Friday, October 19, 2012

Yes and Noah


Out here in the blogosphere, it is common to hear things like the following:

1. "Economics doesn't work; it has no practical applications."

2. "Economic will never discover any stable scientific laws, because human behavior changes."

3. "Economics shouldn't use math, because math can't describe human behavior."

4. "Economics is not a science."

Yeah, but you won't hear that from me.


RELATED POST: Tom at Mike Norman Economics.


Jerry said...

I think it's plausible for it to be a science, but that most "practitioners" aren't really trying to figure out how it works... instead, they're trying to use it to provide plausible-sounding excuses for enacting policy that benefits their buddies. That doesn't tend to happen in physics. heh. (Well, maybe it used to - the geocentric solar system might be something like that. But it's more philosophically advantageous than financially.)

I wonder if maybe economics just needs a "killer app" to demonstrate that understanding how it works is worthwhile. (e.g. in 1945, i imagine that a lot of people realized that getting the right answer in physics has more effective consequences than getting an answer that you like.)

I would have thought that the new deal was that "killer app", but apparently only about half of economists think that. Maybe it just happened too long ago and people are starting to forget that it was important. That seems to be the case with physics, too.

Tom Hickey said...

Evidence, please.

Hint: "Complex adaptive systems"

The Arthurian said...

Oh, good answer Tom! (You too, Jerry.)

At Wikipedia: Complex adaptive system the first two things I see grab my attention:

1. This article is incomplete.
(My take is that the understanding of such systems is incomplete.) And

2. They are complex; in that they are dynamic networks of interactions, and their relationships are not aggregations of the individual static entities.
(My take is that the economy is not simply an aggregation of individuals.)

Jazzbumpa said...

4. "Economics is not a science."
Yeah, but you won't hear that from me.

You'll certiaily hear it from me. There are two problems.

First, economics is inextricably co-mingled with politics, and therefore facts, data and logic become at best selectively operative.

Second, human nature doesn't change, but circumstances do. The math wold have to involve something along the lines of Hari Seldon's psychohistory modified by chaos theory.

In physics, there is no robust solution to the three body problem.

In economics the number of actors is conservatively in the tens of thousands.

The math is simply unworkable.