House of Paine

mordent from the blog slog

  i really need to start thinking 
               not just typing 

i visited a site just now
that was so Hatfield and Mc Coy 
   i sank to sceptic levels 

    i need to produce something fresh 
and  mountain icy 
right out of  my own head 

  for god's sweet sake 

  " get your snout 
        out of 
     the foaming 
          group - eee  gutter 
                          herr  pinklestein  "


=============================


check out this ships in the night fandango

with me pink as slink
  playing the role of  silly self important oracular  ass ..to the hilt 


As a outsider who genuinely finds econ interesting and sometimes elucidating, I am perplexed by and disappointed with economists' mathematics fetish. Sure, analytical math (calculus, diff eqns, linear algebra, etc) works great in physics, where the systems are relatively well-defined, but in econ, where the systems are much more complex, it is often totally inappropriate, if not downright ridiculous. Is it an intra-field macho pissing contest? "I can solve partial diffential equations. Can you??" Is it an attempt to gain stature with the scientists? I'll admit that statistics is genuinely useful in econ, as it is in medicine,and I'll admit that numeral examples and algebra can be useful in teaching beginners useful concepts, but the deductive mathematics that you see in academic articles sometimes borders on the absurd. 
It suggests a precision that does not exist, and, unfortunately, many people who read economists' writing do not realize how dubious the assumptions often are. I meet every other week with a group of clinical psychologists, where we talk about mutual patients. Once I told them about utility maximization. They fell about the place in laughter. Your field needs much more experimentation and much more humility if you want to be taken seriously by natural scientists.

Posted by: JRossi | May 5, 2006 7:42:24 PM

Well... I took History of Economic Thought as an undergrad, and what I came away with was probably not what you have in mind. 

Utilities. A theory with no predictive value in the real world, but served the very important purpose of providing an alternative to Smith and Ricardo's labor theory of value. After Marx drew such undesirable conclusions from the labor theory of value, a viable alternative became the most important problem in the field (from the capitalist point of view anyways). Since then, too many Nobel prizes have been awarded for incorporating Marshall's utilities into Keynes more useful work for the pointless edifice to be dumped. 

Posted by: Esq. | May 5, 2006 9:14:53 PM

I used to be in the business of editing math and stat textbooks. The economists had a reputation for being better mathematicians than the physicists. The usual explanation was that the physicists could afford to be sloppy because their experimental results would catch errors while the economists, always several fudge factors from raw data, had to rely on formal correctness. 

Posted by: Jim Harrison | May 5, 2006 10:20:43 PM

History of Economic Thought was one of the most fascinating courses I took as undergrad, in that it encouraged debate... questioning assumptions and cross-currents from other disciplines. Is Behaviorial Economics affecting math within Economics papers? Thx Great post!

Posted by: hopton | May 6, 2006 2:25:42 AM

As an ex-chemist, I've always thought Economists look too much to physics and not enough to chemistry for their scientific credibility.

Mathematical model-building is useful, with limits pointed out by other commenters. But most sciences also have a bunch of organizing and classifying principles.

Where is the economists' periodic table?

Posted by: Tom | May 6, 2006 6:38:06 AM

A clever comment, but economics is a social study and closer to biology in philosophy of study or to psychology. Mercury atoms may be the same all over at all times, but leving creatures are always and everywhere singular and distinct.

Posted by: anne | May 6, 2006 6:56:32 AM

History of Thought is "the wrong ideas of dead economists" as Stigler memorably put it.
Much more useful would be Economic History. Meir Kohn says history is economists laboratory. Too bad few economists use it instead of running the millionth regression on time series data from 1959-2005

Posted by: PEmberton | May 6, 2006 6:57:07 AM

"Utilities. A theory with no predictive value in the real world, but served the very important purpose of providing an alternative to Smith and Ricardo's labor theory of value. After Marx drew such undesirable conclusions from the labor theory of value, a viable alternative became the most important problem in the field "

now follow the jevonian revolution one more step

and you find utility theory blowing a hole in the status quo too

with redistribution theory

demin margins and all that 

so utlity became non comparable 

etc etc

the cycle or dialectic continues

never fear 

stglitz has a wondeful paper from the 80's that turns classical market optima on its head

his "english translation"

an interveneing hierarchy can always improve on the welfare results
of spontaneous markets 

read his popular book whither socialism

too much over looked i think
post katrina 


the cult of liberated corporate marketeering 
has led to its opposite

the rediscovery of "the state" 
as social welfare optimizer 
not private rent 
parasite feeder 

Posted by: slink | May 6, 2006 7:07:19 AM

"The economists had a reputation for being better mathematicians than the physicists "

respectfully formal correctness is for table manners

my guess these errors you're writing about
are more like spelling mistakes
then logical howlers 

the key is reversal of analytical results 
besides 
intuition trumps aunt may correctness anyway 

mark mentions very wisely a lack of history in grad school

that goes for the history of science in general 

where how it happened is revealed to by sloppy indeed 
the knock in fact on perhaps the greatest math hack
of the modern era

he wanted to get it exactly right before he published

not optimal to say the least 

Posted by: slink | May 6, 2006 7:18:10 AM

It might be useful to generate a list or typology of things math that does well in the social sciences, and things at which it remains a failure. Scientists are skittish on the subject. Yet it seems they keep coming up against certain kinds of limitations that exist at an almost Kantian level: In mathematics, the fact that calculations are performed dyadically and that general n-body problems are insoluble; or the fact that math doesn't predict newly emergent properties, (even within mathematics,) despite its descriptions of discontinuities in functions. In social science, the fact that "meaning," which is paramount to decision-making, is beyond quantification -- information is not a conserved quantity, it is created, it is duplicated, it is destroyed; and control hierarchies exist not only within society but are formed and dissolved within the structure of thought itself. So we end up with ordinal orderings that fail with the next linkage, in something like the voters' paradox. I think economists ran away with themselves on the hope that "meaning" would somehow become tractable as "value," because some definitions ("utility") receive monetization and therefore quantification. This, I think, puts the cart before the horse. Just look at the long attempts in environmental economics to use contingent valuation to derive some guidance for landscape use! And social scientists hope that computers, by allowing massive and speedy iterization and hierarchical linkage, can amount useful results. But here again, the emergence of new forms seems to be something that happens on top of computers, not something they can be programmed to predict. 

Another problem with mathematics is entirely rhetorical: its control of economics is not total, and the mathematization of economics doesn't confer absolute validity: yet the general public is apt to give it undue respect. Economists who write well and clearly about economics are likely to reveal, not how little they know, because they know a great deal; but rather just how little it applies to circumstance.

Posted by: Lee A. Arnold | May 6, 2006 7:56:09 AM

that first line should read, "things that math does well..." I need my coffee...

Posted by: Lee A. Arnold | May 6, 2006 8:00:04 AM

"History of Thought is "the wrong ideas of dead economists" as Stigler memorably put it.
Much more useful would be Economic History."

as a recent obit mentioned
stigler believed 
commercial ads were informative 

and despite his quip
i'm not sure he called
the history of thought bunk 

just the source of dogmatic sterility 

to me its not a case of facts good thoughts bad 

but who's me asking anyway 


Posted by: slink | May 6, 2006 8:56:25 AM

Last time I looked at a "real" economics journal was nearly twenty years ago, so perhaps things have changed, but what I saw was a bunch of linear partial differential equations attempting to describe real-world systems.

The problem in that is that (to the best of my knowledge) linear partial differential equations can describe only systems that are linear and whose elements show behavior that is both continuous (no camel-back breakage) and reversible (no hysteresis). But that's not the real world.

Also, most economic analysis seems to assume implicitly that what the people making the decisions want is more of conventional economic wealth, and that the people making investments are playing with their own money. But the most influential decision-makers are often more concerned with power and prestige than with wealth. And as we see with Chinese "vendor financing" of our trade deficit by government purchases of securities denominated in a dollar sure someday to be severely devalued, the most influential investors are often playing with other people's money.

One of the most important factors in how the world works is fraud, which can take myriad forms. But how many economic analyses ever take fraud into account?

We have recently seen the introduction of the "dark matter" concept into economic analysis with respect to international capital flows that make no sense according to conventional economic analysis, in an attempt to explain apparently money-losing behavior by hypothesizing the existence of invisible factors that make it in fact profitable. That is like trying to explain Enron or Worldcom by assuming a priori that the companies must have been truly profitable, and that it was some defect of conventional accounting that made us unable to see that.

It is patently obvious that the people currently controlling the US government are willing to perpetrate massive and economically counterproductive fraud in order to increase their power and the wealth of their cronies, and that much of US business is controlled by executives willing to perpetrate counterproductive fraud to line their own pockets. Why do so many observers feel a need to find "dark matter" when the simplest explanation is that foreign governments and businesses are behaving just like ours? If economics were a true science, it would focus much more on such real-world factors that cannot be described by mathematical formulae.

Posted by: jm | May 6, 2006 9:12:47 AM

From the point of view of an amateur outsider, it appears that economics suffers from an inability to decide whether it wants to be an emic or an etic description/explanation of human material life. Sometimes you guys seem to acknowledge that what you're doing is trying to understand a human cultural system (the economy) in its own terms like an anthropologist who takes a tribe's myths seriously. Sometimes you seem to want to devise a sort of thermodynamics of money, which is hard to do since money or, more generally, economic value, doesn't seem to be governed by the kind of conservation laws that makes the basic concepts of physics so susceptible to mathematical formalization. 


Posted by: Jim Harrison | May 6, 2006 11:02:40 AM

jm

i think we all agree economics 
if not easily modeled with differential equations like say
thermo dynamics 
is nevertheless quantitative
lots of us love the stream of biz stats 

its like baseball stats 
and 
the theoretical models 
being built today i find most promising 
use not diffy q greek
but simple plus minus formulas
not un-like
those real commercial/capitalist 
decision makers use themselves 

take a bunch of simple tricks 
power up and program a heavy computation system 
with em

replicate em with variations 
and simulate large numbers of these agents
interacting with each other 

u notice this is more like a model train 

falsely iconic 

lacking the abstraction and austerety 
of the standard 
best fit set of interacting functions 
built up out of 
real number crunching
and measuring 

which is judged by its mindless ability 
to mimic 
parrot like
the real world 

instead of gears and wheels (funtions)
acting out the formality of real agents

we have 
virtual agents 
that are "motivated by various internal maxims "
that make sense to us


however they operate 
within the compass
of their own limited info
and in a marketplace 
full of non transparent firms
creating 
"secondary" uncertainty

a case for 
'bounded rationality' at best 

then what else

well 
you run sim after sim
till the grant money runs out 


do you end up "seeing anything real"???

"not really "
followed by 
the world's most famous next words 
"not yet anyway "

needless to say
its not orthodox 
so the ivy academy 
compares this to a stupid child 
playing with a big powerful toy 

not 
to 
say 
their hallowed 
samuelsonian 1947 magnum o paradigm 

ie 
all math ...higher math ...all the time

and so they confidently scoff 

who's right here ????


well the solution to the four color problem
was a brute too

but it was a proof 
that helped turn around the notion of proof

in ......math itself 

Posted by: slink | May 6, 2006 11:05:06 AM

The 4-Color Proof was a simple proof by enumeration. The novel feature was simply it's enormous size. The parts were all business as usual. Which is not to deny that it raised questions about the nature of proof in mathematics, but the questions in question seem rather far away from my question. Surely what's problematic about mathematical treatments of economic problems (if anything) is not that they rely on brute force methods like the 4-Color Proof. 



Posted by: Jim Harrison | May 6, 2006 11:26:31 AM

I have to disagree with one point that has been made here: I think that the History of Economic Thought is very important, and not necessarily conducive to dogmatic sterility. 

Quite the opposite: it can provide some counterweight to the certainty of contemporary economics. 

More important, the history of thought may be crucial to future developments in the epistemology, or perhaps it should be called "cognitive structure," of science, both physical and biological. Why? Again, because we are still in need of a clear, modern, Aristotelian-style typology of the relations of thought, including both logical inferences and mathematical applications, to real phenomena -- with attempts to categorize both successes AND failures. If cognition is a developing structure, alive, accretive, hysteretic, self-reforming, then the history of thought, particularly scientific thought, is crucial to discerning its "mechanisms." 

Such a typology might lead to invention in symbolism. It may become useful to further discovery, not only in complexity, biology, social science and economics, but in mathematical physics.

Posted by: Lee A. Arnold | May 6, 2006 11:27:54 AM

Jim Harrison 

we seem to be missing each other here 


agreement appears closer then your comments tone implies

"The 4-Color Proof was a simple proof by enumeration. The novel feature was simply it's enormous size. The parts were all business as usual"


indeed and just why i suggested the parallel

and also because at the time 
several important purests 
did not find that
proof pleasing or promising 

i'm suggesting models of the brute simple sort
applied to economics

might now with the availible 
vast computing power
prove more useful then 
the classical analytic theorems 

is this more like the exploration of certain integrations long since thought beyond practical computation 
that are 
now childs play on our bigger machines???

perhaps thats a better parallel 

Posted by: slink | May 6, 2006 12:24:40 PM

"it can provide some counterweight to the certainty of contemporary economics"

agree completely 

Posted by: slink | May 6, 2006 12:34:16 PM

"Sometimes you seem to want to devise a sort of thermodynamics of money, which is hard to do since money or, more generally, economic value, doesn't seem to be governed by the kind of conservation laws that makes the basic concepts of physics so susceptible to mathematical formalization"

game theory was ithink the first attempt to come to grips with what might be called the multi node independent agents
or players 
inherent in an economic system

what kept game theory back

was its pure euclidean notion of rationality 
i'll hazard another parallel :

like perception
as geometric computation 
has proven to need some dirty short cuts 

optimal solutions are too rare and non operational 

the paucity of analytic richness
not even crucial
qualitative stuff
like 
"well will we get more or less "
example

whats the will e coyote point
in a stock bubble 

the notion of a demonstration here seems closer then the idea of a proof 

but non analogue
simulations are indeed something reasonably new 

the monads at the base of a soc system
as opposed to the atoms we postulate 
at the base of a phy system 


Posted by: slink | May 6, 2006 12:45:39 PM

jh

i like your etic /emic dialectic

and indeed the etic of our economies sacred cows
must be " scientifically" emicated 

only once we do that
to our biggest sacred cow 
" free markets"

once we 've learned to see them
for what they are 

we'll have in practice fully sublated them 

Posted by: slink