[A]ll .. economic theories are at least debatable and often highly questionable. Contrary to what professional economists will typically tell you, economics is not a science. All economic theories have underlying political and ethical assumptions, which make it impossible to prove them right or wrong in the way we can with theories in physics or chemistry. This is why there are a dozen or so schools in economics, with their respective strengths and weaknesses, with three varieties for free-market economics alone – classical, neoclassical, and the Austrian.
Given this, it is entirely possible for people who are not professional economists to have sound judgments on economic issues, based on some knowledge of key economic theories and appreciation of the political and ethical assumptions underlying various theories. Very often, the judgments by ordinary citizens may be better than those by professional economists, being more rooted in reality and less narrowly focused.
This is of course very convenient for Ritchie. It means that he can never be wrong. For there is no standard of proof or truth to which he can be held.
Except, of course, there are bits of economics which are indeed science, where we have hard answers.
For example, this Laffer Curve thing. We know that there’s an income effect (raise taxes and people will work more to reach their target income) and a substitution effect (raise taxes and people will work less as working ain’t worth it). We also know that both apply to almost all of us at some time or income level or another. And it’s the interplay between these effects that determines the change in tax collected from a change in tax rates.
It’s true that we then have to guess a little at what the rates are where, in general, a change in tax rates leads to more revenue or less.
However, we do have solid empirical evidence in some parts of this. For example, we know very well that the income effect is much weaker in, the substitution effect much stronger, in married women. We really do know that as a matter of fact. Quite why, well the surmise is easy enough, why not look after your own household at zero tax rather than work, get taxed and pay another to do so? But we do know the fact.
Which means that, just imagine, if a retired accountant were to write a Budget briefing paper for the TUC, arguing that a significant rise in income tax rates would lead to an increase in labour being offered on the market, that increase coming from married women where the income effect would be much stronger than the substitution effect, well, we would know that that retired accountant was, simply and factually, wrong.
And note that our knowledge of why he is wrong does not derive from any theoretical assumptions at all. Only from direct empirical observation. We know that when tax rates go up married women are more likely to withdraw from the labour force rather than working more hours.
Or, even if we are to accept that economics is only partially sciencey in those areas where it is Ritchie is still wrong.