Economics has many successes, but the problem is it's trying to approach psychology with math. They know that people are not actually rational, but there is some value in treating them as such.
Approaching with math and large amounts of data are actually really great because you can start to account for variability and the flaws of traditional theoretical economics. Hard part now is determining who is twisting analysis for ideological/power reasons vs. staying true to the data/reality.
The problem is if you look at say home ownership as a balance between the costs of rent vs. loans that works at a very high level. But, second order effects such as decreased earnings from immobility vs pride in home ownership etc get really complicated if you want high fidelity models.
To use an analogy, classical physics is great for building walls, but it does not help you build 5nm transistors.
The bigger problem seems to be that most don't seem to realize they're a branch of psychology. How often have you heard economic talking heads talk about logical fallacies and biases, for example. It's not that what they're doing has no value, it's that they're mostly besides the point.
I hope that 'right', in this context, means that it leads to observationally verifiable predictions of significant real-world events, and not, say, 'makes the math tractable', or 'produces results that conform to the existing tenets of economic theory'.
I would be less skeptical if there were not apparently at least two schools of economists, producing diametrically opposed analyses and recommendations for any situation.
> would be less skeptical if there were not apparently at least two schools of economists, producing diametrically opposed analyses and recommendations for any situation.
What you perceive is large part politics, not academic economics.
The biggest problem I run into with this is that I believe the bounds of rationality for different individuals had far more variability than is accounted for. I suppose it's still useful to look at for a perspective on some things though
Economic models usually look at average behaviour for large groups. There are cases where the model breaks, but jumping into "oh, it was all bs then" is just populism.
There was a serious attempt to push an equivalent of rational choice in political science a while ago. Public choice theory holds that bureaucrats and politicians are rational actors maximising their own power. It's no longer very prominent because it turns out to be a poor fit for actual motivations - which seem to be a complex mix of office politics, power seeking, public service motivation, and following the wishes of their superiors. The model was simply too reductive to be useful.
I'm not an economist, but it would surprise me if a whole society's motivations were not at least as complex as those of a government department.
It's arguable, but the massive decline in global poverty over the last 30 years is arguably the largest. Details are complicated, but things like comparative advantage > free trade seem to have been working.
