It’s “Quotes out of context” day today. Here’s a couple of interesting quotes by prominent economists that I came across in a blog-post I stumbled onto. None of them really say anything factually wrong, but they seem (out of context, at least) indicative of an attitude valuing logically correct, sophisticated and elegant mathematical systems over pragmatically useful and informative, well-supported theories about the world. One danger of this is that if we use the word “economic theories” about both logical systems and theories-of-the-world, and if we also say that logical systems are correct or true when they are logically consistent and valued by economists, then it is only a small slip of the mind before we allow our views of the world to be colored and influenced by the logical systems that have yet to be related to reality.
There’s one by Samuelson:
Nobel Prizewinner Paul Samuelson's conclusion in his famous 1939 article on "The Gains from International Trade":
"In pointing out the consequences of a set of abstract assumptions, one need not be committed unduly as to the relation between reality and these assumptions."
This attitude did not deter him from drawing policy conclusions affecting the material world in which real people live.
And one from
the textbook Microeconomics by William Vickery, winner of the 1997 Nobel Economics Prize:
"Economic theory proper, indeed, is nothing more than a system of logical relations between certain sets of assumptions and the conclusions derived from them... The validity of a theory proper does not depend on the correspondence or lack of it between the assumptions of the theory or its conclusions and observations in the real world. A theory as an internally consistent system is valid if the conclusions follow logically from its premises, and the fact that neither the premises nor the conclusions correspond to reality may show that the theory is not very useful, but does not invalidate it. In any pure theory, all propositions are essentially tautological, in the sense that the results are implicit in the assumptions made."