Is Mainstream Economics a Science Bubble?

Abstract

ABSTRACTThis article uses George Soros’ theory of boom–bust cycles to argue that mainstream economics, as built on Samuelson’s Foundations, followed a similar boom-bust cycle. It underwent a reflexive, positive feedback pattern of development before 1980 followed by a reflexive, negative feedback pattern of development after 1980, making it a science bubble. The positive feedback pattern was associated with the ‘misconception’ that when economics is framed as a natural science as per Samuelson, it improves its descriptive capacities as a science; the negative feedback pattern was associated with increasing recognition that this was a ‘misconception’ and the emergence of mainstream economics’ performative ambition—the idea that economics aims to construct the world in its own image rather than describe it. The article discusses how this latter aim is embodied in later game theory, ‘new’ behavioral economics and mechanism-design theory. Yet the vision of economics as a performative science is inconsistent with Samuelson’s natural science model of economics. Thus, mainstream economics turns out to be a science bubble much like many other mistaken, superseded research programs in the history of science.