Science and Economics

• Science and Economics
• Economics as a field of science and as a social science.
• A scientist tries to understand the world we live
  • To understand the world means the ability to predict and control the world around us.
• Economics as a social science, tries to understand human behavior, i.e, economists try to gain the ability to predict and control human behavior
•  A positive Statement is a statement of fact or a hypothesis that can be tested
  • Hypothesis take the form of if/then statements and can be tested 
  • Positive statements can be true or false
•  A normative statement is a value judgment that a certain state of the world is good or bad
• Science, including economics, involves discovering positive statements about human behavior – specifically those that allow us to control and predict human behavior

• Positive Statement ( Fact or If A then B)
  • The desk is brown (fact)
  •  Free contraception reduces the number of abortions (if A then B)
  • The positive statement can be tested and find out if it is true or false
  • Requiring government issued ID to vote reduces black voter turnout ( if A then B)
  • Positive statement containing a testable hypothesis that can be proven whether they are true or false
• Normative Statements
  • The brown desk looks bad
  • Abortion is murder.  (Whether abortion is murder is a matter of opinion)
  • Higher black voter turnount is bad.  (These are all value judgments

Hard Sciences: Examples

• Chemistry and Physics are sciences
  • The “laws of physics” can be used to make positive statements about the behavior of the physical universe.
    • A basic understanding of the laws of physics allows gross control over the physical universe.
    • A deeper understanding of the laws of physics allows a more powerful, finer, and more detailed control over the physical universe.
    • Examples of positive statements from Chemistry: NH4NO3 (Ammonium Nitrate)
    • One of the primary uses of ammonium nitrate is fertilizer.  If you apply ammonium nitrate, it supercharges the growth of plants, allowing to grow faster and quicker.  Without ammonium nitrate, humans could not grow plans to feed the world.  
    • A positive statement is if you apply ammonium nitrate to crops, you are going to grow more food.
    • Example of positive statements from Physics NH4NO3
    • If you can release those oxygen, you can blow things up.  Use of ammonium nitrate to blow things up
    • They mix the ammonium nitrate which contains oxygen with a readily available fuel like gasoline, diesel fuel or jet fuel
    • Ammonium nitrate is used in mining because it is cheap to make.  
    • If you combine ammonium nitrate with some form of fuel and apply fire or electrical charge, then you are going to make an explosion (if A then B)
    • Was attempting to blow up the World Trade Center evil? Is it good or bad? (normative statement which cannot be determined by science)  Science is not about making normative statements only positive statements.
    • Once you study science and being to predict and control the world, you can do a lot of things to change the world

The World in Which We Live

• As social scientists, what aspects of the human condition we most like to understand, i.e., predict and control
• Economics is a social science that seeks to understand human behavior’
• Fortuitouy, the application of the simplest, most basic, but also most powerful and central of economic principles to the most intellectually interesting questions regarding human behavior yields tremendous insight and understanding