Paul Krugman talks about economics. Climate scientists can learn from his insights.

Summary: A new presentation by Nobel Laureate Paul Krugman discusses economics. His insights apply broadly to sciences playing a key role in public policy, especially climate science. Let’s hope others learn from it.


Slide #1 from “What have we learned since 2008“, a presentation by Paul Krugman at CUNY, 19 February 2016. He is discussing economics, but these insights have powerful implications for the public policy about climate science — and the increasing number of other policy issues relying on scientific evidence.

Some annoying propositions:

  1. Complex econometrics never convinces anyone.
  2. “Complex” includes multiple regression.
  3. Natural experiments rule.
  4. But so do surprising predictions that come true.

Economics is a less-mature science than climate science, but is in some ways more developed. Their literature has superior standards for transparency (e.g., requiring archiving of methods and data). More importantly, economics has far more experience working with political decision-makers and the public. So what might be Krugman’s advice to them? We have only his slides, not his transcript; this is my interpretation of them.

“Complex econometrics never convinces anyone.
‘Complex’ includes multiple regression.”

“The criterion of the scientific status of a theory is its falsifiability, or refutability, or testability.”
— Karl Popper in Conjectures and Refutations: The Growth of Scientific Knowledge (1963).

Climate models are complex engineering code analogous to econometric models. Both have a core of hard science on which are built a web of assumptions and approximations. For climate models, their foundation is basic physics but their implementation of physical, chemical, and biological processes are tuned parameterizations.

Models are powerful research tools for scientists, but their use in major public policy debates requires higher standards of validity. Non-scientists have a century of experience evaluating the utility of scientists’ findings on matters where the costs and stakes are high. Our hard-won skepticism about such theories requires observational proof, not just abstruse calculations. For more about the policy use of models see…

“Natural experiments rule.”

“Probably {scientists’} most deeply held values concern predictions: they should be accurate; quantitative predictions are preferable to qualitative ones; whatever the margin of permissible error, it should be consistently satisfied in a given field; and so on.”
— Thomas Kuhn in The Structure of Scientific Revolutions (1962).

There is a common language of evidence between scientists and the public: proof through accurate predictions. Where possible, these are trump in the policy debate, validation that a theory provides a basis on which public policy can be reliably be made.

Oddly, there is little interest by climate scientists in producing these. Instead they prefer increasingly complex hindcasts which prove that models can be tuned to predict the past. This is part of a larger problem. Climate policy has gridlocked in large part due to scientists’ failure in the debate to follow the public’s expectations, such as those described in Robert K. Merton’s famous essay “The Normative Structure of Science” (1942) — or Popper’s insights that theories must be falsifiable (see the hostile comments at Professor Curry’s website).

Scientists’ response to the failure of the policy debate has been to double-down on their intransigence. Such as in the Orwellian-titled “Research integrity: Don’t let transparency damage science” by Stephan Lewandowsky and Dorothy Bishop in Nature, 25 January 2016 — They “explain how the research community should protect its members from harassment, while encouraging the openness that has become essential to science.” It’s folly to expect the public to trust scientists’ findings arrived at in secret processes.

Perhaps worse is this by words of Marcia McNutt: “The time for debate has ended. Action is urgently needed.” She speaks as a senior leader of US science, as editor-in-Chief of Science and the only candidate on the ballot for President of the National Academy of Sciences at their May election (said in the July 3 issue of Science).

“The game of science is, in principle, without end. He who decides one day that scientific statements do not call for any further test, and that they can be regarded as finally verified, retires from the game.

… Those among us who are unwilling to expose their ideas to the hazard of refutation do not take part in the scientific game.”

― Karl Popper in The Logic of Scientific Discovery (1934).

“But so do surprising predictions that come true.”

In a sense, predictions are the milestones in the history of science, both failed predictions that undermined the current dominant paradigm (e.g., the Michelson–Morley experiment) and successful predictions that help establish new paradigms (general relativity’s prediction about the orbit of Mercury).

What are surprising predictions? Karl Popper said they were the strongest kind of evidence…

“Confirmations should count only if they are the result of risky predictions; that is to say, if, unenlightened by the theory in question, we should have expected an event which was incompatible with the theory — an event which would have refuted the theory.”
— Karl Popper in Conjectures and Refutations: The Growth of Scientific Knowledge (1963).

“Risky” or “surprising” predictions are not the only useful kind. Just as predictions are not the only kind of evidence validating theories. Yet they are great value when debating recommendations for large-scale policy decisions about existential threats to the nation or the world.

“Thus an extraordinary claim requires “extraordinary” (meaning stronger than usual) proof.”
— By Marcello Truzzi in “Zetetic Ruminations on Skepticism and Anomalies in Science“, Zetetic Scholar, August 1987. See the text here.

Paul Krugman
Paul Krugman. From Wikimedia Commons.


Krugman gives his conclusions at the end of the presentation…

What is the post-2008 experience trying to tell us?

  1. Liquidity-trap economics passes with flying color.
  2. Fiscal policy effectiveness confirmed.
  3. Monetary iffy at best.
  4. Neo-paleo-Keynesian aggregate supply in short run.
  5. Long run seems to reinforce, not diminish, that case.

He evaluates three theories of economics relative to analysis of the 2008 recession and the recovery: two proved accurate, one far less so. His admission of monetary policy’s “iffy” effectiveness shows remarkable candor, since criticisms of monetary policy (including mine) were long treated as outré by mainstream economists like Krugman.

The last two bullets refer to intramural disputes among economists. See these columns by Krugman about neo-paleo-Keynesian economics: “The Neo-paleo-Keynesian Counter-counter-counterrevolution” and “On the Neo-paleo-Keynesian Phillips Curve“.

Here we see one reason that economics, for all its limitations as an immature science, has become so influential in public policy debates: the willingness of its leaders to frankly assess their findings in the light of experience, and criticize them own work. Krugman and Brad DeLong (Professor of Economics at Berkeley) routinely do so — not just in technical language before their peers, but in easy-to-understand terms for the public at their websites.

This is something rarely seen in climate science, despite the gravity of the policy debate in which it plays such a key role.


Other posts about the climate policy debate

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21 thoughts on “Paul Krugman talks about economics. Climate scientists can learn from his insights.”

  1. I find it interesting. There is an old axiom that from one who has never had success in any scientific analysis every, should not be a reference of explanation for anything. To condense that thought, mankind has never learned anything from an idiot.
    In the world of economics — Jean-Batiste Say, combined with the observations of Nicolais Copernicus — explain economics in reality. The fallacy of monetary policy, and fiscal intrusion to markets are an illusion. It is from such illusions, creating these results accelerating the problems of enterprise, and thus destroying the economic possibilities of a society. To identify it as it really is, communism as a form of economic control is perfect. For it has never worked and they are never wrong.
    Climate change is dealing with some illusion that some .03 of 1% of the gasses in the atmosphere are creating some hallucination of changing climate. Again like communism, it is only some hallucination — and as so many other ideologies of man, such as evolutiopn — with this false foundation, the whole concept becomes corrupt,
    Immanuel Kant identified that man likes to make designs for tomorrow, while never looking at the foundations of the problem. Both monetary manipulation, stealing wealth through such, bu government, and climate manipulation have one and only one purpose. That purpose, as in so many things making man’s existence worse is to give more power to the state, the citizens be damned.

  2. In Physics, long ago, the basic assumptions that form the starting points for math analysis were established. For example the no slip boundary condition for fluids states that all velocities are zero at a solid surface. There are classic papers by Euler and Lagrange debating these issues. These assumptions really matter so if there is valid disagreement on these you really have to stop there and hash out these issues. Proceeding to the modeling stage is nuts if you still disagree on the assumptions.

    It’s like having a mass conserved school and a non mass conserved school of Physics with their own journals and predictions, yet this is actually happening in Economics. It speaks volumes about the current state of infancy of these disciplines. The fact they no longer grapple with the starting assumptions but have moved on to persue competing models is just nutty behavior. The intellectual equivalent of taking your marbles and going home.

    1. In Physics we group our model equations into three categories. You have governing equations; conservation laws like Newtons laws of motion. You have constitutive equations that set parameters describing material properties: strength, ductility, compressibility, and so on. And you have boundary data: initial values, bounding surfaces, and specified behaviors at those boundaries: an impulse at T=0. no slip at a pipe wall, etc.
      We don’t generally argue about the validity of this approach, or the validity of the equations. We just build the models this accepted way and then compare with experiment. If there is disagreement we don’t question the approach. We examine the assumptions, parameter values, boundary conditions, or, if the resulting model equations are nonlinear, we acknowledge there may be multiple solutions and the unstable ones we have found are not the stable ones we see. We don’t go at each other’s throats calling names and impugning ulterior motives. That would be considered very bad form. As an outsider to both economics and climate this is what I see as an important difference in culture. I think there was more of this in the beginning for Physics. There were documented knife fights among the Bernouli brothers.

      1. Peter,

        Such things are commonplaces in the history of science, even if you have not seen them. They occur during challenges to the ruling paradigm.

        See how Einstein was treated by physicists (he didn’t get the Novel for Relativity, since that was too contraversial). More recently, see how the medical profession treated Barry Marshall after his discovery of a successful treatment for peptic ulcers in 1982. He got the Nobel in 2005, after decades of criticism (albeit milder than Einstein’s).

  3. If there is one quote which should have disqualified any candidate from becoming the President of the National Academy of Sciences – this would be it:

    “The time for debate has ended. Action is urgently needed”
    — words of Marcia McNutt.

    It´s absurd.

    “The game of science is, in principle, without end. He who decides one day that scientific statements do not call for any further test, and that they can be regarded as finally verified, retires from the game.”
    ― Karl Popper in The Logic of Scientific Discovery (1934).

  4. The failure of climate research is incompetence or unwillingness of the scientific community. More than that, models can never be trusted 100%, since the entire system is so complex that it does not behave twice the same way. Models can’t take into account all the possible variables that may exist, so they are not the most trusted instruments in analyzing climate change. Here are some more facts I’ve found on this subject:

    1. smamrver,

      I don’t understand what you are attempting to say.

      “The failure of climate research is incompetence or unwillingness of the scientific community.”

      What failure of research? This post discusses the public policy debate about climate change. That’s screwed-up, but that’s hardly unusual in politics.

      “More than that, models can never be trusted 100%, since the entire system is so complex that it does not behave twice the same way”

      Very few things in life can be trusted 100%, yet we’ve built a complex global high-tech civilization. Most of our high tech, from hydrogen bombs to the New York Stock Exchange is design and run by models.

  5. In other words, I think that instead of spending large amount of money on creating models, preparing conferences like COP21 and so on, we would better analyse the main factors that influence the climate. On our planet, the most important role is played by the ocean; still, I don’t think that we (generally speaking) show enough attention to the ocean and to the way that out influence over the ocean can play a role in climate change.

    1. Smanarvar,

      Re: your answer to my question “What failure of climate science research?”

      You are misinformed. COP21 is not a failure of climate research, or even run by any climate science institutions. It is latest in a series of conferences run by governments under the aegis of the UN.

      It is easy to mock international diplomacy, but these cumbersome processes are the only known way to get anything done in a world of sovereign nations. The only alternative is war, which we have had plenty of in history.

  6. COP21 is unthinkable without IPCC, and IPCC is the leading international body for the assessment of climate change. It was established by the United Nations Environment Programme (UNEP) and the World Meteorological Organization (WMO), and open to all member countries of the United Nations (UN). IPCC-Reports are the basis for international diplomacy on climate matters, and in my view a grand failure, which is – for example – highlighted by the fact that climate research is blind on what happened in the first winter of WWII and about Adolf Hitler’s responsibility in regard of the climate change matters during and since winter 1939/40’ : , a comment outlining i.a. that: “Adolf Hitler’s personal guilt concerning the most pronounce climatic shift since the early 19th Century is not the point of concern, but the ignorance and unwillingness to establish in a clear scientific manner the reasons for the winter conditions 1939/40 and thereafter. As science has had seven decades to shed light on WWII impact on climate change matters, which would be evidently a man-made cause, it seems meanwhile a serious competence issue.”

    1. smamarver,

      (1) I suggest you re-read my previous reply to you. If you are replying to it, you’ve really missed the point.

      (2) “the fact that climate research is blind on”

      You can disagree with climate scientists (although I doubt you are qualified to do so), but this shows you have no idea what you are talking about.

  7. Maybe my comment was not clear enough but the reference link is: “In mid-January 2016 the Journal Scientific American run a story: “Ask the Experts: Is El Niño to Blame for So Much Weird Weather?” were Mark Fischetti…… claims that “the whole atmospheric system is so complicated that it never changes in the same way”. If that is the case, why paying for climate research? Obviously Fischetti does not know that the entire weather system is run by the laws of physics. Whether it is easy to understand, or difficult to analyze, the laws of physics determine the state of weather.” The link explains with regards to two El Nino winters explicitly in what respect “The failure of climate research is incompetence or unwillingness of the scientific community.” I hope that clarifies my comments a bit.

    1. smamarver,

      “Obviously Fischetti does not know that the entire weather system is run by the laws of physics.”

      Too dumb to respond to. I’ve been nice about this, but your comments display wildly excessive self-confidence and near-zero knowledge of science. Thank you for posting. Further comments are moderated; only sensible ones will be posted.

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