Astrology has also developed over a couple of millennia.
The fact that some people use astrology to play the markets, and seem to get results that are as good as those of economic theory, says a lot about both.
Economics is entirely a faith-based pseudo-science, which plays the same role in modern culture as the nonsensical theistic "explanations" of the world put out by the Church played in medieval times.
It's a form of political/rhetorical persuasion and social control, with an implied morality that's never seriously questioned. Even if you accept that it's politically descriptive and not politically predictive, it still fails.
It's not a science in any useful way - it simply pretends to be one, because that makes it appear more authoritative.
The real scandal for me is the fact that skeptics and debunkers like the amazing Randi have spent so much time and energy on trivial topics like the paranormal, while leaving the epic intellectual fraud and imposture behind mainstream economic theory unchallenged.
First of all, not a lot of people actually use academic economic theories to "play the markets". Ask a trader how often does (s)he use the General Theory or monetarism in their daily decision making. There are macro-strategies, used mostly by fund managers, but it's not such a big portion of the market.
Secondly, anyone found to use astrology in their market activities would be fired in nanoseconds. Whichever institution. You can do it privately though.
The fact that one can get good results speculating while using astrology as a decision generator (or in fact any other random mechanism, like a monkey throwing darts) is actually known and used in the financial theory. It is called "the random walk hypothesis" and is the foundation of a lot of assumptions. A good introduction to it would be "A Random Walk Down Wall Street" by Burton Malkiel.
So I urge you to actually build an informed opinion before succumbing to an Alex Jones brand of reasoning.
>First of all, not a lot of people actually use academic economic theories
Maybe not, it you don't consider Black-Scholes and it's endless brood of offspring to be serious academic theories.
Not many people use nation-state Keynesian or other big macro policy theories to play the markets - which is a different point.
But it's a relevant different point, because it highlights the political reality of using macro as a hand-wavey excuse for policy which benefits market operators and the owners of the money behind them at the expense of the rest of the population.
>It is called "the random walk hypothesis" and is the foundation of a lot of assumptions.
Quite. Does it not worry you that this is true, or that even with this insight manic-depressive boom-bust behaviour is apparently still considered a feature, not a bug?
>So I urge you to actually build an informed opinion
I suspect my opinion is at least adequately informed. Perhaps you're mistaking being heterodox for being wrong?
The fact that some people use astrology to play the markets, and seem to get results that are as good as those of economic theory, says a lot about both.
So meteorology isn't a real science either, I assume? Having a perfect model doesn't mean you can predict the behaviour of a system; conversely, not being able to predict the behaviour doesn't mean the model is flawed, or non-scientific.
That said, I do agree that economics is taken way too seriously for its incipient state.
Have you seen the documentary on the amazing Randi? It's called an honest liar. It shows that he actively deceived people in order to push his own agenda of what 'truth' is. So I didn't think he was a debunker as much as a persuader.
FYI - I met Randi personally about eleven years ago. He was a wildly charismatic person to talk to. It doesn't show as much when he's on stage or on an interview speaking to an audience.
Nobody believes that markets are strong-form efficient. There is and always will be differences in information between players in the market. It's just a useful way to talk and think about how a market with perfect information would behave. That's why semi-strong and weak form efficiency are usually taught in the same lecture :)
> Doesn't economic theory say that you can't play the market?
That depends which theory; under most that can be taken as even semi-plausibly as models of the real world, no, unless you assert some simplifying assumptions (which then make them no longer semi-plausible models of the real world).
The simplifying assumptions are common in intro-level Econ classes, for the same reason that, e.g., assuming the absence of friction is common in many parts of intro-level Physics classes.
The thing is that we don't have as many people in the public media trying to sell policy using explanations of physics that leverage the fact that most people that know anything about the subject do so through hazily-remembered intro-level classes as we do for economics...
That is not economics in the macro/micro sense, that is more financial/ financial markets theory. It really is a different branch of thinking than what economists deal with.
>The fact that some people use astrology to play the markets, and seem to get results that are as good as those of economic theory, says a lot about both.
Economists hardly ever try to use the results of economics to predict the stock market...in fact economics is the field that has theories that no strategy exists that can beat the market reliably.
Broadly agree, but I don't entirely blame the economists, the politicians need justifications for what they do, and appealing to economics is a great one. Most political movements that have been successful have had some economic backup (eg Friedman and the libertarian right in the 1980s). In practise much of policy is just trying to change stuff using financial incentives, which in many cases has unintended consequences or is too complex.
The fact that some people use astrology to play the markets, and seem to get results that are as good as those of economic theory, says a lot about both.
Economics is entirely a faith-based pseudo-science, which plays the same role in modern culture as the nonsensical theistic "explanations" of the world put out by the Church played in medieval times.
It's a form of political/rhetorical persuasion and social control, with an implied morality that's never seriously questioned. Even if you accept that it's politically descriptive and not politically predictive, it still fails.
It's not a science in any useful way - it simply pretends to be one, because that makes it appear more authoritative.
The real scandal for me is the fact that skeptics and debunkers like the amazing Randi have spent so much time and energy on trivial topics like the paranormal, while leaving the epic intellectual fraud and imposture behind mainstream economic theory unchallenged.