Criticisms of economics

The dismal science is a derogatory alternative name for economics devised by the Victorian historian Thomas Carlyle in the 19th century. It is often stated that Carlyle gave economics the nickname "dismal science" as a response to the late 18th century writings of The Reverend Thomas Robert Malthus, who grimly predicted that starvation would result, as projected population growth exceeded the rate of increase in the food supply. The teachings of Malthus eventually became known under the umbrella phrase "Malthus' Dismal Theorem". His predictions were forestalled by unanticipated dramatic improvements in the efficiency of food production in the 20th century; yet the bleak end he proposed remains as a disputed future possibility, assuming human innovation fails to keep up with population growth.[124]
Some economists, like John Stuart Mill or Leon Walras, have maintained that the production of wealth should not be tied to its distribution. The former is in the field of "applied economics" while the latter belongs to "social economics" and is largely a matter of power and politics.[125]
In The Wealth of Nations, Adam Smith addressed many issues that are currently also the subject of debate and dispute. Smith repeatedly attacks groups of politically aligned individuals who attempt to use their collective influence to manipulate a government into doing their bidding. In Smiths day, these were referred to as factions, but are now more commonly called special interests, a term which can comprise international bankers, corporate conglomerations, outright oligopolies, monopolies, trade unions and other groups.[126]
Economics per se, as a social science, does not stand on the political acts of any government or other decision-making organization, however, many policymakers or individuals holding highly ranked positions that can influence other people's lives are known for arbitrarily use a plethora of economic theory concepts and rhetoric as vehicles to legitimize agendas and value systems, and do not limit their remarks to matters relevant to their responsibilities.[127] The close relation of economic theory and practice with politics[128] is a focus of contention that may shade or distort the most unpretentious original tenets of economics, and is often confused with specific social agendas and value systems.[129]
In Steady State Economics 1977, Herman Daly points out the logical inconsistencies between the emphasis placed on economic growth and the energy and environmental realities confronting us.[130] Like Frederick Soddy, Daly argued that our preoccupation with monetary flows at the expense of thermodynamics principles misleads us into believing that technological advance is limitless, and that perpetual economic growth is not only physically possible, but morally and ethically desirable as well. In Wealth, Virtual Wealth and Debt, (George Allen & Unwin 1926), Frederick Soddy turned his attention to the role of energy in economic systems. He criticized the focus on monetary flows in economics, arguing that "real" wealth was derived from the use of energy to transform materials into physical goods and services. Soddy's economic writings were largely ignored in his time, but would later be applied to the development of biophysical economics and ecological economics and also bioeconomics in the late 20th century.[131]
Issues like central bank independence, central bank policies and rhetoric in central bank governors discourse or the premises of macroeconomic policies[132] (monetary and fiscal policy) of the States, are focus of contention and criticism.[133][134][135][136] Deirdre McCloskey, a longstanding critic of economics, claims that her criticisms have gone largely unheard over the years,[137] although her contention is controversial.[138]

Criticism of assumptions
Economics has been subject to criticism that it relies on unrealistic, unverifiable, or highly simplified assumptions. Regardless of whether they are mathematical assumptions, examples include the assumption of perfect information, with its corollaries of profit maximization and rational choices.[139] [140][141]
Mainstream economics is often criticized by heterodox economics, as well as some within the mainstream community, for its focus on formalized mathematical theorems and technique over content, and its relative lack of attention to institutions, uncertainty, and real world problems.[142][143] Heterodox schools have emphasized unquantifiable Knightian uncertainty, imperfect information, social institutions, and the enormous complexity of economic systems and agents. Although much of the most groundbreaking economic research in history involved concepts rather than math, today it is nearly impossible to publish a non-mathematical paper in top economic journals.[144] Disillusionment on the part of some students with neoclassical economics led to the post-autistic economics movement, which began in France in 2000.
David Colander, an advocate of complexity economics, has also commented critically on the mathematical methods of economics, which he associates with the MIT approach to economics, as opposed to the Chicago approach (although he also states that the Chicago school can no longer be called intuitive). He believes that the policy recommendations following from Chicago's intuitive approach had something to do with the decline of intuitive economics. He notes that he has encountered colleagues who have outright refused to discuss interesting economics without a formal model, and he believes that the models can sometimes restrict intuition.[145] More recently, however, he has written that heterodox economics, which generally takes a more intuitive approach, needs to ally with mathematicians and become more mathematical.[91] "Mainstream economics is a formal modeling field", he writes, and what is needed is not less math but higher levels of math. He notes that some of the topics highlighted by heterodox economists, such as the importance of institutions or uncertainty, are now being studied in the mainstream through mathematical models without mention of the work done by the heterodox economists. New institutional economics, for example, examines institutions mathematically without much relation to the largely heterodox field of institutional economics.
In his 1974 Nobel Prize lecture, Friedrich Hayek, known for his close association to the heterodox school of Austrian economics, attributed policy failures in economic advising to an uncritical and unscientific propensity to imitate mathematical procedures used in the physical sciences. He argued that even much-studied economic phenomena, such as labor-market unemployment, are inherently more complex than their counterparts in the physical sciences where such methods were earlier formed. Similarly, theory and data are often very imprecise and lend themselves only to the direction of a change needed, not its size.[146] In part because of criticism, economics has undergone a thorough cumulative formalization and elaboration of concepts and methods since the 1940s, some of which have been toward application of the hypothetico-deductive method to explain real-world phenomena.[147]
Source : Wikipedia.org