Talking to My Daughter

by Yanis Varoufakis

Many people will tell you that your father doesn’t know what he’s talking about; that economics is a science. That just as physics uses mathematical models to describe nature, so economics uses mathematical models to reveal the workings of the economy. This is nonsense. Economists do make use of lovely mathematical models and an army of statistical tools and data. But this does not really make them scientists, at least not in the same way that physicists are scientists. Unlike physics, in which nature is the impartial judge of all predictions, economics can never be subjected to impartial tests. It would be not just hard but impossible to create a laboratory in which economic circumstances can be sufficiently controlled and replicated for any scientific experiment to have validity – to test for example how world history would have evolved if in 1929 the state had printed money to give to the poor instead of opting for austerity, or how Greece would have fared if in 2010 the bankrupt Greek state had refused to take out the largest loan in history on conditions of the most savage austerity ever practised. When economists insist that they too are scientists because they use mathematics, they are no different from astrologists protesting that they are just as scientific as astronomers because they also use computers and complicated charts.