Economics Is, Indeed, A Real Thing

Scott Adams asks if economics is a real thing.  My answer is that yes, it is, but that many people don’t really understand what it actually is.  Economics is not predicting what markets will do; economics, properly defined, is the study of human action, of catallactics.  Adams talks about a “newly expanded” definition of economics which “involves studying human behavior as opposed to business and money,” but I would counter by arguing that this is not a new definition at all.  Good economists were studying human behavior for centuries.  I’m not talking about Ludwig von Mises and FA Hayek; I’m talking about Nassau Senior and Richard Cantillon.  To be honest, I think that a study simply of “business and money” is not only a naive interpretation of economics, but economists are not investment advisors.  Actually, every good economist I’ve ever met has said the same thing:  they bet on the market, not on individual participants.  This is because they understand, first of all, that markets are reasonably efficient (even if we don’t all completely buy into Gene Fama’s arguments), and second of all, that economics has never truly been about individual stocks or even prediction; it’s about understanding and analyzing human behavior.