David Friedman
2010-02-06 18:50:59 UTC
I've shifted this to rec.arts.sf.misc, since the topic has drifted very
far from relevance to either r.a.s.c. or s.h.m.
Constantinople <***@gmail.com> wrote:
...
greatest economists of all, Ricardo, was able to do general equilibrium
theory, I think the first successful attempt, with essentially no formal
mathematics, by the use of an appropriate set of simplifying assumptions.
The problem with the hard-line version of Austrianism--i.e. the idea of
economics as an a priori science--is that you can't get any useful real
world results with reasonable axioms, logic, and nothing else. For one
thing, neither your axioms nor your logic tell you what the individual
utility function is, what objectives rational individuals are pursuing.
If you are completely agnostic about objectives you can get very nearly
any imaginable result--upward sloping demand curves, tariffs or price
control that produce net benefits, or whatever. So doing economics
requires the combination of a logical structure, real world conjectures,
and empirical tests, to see how closely observations fit the predictions.
In that respect it is no different from other sciences, including
climate science.
far from relevance to either r.a.s.c. or s.h.m.
In article
<1357f2db-2b02-4392-b1ed-***@a32g2000yqm.googlegroups.com>,Constantinople <***@gmail.com> wrote:
...
Making him dishonest. However, whether he was innocent or dishonest,
he was was able to do this in part because he was just conveying some
purported historical data. It's trivial to imagine how to falsify such
a thing. Just move the data over by a few years and you're done. There
is no underlying mathematical structure which is bunged up by this
process. In contrast, much of economics has an underlying mathematical
structure which can easily be bunged up if the economist is not
careful in the alterations he makes. It is often the case that an
economist cannot alter one statement without that statement coming
into (easily checkable) logical conflict with several other
statements, requiring that he alter those as well, and so on, in an
ever-expanding cascade of alterations. The mathematical structure is
present whether or not the mathematics has been "translated into
English" (scare quotes) and expressed as a purely verbal argument.
This doesn't fully rule out funny business. A new theory (e.g.
Keynesian macroeconomics?) might be built from the ground up which
suits a certain purpose. It is absolutely possible to use
inappropriate math to make inferences about real-world things. That is
what I understand to be the fundamental critique of the Austrian
economists of mainstream economics, though I side part-ways with the
mainstream economics in that I see that there is often value in
assuming that a cow is a sphere.
"Mainstream economics" makes use of simplifying assumptions. One of thehe was was able to do this in part because he was just conveying some
purported historical data. It's trivial to imagine how to falsify such
a thing. Just move the data over by a few years and you're done. There
is no underlying mathematical structure which is bunged up by this
process. In contrast, much of economics has an underlying mathematical
structure which can easily be bunged up if the economist is not
careful in the alterations he makes. It is often the case that an
economist cannot alter one statement without that statement coming
into (easily checkable) logical conflict with several other
statements, requiring that he alter those as well, and so on, in an
ever-expanding cascade of alterations. The mathematical structure is
present whether or not the mathematics has been "translated into
English" (scare quotes) and expressed as a purely verbal argument.
This doesn't fully rule out funny business. A new theory (e.g.
Keynesian macroeconomics?) might be built from the ground up which
suits a certain purpose. It is absolutely possible to use
inappropriate math to make inferences about real-world things. That is
what I understand to be the fundamental critique of the Austrian
economists of mainstream economics, though I side part-ways with the
mainstream economics in that I see that there is often value in
assuming that a cow is a sphere.
greatest economists of all, Ricardo, was able to do general equilibrium
theory, I think the first successful attempt, with essentially no formal
mathematics, by the use of an appropriate set of simplifying assumptions.
The problem with the hard-line version of Austrianism--i.e. the idea of
economics as an a priori science--is that you can't get any useful real
world results with reasonable axioms, logic, and nothing else. For one
thing, neither your axioms nor your logic tell you what the individual
utility function is, what objectives rational individuals are pursuing.
If you are completely agnostic about objectives you can get very nearly
any imaginable result--upward sloping demand curves, tariffs or price
control that produce net benefits, or whatever. So doing economics
requires the combination of a logical structure, real world conjectures,
and empirical tests, to see how closely observations fit the predictions.
In that respect it is no different from other sciences, including
climate science.
--
http://www.daviddfriedman.com/ http://daviddfriedman.blogspot.com/
Author of
_Future Imperfect: Technology and Freedom in an Uncertain World_,
Cambridge University Press.
http://www.daviddfriedman.com/ http://daviddfriedman.blogspot.com/
Author of
_Future Imperfect: Technology and Freedom in an Uncertain World_,
Cambridge University Press.