Following journalist Greg Ip, Kling categorizes economists into two groups: “ecologists” and “engineers.” The engineers try to “steer” the economy by employing mathematical models as tools. The ecologists, by contrast, are skeptics; they are reluctant to generalize from discrete data sets and mathematical equations. As Friedrich Hayek put it in his Nobel Prize lecture “The Pretense of Knowledge,” these economists are distrustful of the tendency of their discipline to “imitate … the procedures of the brilliantly successful physical sciences.” For this reason, the ecologists are less inclined to try to steer the economy.Indeed. I have elsewhere described human systems (including the economic system) as complex, dynamic, homeostatic, non-linear, chaotic systems. There is much useful knowledge to be acquired about such systems but too often we fail to acknowledge the fragility or limits of that knowledge.
It may not be immediately obvious why economics shouldn’t imitate the physical sciences. Given the remarkable advancement of scientific methods, the processing power of our computers, and the ostensibly boundless sophistication of our mathematical models, we might believe that central bankers, armed with latest economics research, are capable of treating economic infirmities.
But Hayek recognized something few economists understand today: that what we misleadingly call “the economy” is infinitely more complex than any machine or edifice human beings could ever design or build. The economy is in fact a living, changing, moving web of disparate actions and entities, each of which is composed of multiple, subjective judgments and motivations.
This is a difficult notion for economists who have been trained to regard themselves as practitioners of a “hard” science such as physics. The problem is that, unlike physicists, economists can’t come even close to controlling conditions in their laboratory — the economy — making it difficult, if not impossible, to isolate the causes of a given economic outcome. For this reason, Kling argues, economists must rely instead on “hard-to-verify interpretive frameworks.” These are the sets of philosophical ideas and normative claims that inform our judgments about the events we observe.
The ecologist’s skepticism is not global or unqualified; it’s not as though economics is entirely outside the realm of human understanding. The point, rather, is that we can know very little about this infinitely complex thing we call “the economy” at any given time. For that reason, we should hesitate to inflict our ignorance upon it.
I like D'Amato's two classifications and I would elaborate on them. We have descriptive ecologists who wish to understand a complex system and by describing it, hope to improve their predictions by some small margin but who know that whatever they learn has a half-life. We have the prescriptive engineers who think they understand a system without comprehending how complex and chaotic it is and how contingent is the body of knowledge. They think and act as if they know. We also call such prescriptive engineers totalitarians, utopians, authoritarians, Marxists, politicians, ideologues, and advocates.