Why?
Lack of Scientific Rigour in Economics
Economics doesn’t have predicting power (the test of correctness for scientific theories)…
- couldn’t predict recessions
- doesn’t pursue distributive justice
- better for designing economics/social institutions, maintaining social order, or incentivizing individuals in society
This is because in economics the strategy of people are not considered:
parametric agents.
→ In reality, individuals act based on how they think others may act; i.e. they are strategic agents.
→ Conventional economic theory is useless as a predictor—it’ll only satisfy one’s curiosity
→ The correct/better theory for modeling economics is Game Theory—the theory of strategic interactions