necessarily apply to another. Change the background social conditions even slightly and some particular model might fail. Given all this some might say we're better off with plain old common sense. Finally because economics is strongly associated with politics there are reasons for greater distrust due to distortion from special interest groups.
Michael, yes, my primary complaint was about the *relative* treatment of speculative physics and economics. So regarding that issue I don't mind if the media finds "balance" with opposing views in economics, if they would also do so in speculative physics. I'm not convinced of your summary of the media on the min wage, that it all acknowledges the sign and just argues about the size of the effect. Otherwise people wouldn't jump on me so vigorously for making my claim only about the sign.
"Fans of the free market had everything they could want... no minimum wages, no welfare, no big government etc etc."
*Everything?* Um, how about freedom to contract, or any freedom at all, for that matter?
I am not sure those countless generations of slaves, serfs, conquered subjects, and just plain old peasants would agree that they lived in eras where free market transactions were the norm. Actually, I'm guessing they would tell you they lived in a very regulated society...on pain of death.
Accordingly, I'm not sure all those nasty, brutish and short years of our ancestors are exactly a good model of what benefits free markets offer us.
True, if I had to choose between Mongols pillaging my town and and over-regulated economy , I would likely choose the latter. But that is a false choice, isn't it?
I posted a comment over at Drum's journal that you may not have read, as it looks like you gave up on that comment stream when you said something about posting this piece just before my comment showed up.
I'll post some of it at the end here because I still see those sections as relevant, but I'm going to change my tack on the main thrust a bit based on your post here.
I agree that your assertions about the state of economic discipline are reasonable characterizations. I can even agree that you can get from there to an assertion that "economists agree that a minimum wage raises unemployment" given certain contextual caveats. The problem is that in this argument you are suggesting that if you say that in a lay context (where we are almost certainly talking about a particular proposal which is likely to be a small increase and have a small, zero or uncertain effect), it is unreasonable for someone to counter with an economist who says that such an increase will probably have no significant effect on unemployment. Because that's the sort of "balance" that one would usually see in that spot. If you commonly see the media quoting cranks who claim that the minimum wage is likely to *increase* employment, then your demand for a cite of an economist who believes this in response to Drum's argument that it's an unsettled question is more plausible.
Averaging the respected practicioners claims is one way to get an estimate of "reality", but unless you get to that average by combining samples from essentially equivalent experiments, your average doesn't have any more claim to Truth[tm] than any particular estimate on the spectrum (which includes zero when talking about typical min-wage proposals).
Drum's assessment of the economics is reasonable. His critique breaks down because the physics you cited is every bit as unsettled as the economic question on minimum wages (really far more unsettled), and yet, as you say, whatever J.Random Physics PhD. has to say about some new theory, even when it is fairly off-the-wall speculation, will almost always be taken as TheTruth[tm] by a science reporter.
Here's what I said over at Drum's journal about that:
-------To me, the scandal here is as much the completely uncritical and uneducated treatment of physics and medicine results as gospel, as a lack of respect for economic opinions. That's not to say that there isn't a great deal of ignorance, even willful ignorance, about economics, including a lot of people who think they know much about the subject that ain't so. But the minimum wage looks like an iffy example of that, given the C&K study. Free trade would probably be a better example. In general though, economics suffers from modelitis. Most of the very clear results come from very clear models rather than mounds of empirical trials, and there is much more question about models' predictive value than there is about the models used in standard physics.
Admittedly much of what gets treated as "fact" in science journalism is not standard at all, but new, cutting edge results which are as likely to get overturned or radically re-interpreted as stand for a long time. But I'd argue that the too skeptical approach to economics is, if anything, a bit closer to optimal truth seeking behavior than is the reverence accorded physics and other disciplines.----
I stand by that. I too have issues with the idea that you have to "balance" every claim. Some claims are nearly universally supported in the discipline and offering the same outlier to everybody as if the issue is truly unsettled is foolish. Failure to differentiate between difference of degree and differences of kind is another example. But the treatment I've seen of the minimum wage issue tends not to be of this sort, because nobody argues that there is an employment increase, they merely argue that the employment costs are near zero or otherwise small and outweighed by benefits. And they can find plenty of real economists to support those positions. They don't have to dig up the same three or four everytime who make a career out of being dissenters like you see in the ID debates.
"...economists say, as they have for centuries, that a minimum wage raises unemployment..." According to Robin Hanson, that is not a statement about price theory. It seems to me to be a false statement about how economists have understood wages, at least, under, say, some interpretations of classical economics. See, for example, Garegnani (1970). Frank Hahn would also disagree with Robin Hanson's statement, albeit on different grounds.
Note that the UK, with a minimum wage nearly *double* (yes double, 100% greater) than the Federal minimum in the US had a *lower* unemployment rate than the US last year. Funny that.
'passing by', I really can't let a couple of your remarks pass ;) This one in particular had me in fits of laughter:
"Without economists to remind people about counterintuitive effects of our collective decisions, our whole wealth-generating system will erode pretty quickly, as people make apparently "just" social policies that utterly destroy incentives to strive. All the engineers and physicists in the world won't save you from the dark ages imposed by the resulting collapsing economies."
There's an interesting graph that our esteemed Robin Hanson showed us earlier this year where he charts the estimated amount of wealth in existence over time (human history). Through-out most of human history in many places the 'just social policies' you so seem to dislike were non-existent. Fans of the free market had everything they could want... no minimum wages, no welfare, no big government etc etc. But all through that time the graph of human wealth is almost completely flat. Then shortly after the rise of big government and the implementation of just social policies (i.e the modern nation state) the graph of wealth in existence suddenly explodes. Funny that.
So 'passing by', it appears that your own ideas on economics went out of date sometime prior to the 19th century...
wait there are people out there that belive that raising the minimum wage, will decrese unemployment?I have been for raising the wage, but always despite the fact that it will destroy some peoples jobs. (I just think keeping wages artificially high is good for society).
I'm surprised I feel moved to comment, but the discussion of physics vs economics is just too interesting to leave alone.
My opinion as a physicist is that much of physics, especially the physics that gets lots of popular press, is highly speculative and should be treated as such. We don't know how many dimensions the Universe has, we only have some interesting and extremely speculative theories that suggest certain answers. Does anyone really believe otherwise? We have some idea of the age of the Universe, though the accepted estimate has changed significantly in the past decade. Might it change again by a factor of 2 or 10 or 1000 over the next ten years? Probably not, but this is speculative territory and I wouldn't be shocked (just mildly, and pleasantly, surprised).
But then we have other areas of physics, atomic physics, condensed matter physics, fluid dynamics and statistical mechanics, etc, where we have very accurate theories that make wonderfully accurate predictions. All this has been built up over a long period by repeated testing of ideas against experiment. This success (which has made a great deal of modern technology possible), isn't traceable to the brilliance of physicists as people, but to the effectiveness of the scientific algorithm for developing knowledge, in which both speculation and empirical test play equally important roles.
I think economics doesn't get quite as much respect because it hasn't been as strongly committed to testing its theories empirically, and rejecting those ideas that do not work. Serious people are still quibbling over the Efficient Markets Hypothesis, despite absolutely overwhelming evidence against it. It's taken 30-40 years for it to become acceptable for economists even to begin studying systematically the way people really make decisions, in contrast to what perfect rationality would imply.
I also find it more than a little strange that economics papers so often adopt an extremely formal mathematical tone, with theorems and lemmas, etc, much more so that do papers in theoretical physics. My suspicion is that this is in part to give the illusion of scientific certainty, and therefore to confer authority on the theory and its developers. Much more impressive would be theories for basic economic phenomena that met very stringent empirical tests, theories to which every economist could point and say "this clearly works". As far as I understand, there is just no such thing.
One other comment regarding what journalists should believe when asking the experts about how things work. A good journalist doesn't just ask the experts for their opinions, but for the reasoning behind those opinions. If you find that lots of experts have different opinions, and different reasons behind them, you begin to suspect you're dealing with a field in which there isn't a great deal of sound knowledge (in my opinion). And if an expert gives bad reasons, or incoherent and inconsistent ones, you've got reason to suspect their motives.
So, short answer, forget about string theory and dimensions of the universe. On far more basic issues, physics has very powerful and well tested theories and economics has nothing remotely comparable. This might be because the social world is much more complicated. It is definitely NOT, in my opinion, because physicists are smarter than economists, but may also in large part be due to some particularly damaging theoretical paradigms in which much of economics has been stuck for a long time (rational expectations, fixation on equilibria, etc.)
Simon, it is sad to see you under-weighing the beliefs of experts, because that will surely lead you into belief error.
Robin, it is sad to see you giving so much weight to qualifications without first determining whether they represent real expertise.
The opinions of experts may be correlated because they converge on truth. There may be other reasons. A look across human history indicates that people socially recognized as experts were often not only mistaken, but did not know what they were talking about.
I'm just going to boldly defy the textbook economics and say that all economists for centuries have been wrong, and here's why I think so.
Everything I can think of indicates that demand for unskilled labour (let's use this label for all kind of cheap hard-to-outsource labour - the kind that typically gets near minimum wage) is highly inelastic. So if legislation forces costs of unskilled labour higher by X%, demand will drop by Y%, for Y being much lower than X. For the sake of example let's make X=20%, Y=2%, but the argument follows the same way.
If minimum wage is below market rate for a particular kind of unskilled labour, raising it a bit won't have any effects. If it's above market rate it will have an effect of increasing costs of unskilled labour. Worker gets some part Z% of this cost, the rest going for taxes, and all kind of expenses related to employing someone. Let's assume the Z% doesn't significantly change before and after introduction - share of admin costs will most likely go down, but taxes can go either way, so let's just hold Z% constant.
So far we have two big effects: Y% decrease in employment in unskilled labour sector, and X%-Y%-Y*X% increase in income for people in this sector, even including those that just lost their jobs. With numbers from the example it's 2% drop in employment and 17.6% increase in income for the working poor. This money isn't taken from thin air of course, it's taken from everyone, and demand reduction effect is already included here. As a side note nobody would need to lose a job because of it, the working poor as a group would just work 2% fewer hours, what can mean some people losing jobs, or some people going part-time, or any combinations of two.
What textbooks of economy get wrong is focusing solely on the smaller demand drop effect, and completely ignoring a lot more significant transfer of wealth effect.
If this transfer of wealth has even modest positive impact on economic growth, or it changes structure of demand to increase demand for unskilled labour, it can be easily a lot stronger than naively calculated reduction in demand.
There are two more effect here - increasing value that unemployed people can get from getting a job, and decreasing the value unskilled people get from increasing their marketable skills. The first is mostly a good thing, the second is mostly a bad thing.
I don't know if transfer of wealth increases economic growth, or changes demand structure, or how it quantitatively make people go up the employment scale. I know that any of these effects can easily overwhelm small drop in demand for unskilled labour, and that's why we need hard empirical data instead of this naive theory - the thing is we don't have much macroeconomic hard data on anything, there are just too many things happening simultaneously, and we're limited to observing a tiny not-even-close-to-independent sample.
Even if this caused tiny increase in unemployment, I would be surprised if this transfer of wealth didn't have a lot stronger beneficial social effects (reducing all kinds of poverty-related bad thing like crime, children malnutrition, and so on) than negative effects from tiny unemployment increase.
The Minimum Wage
The Democrats were carried into power this past election largely upon an anti-incumbent tide, but one should also acknowledge that House Speaker Nancy Pelosi put together a modest package of legislative priorities in order to give the Dems some substan...
As others have pointed out, economics is argued over heavily because it is nearly impossible for most people to look at economic theory without considering the way in which it is likely to drive policy. Theory that supports policies which are (for possibly unrelated reasons) considered harmfull is likely to be opposed, this is a flaw in human nature, but it is pervasive and certainly not limited to economics.
Secondly, people are often skeptical about economics because, it does often seem that economic decision making, even by supposed experts, is driven by ideological bias. For recent examples of this see supply side economics, or Stiglitz detailed account of the failure of the washinton consensus policies in Asia and Russia. Or another example, look at how liberalising the Californian energy market, led to massive fraud, failures in supply and increased cost. All of these are examples of people having "faith in free markets" or in a particular set of polcies (washington consensus) rather than sitting down and really thinking about how the particular markets involved would react to the proposed policies.
Thinking based on ideology or personal or class interests occurs at both ends of the economic spectrum, both economic liberalizers and socialists are guilty of it.
"But if economists say, as they have for centuries, that a minimum wage raises unemployment, reporters treat them skeptically and feel they need to find a contrary quote to "balance" their story. "
A standard liberal critique of the mainstream media (AKA 'liberal media') is precisely that. Given an overwhelming consensus of experts, reporters will strenuously seek opposing quotes for 'balance', even if those come from outright intellectual prostitution brothels and astroturf organizations (e.g., CEI, AEI, Heritage, CATO, TCS).
Prominent recent examples would be evolution and global warming; a bit back would be supply-side economics. Of course, the difference would be that very, very few prominent biolgists or climatologists would support fraud and junk science, while 'expert' support for Reagan/Bushnomics was plentiful.
At http://robertvienneau.blogs..., I provide some references arguing that the intro textbook story about minimum wages is invalid and incoherent on its own terms.
passing_by, as to the historical graph of human wealth versus time again, the fact the big explosions in wealth all occurred after technological revolutions spread to large numbers of people (i.e. the agricultural, industrial revolutions etc) suggests that the effects of economic policy on wealth creation are completely swamped by factors like technology and education any way.
Robin, Getting back to something on topic, possibly the reason why economists don't get as much respect from the general public is due to three factors (It seems to me): (a) Economics is a lot more complicated than physics, (b) It’s a lot more domain specific and (c) There is much more motivation for hidden agendas and special interest groups to distort or bias results.
Economics ain't physics. For physics it turned out that the basic abstract principles behind the universe were very simple and has wide applicability. Economic models however are more complex and have narrower applicability. There are all sorts of confounding variables and the complexity of human nature to deal with. Results obtained in one narrow social context don't necessarily apply to another. Change the background social conditions even slightly and some particular model might fail. Given all this some might say we're better off with plain old common sense. Finally because economics is strongly associated with politics there are reasons for greater distrust due to distortion from special interest groups.
Michael, yes, my primary complaint was about the *relative* treatment of speculative physics and economics. So regarding that issue I don't mind if the media finds "balance" with opposing views in economics, if they would also do so in speculative physics. I'm not convinced of your summary of the media on the min wage, that it all acknowledges the sign and just argues about the size of the effect. Otherwise people wouldn't jump on me so vigorously for making my claim only about the sign.
OK, I've been too lenient with all this generic political sniping. Keep your comments related to the post or they'll be deleted.
Marc Geddes:
"Fans of the free market had everything they could want... no minimum wages, no welfare, no big government etc etc."
*Everything?* Um, how about freedom to contract, or any freedom at all, for that matter?
I am not sure those countless generations of slaves, serfs, conquered subjects, and just plain old peasants would agree that they lived in eras where free market transactions were the norm. Actually, I'm guessing they would tell you they lived in a very regulated society...on pain of death.
Accordingly, I'm not sure all those nasty, brutish and short years of our ancestors are exactly a good model of what benefits free markets offer us.
True, if I had to choose between Mongols pillaging my town and and over-regulated economy , I would likely choose the latter. But that is a false choice, isn't it?
I posted a comment over at Drum's journal that you may not have read, as it looks like you gave up on that comment stream when you said something about posting this piece just before my comment showed up.
I'll post some of it at the end here because I still see those sections as relevant, but I'm going to change my tack on the main thrust a bit based on your post here.
I agree that your assertions about the state of economic discipline are reasonable characterizations. I can even agree that you can get from there to an assertion that "economists agree that a minimum wage raises unemployment" given certain contextual caveats. The problem is that in this argument you are suggesting that if you say that in a lay context (where we are almost certainly talking about a particular proposal which is likely to be a small increase and have a small, zero or uncertain effect), it is unreasonable for someone to counter with an economist who says that such an increase will probably have no significant effect on unemployment. Because that's the sort of "balance" that one would usually see in that spot. If you commonly see the media quoting cranks who claim that the minimum wage is likely to *increase* employment, then your demand for a cite of an economist who believes this in response to Drum's argument that it's an unsettled question is more plausible.
Averaging the respected practicioners claims is one way to get an estimate of "reality", but unless you get to that average by combining samples from essentially equivalent experiments, your average doesn't have any more claim to Truth[tm] than any particular estimate on the spectrum (which includes zero when talking about typical min-wage proposals).
Drum's assessment of the economics is reasonable. His critique breaks down because the physics you cited is every bit as unsettled as the economic question on minimum wages (really far more unsettled), and yet, as you say, whatever J.Random Physics PhD. has to say about some new theory, even when it is fairly off-the-wall speculation, will almost always be taken as TheTruth[tm] by a science reporter.
Here's what I said over at Drum's journal about that:
-------To me, the scandal here is as much the completely uncritical and uneducated treatment of physics and medicine results as gospel, as a lack of respect for economic opinions. That's not to say that there isn't a great deal of ignorance, even willful ignorance, about economics, including a lot of people who think they know much about the subject that ain't so. But the minimum wage looks like an iffy example of that, given the C&K study. Free trade would probably be a better example. In general though, economics suffers from modelitis. Most of the very clear results come from very clear models rather than mounds of empirical trials, and there is much more question about models' predictive value than there is about the models used in standard physics.
Admittedly much of what gets treated as "fact" in science journalism is not standard at all, but new, cutting edge results which are as likely to get overturned or radically re-interpreted as stand for a long time. But I'd argue that the too skeptical approach to economics is, if anything, a bit closer to optimal truth seeking behavior than is the reverence accorded physics and other disciplines.----
I stand by that. I too have issues with the idea that you have to "balance" every claim. Some claims are nearly universally supported in the discipline and offering the same outlier to everybody as if the issue is truly unsettled is foolish. Failure to differentiate between difference of degree and differences of kind is another example. But the treatment I've seen of the minimum wage issue tends not to be of this sort, because nobody argues that there is an employment increase, they merely argue that the employment costs are near zero or otherwise small and outweighed by benefits. And they can find plenty of real economists to support those positions. They don't have to dig up the same three or four everytime who make a career out of being dissenters like you see in the ID debates.
"...economists say, as they have for centuries, that a minimum wage raises unemployment..." According to Robin Hanson, that is not a statement about price theory. It seems to me to be a false statement about how economists have understood wages, at least, under, say, some interpretations of classical economics. See, for example, Garegnani (1970). Frank Hahn would also disagree with Robin Hanson's statement, albeit on different grounds.
Marc: I hope you factored population growth into that analysis.
Note that the UK, with a minimum wage nearly *double* (yes double, 100% greater) than the Federal minimum in the US had a *lower* unemployment rate than the US last year. Funny that.
'passing by', I really can't let a couple of your remarks pass ;) This one in particular had me in fits of laughter:
"Without economists to remind people about counterintuitive effects of our collective decisions, our whole wealth-generating system will erode pretty quickly, as people make apparently "just" social policies that utterly destroy incentives to strive. All the engineers and physicists in the world won't save you from the dark ages imposed by the resulting collapsing economies."
There's an interesting graph that our esteemed Robin Hanson showed us earlier this year where he charts the estimated amount of wealth in existence over time (human history). Through-out most of human history in many places the 'just social policies' you so seem to dislike were non-existent. Fans of the free market had everything they could want... no minimum wages, no welfare, no big government etc etc. But all through that time the graph of human wealth is almost completely flat. Then shortly after the rise of big government and the implementation of just social policies (i.e the modern nation state) the graph of wealth in existence suddenly explodes. Funny that.
So 'passing by', it appears that your own ideas on economics went out of date sometime prior to the 19th century...