Some people would have us believe that all such decisions boil down to some sort of cost-benefit analysis.
The pro-drilling side would suggest that there is little by way of cost: "America needs energy, and most of the need will be for gasoline, so, with rising prices, the benefit of drilling in ANWR, thereby increasing supply, must trump any costs that exist, anyway." The anti-drilling side has engaged in the discussion more honestly, in my opinion, and it goes beyond whether a bunch of deer die of exposure to industry. We also have to take into account the fact that, by drilling, we would be extending our reliance on oil, which, in the end, is economically -- even ignoring the costs associated with global warming -- stupid.
Also, if a decision was made not to drill, it must be that the economic necessity of drilling just was not there, or was not sufficient. But you said the question could not be decided within economics.
It must be that the gains to drilling were not sufficient to push Americans to support opening ANWR, if the current situation holds, because Americans have, up to now, exercised their rights in pressuring Congress to not allow drilling. That can be looked at in an economic framework, I suppose, but the analysis necessarily spreads into political science, sociology and psychology, because, as I said, we can't compare utility levels clearly across people. I can't say, "Americans who oppose drilling gain a higher level of utility from saving ANWR than Americans who support drilling lose." I can say, "Americans who oppose drilling exercised greater influence over the Congress." Conservatives want live babies so they can raise them to be dead soldiers. - George Carlin
I don't think economics really exists as a separate discipline. I think it exists as a kind of academic cult cursed by delusions of infallibility, but the practical policy foundations are always based on politics, sociology and psychology - with a bit of game theory and statistical analysis at the more rigorous end.
In terms of real-world decision making, I think it really isn't possible to understand economic relationships except in terms of politics, sociology and psychology. They're not footnotes or distractions, they're fundamentals.
Politics obviously plays an enormous role, because governments are enormous actors in the economic arena. Psychology's role is growing -- there is actually a sub-discipline called Economic Psychology, although it's still in its infancy -- because psychologists can help economists develop a stronger understanding of (say) happiness or buying habits or or or.... Sociology and economics have always had a great deal of overlap, and academics from each work together quite often. (My uncle, who is a retired sociologist, is an example.) If I wanted to write a book on Africa's current economic situation, I would likely need to get in touch with someone who understands African culture and politics, because it would shed a great deal more light on the issue for me. Proposed solutions to problems are, obviously, useless if they do not work properly with the cultural and political situation (as when FDR had difficulty pushing Keynesian worker programs in an era of American politicians seeking a consistently-balanced budget).
As far as infallibility is concerned, in any field -- in my experience, at least, and I must admit to having little in the hard sciences (so I'll leave that to Miguel, Colman and anyone else who has said experience) -- you'll find people who take this view of their discipline, but I think you'll find plenty of examples, especially among the big names, of economists who do not believe in the infallibility of economics. In fact, the book Miguel wrote this diary on was one built to challenge a previous failure in the field, as were Friedman's writings on things like the Phillips Curve. Conservatives want live babies so they can raise them to be dead soldiers. - George Carlin
we can't compare utility levels clearly across people. I can't say, "Americans who oppose drilling gain a higher level of utility from saving ANWR than Americans who support drilling lose." I can say, "Americans who oppose drilling exercised greater influence over the Congress."
