It’s trite and true to observe that economics differs (or should differ) in its scientific method and in its aspirations from other sciences such as physics and chemistry.  Of all the physical, or non-social, sciences, biology is the science that is most like economics: central to both biology and to economics is the quest to understand the logic of undesigned order, and to interpret observed real-world phenomena in light of that understanding.

The fact that economics cannot make specific predictions about, say, what the price of gold will be tomorrow or whether or not this particular government program will in fact be followed in X-months time by a Y-percent increase in unemployment and a Z-percent fall in nominal GDP reflects the enormous complexity of economic phenomena rather than any weakness, faultiness, or ‘immaturity’ of economics.  As Hayek argued, the best that the best economists can do is to make plausible “pattern predictions.”

For me, economics is largely about sparking the right questions.  Asking the right questions, even if it is impossible to give 100% correct or very detailed answers to those questions, goes a surprisingly long way toward ensuring that thinking about the economy is sound.

Read more here….

Read the article “The Economic Way of Asking Questions” on cafehayek.com.