Here is a post from another blog.
The blog's title describes my current stance on economics.
I am a rationalist. I believe in reason. I believe in science. I believe in the scientific method.
But statistics is not science. Economics is not science. Calculus and a special kind of statistics (econometrics) does turn philosophy into science.
Rigor can be overrated. Making something more difficult than it can be is the opposite of science. A basic premise of science is parsimony. Alfred Marshall threw this out of the window. Economics has not recovered.
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4 comments:
At some point I think we should actually read what Marshall wrote before we crucify him too badly. From my understanding, most of the mathematical rigor that he is so famous for introducing were footnotes in the text and nothing more. Is Marshall to blame for turning economics into applied mathematics, or are subsequent economists idiots for making a field out of footnotes?
Of course, Marshall's students deserve blame.
But Marshall is still the scapegoat for pushing economics away from reality and into supply and demand functions.
What Marshall and his followers have done is to take God/human ingenuity/uncertainty out of economics. How can you put a tsunami into a function, into a demand curve? How can you model global warming or prohibition? How can you model a rich man who marries a gold digger?
Marshall ran the great minds of Britain and the United States away from economics. Of course I am scapegoating him. But he deserves it.
Really Sam has a fine positive point, but it is of no normative value.
What was the blog I linked to again?
A comment of no normative value? To crucify Marshall as a scapegoat for removing reality from economics is to simplify beyond the pale. Even worse would be doing so without actually reading what he wrote and knowing what to attribute to his own shortcomings and those of his students. I expect more of a search for the Truth from you. Keynes was perhaps one of Marshall's most famous students and I think you would be hard pressed to say that he was far removed from reality. Disagree with him, say that he was incorrect, but you can't accuse Keynes of being in an imaginary world of numbers without people. If you want to talk about where economics went wrong then please do so, but be accurate in your description. I think if you are looking for a scapegoat you have already lost. Scapegoats have nothing to do with Truth.
This is a stupid argument. I hope GGM or Jeff tells us how stupid it is. My first reply was stupid, and this one will be stupider. But...
I do not have time to read Marshall. It would be foolish for me to even attempt it. I am sure he has been copied in every principles book produced.
We have to make generalizations. We cannot read every book. We should not read every book. I know Marshall did some good things, but I am not going to hell by blaming him for neo-classical economics.
For the record Keynes had no grasp of reality. Think about how unrealistic "priming the pump" with government spending is. Government cannot create jobs without productive investments. Where are government's incentives to make productive investments? Think about simplyifying the macroeconomy into an aggregate demand curve. Just because he influenced policy does not mean his economic thinking was realistic.
My 'it has no normative value' comment referred to you not discussing whether there is too much positivism in economics. I could not care less about Marshall's historical signifiance.
This is my problem. I cannot communicate with people. This whole debate has been on two different planes. I am speaking about an idea that has no answer. You are speaking about a different idea that has a clear answer.
To find your answer all one has to do is read Marshall. You could read every book ever written and not find my answer.
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