Friday, May 21, 2010

Truth and beauty in economics

Hans directed me to the following quote from Keynes recently used by Krugman in his blog:

The completeness of the Ricardian victory is something of a curiosity and a mystery.... That it reached conclusions quite different from what the ordinary uninstructed person would expect, added, I suppose, to its intellectual prestige. That its teaching, translated into practice, was austere and often unpalatable, lent it virtue. That it was adapted to carry a vast and consistent logical superstructure, gave it beauty. That it could explain much social injustice and apparent cruelty as an inevitable incident in the scheme of progress, and the attempt to change such things as likely on the whole to do more harm than good, commended it to authority. That it afforded a measure of justification to the free activities of the individual capitalist, attracted to it the support of the dominant social force behind authority.

This inspired me to try a more old-fashioned style in expressing my own views on the matter.

Theories and beliefs are supported by how right they feel to us and how well they survive confrontation with the facts. The first criteria speaks to human cognitive preferences - the desire for parsimonious, consistent and elegant structures that we can "see" how work and that we can admire in their precise beauty. The second criteria speaks to empirical truth, the grudgingly admitted recognition that messy facts and the jumble of a complex world are the stuff that we are, in the final analysis, trying to understand. And when practical difficulties, methodological weaknesses or an implicit cultural agreement free us from the need of confrontations with empirical data, we become even more strongly wedded to pursuing, protecting and promoting the "truths" we believe ourselves so strongly to see.  


I need to start smoking a pipe and use a mechanical typewriter if I’m going to keep on like this.

Tuesday, May 11, 2010

Geographical distribution of scientific claims

Richard Dawkins pokes fun at the geographical distribution of religious faiths, and claims that “we immediately see […] how totally ridiculous that is” when we imagine a world where scientific beliefs were distributed in the same way.


Yeah, cause that would be totally silly. Like if, say, macroeconomists along US coastlines tended to claim totally opposite things from those around the large inland freshwater lakes regarding why depressions occur, whether fiscal policy works, whether markets are efficient, etc. If that’s how things were, you might even suspect that macro-economics wasn’t a science at all, which it obviously is: I mean, come on! They’ve got equations, econometrics and jargon that could confuse an audience more thoroughly than a medieval Pope speaking in Latin and tongues. And the holy trinity has nothing on the representative agent – I mean, forget being three and one at the same time, this dude is all of us!!!

Also fun to note: Prankster Paul Krugman takes Dawkin’s joke and runs with it, cooking up some fanciful story about so-called Freshwater and Saltwater economics in the US here (especially section IV and onward) and here. Nice imagining of an alternative bizarro world there that makes it obvious to all just how far from a religion economics in real life actually is.