Tuesday, August 01, 2017

On science, climate and economics

Back in 2014 I attended a seminar at the Centre for Independent Studies entitled The Grit in the Oyster: In Praise of Contrary Opinion.

Amongst the contrary opinion that speakers thought were worthy of praise was the proposition that climate change is either not occurring, if it is occurring isn't man made or can't be stopped, or s entirely a scientific hoax.

I drew the panel's attention to the hen recent comment by Steve Keen that it was time for a 'Copernican revolution' in economics - and that heterodox theories in general were worthy of more attention.

This view was, of course, dismissed by those on stage because, they claimed, the truth of neoclassical economics was well established.

That similar crazy views still endure was today demonstrated on the pages of the Australian.

In one column Judith Sloan attacked the whole field of behavioural economics and the insights it offers on the circumstances in which humans don't behave like the 'econs' (to use Thlaer's term) of neo-classical theory.  Most behavioural economists accept the neoclassical model as the accurate theory of markets and seek to correct it for deviations occurring on the surface.

Sloan perhaps realises the far greater threat it poses - that the evidence on framing, sequencing of decisions and other biases means that consumers do not have  single ordering of preferences. Their preferences are perpetually changing on the basis of the events that have just occurred and their expectation of future events. This brings the whole model crashing down.

The second column was by Maurice Newman on his favourite topic - that climate science is a hoax. His reason for the latest foray was the revelation that the Bureau of Meteorology had deleted some recent temperature records for Goulburn. This deletion was for the perfectly rational reason that the measuring device (thermometer) was measuring a temperature (-10.4) outside its calibrated range (minimum -10). The issue for BoM is that being outside the measuring range it has no idea whether the correct reading is -10.4, -10.2, -10.6 or some other reading.

Asking a measuring device to operate outside its range is like asking a person with perfect pitch to identify a note that is four octaves above human hearing range.

Now unfortunately I have to agree with Newman that there is an awful lot of a Kuhnian paradigm at work in climate science - a reinforcing echo chamber that includes some doubtful work. But the stand out challenge for the public in understanding climate science is that it involves a great deal of complexity theory - the weather and climate are complex dynamic systems.  It is a hard field to make definitive statements about.

At core both Sloan and Newman are suffering from the same inability to comprehend complexity.

We all like to joke about the accuracy of weather forecasts - but in reality they are far better at predicting the temperature than economists are at predicting economic growth.