On math and economics — a feeble-minded pseudo debate

24 May, 2014 at 14:45 | Posted in Economics | 8 Comments

Many mainstream economists have the unfounded and ridiculous idea that because heterodox people like yours truly often criticize the application of mathematics in mainstream economics, we are critical of math per se.

I don’t know how many times I’ve been asked to answer this straw-man objection to heterodox economics, but here we go again.

No, there is nothing wrong with mathematics per se.

No, there is nothing wrong with applying mathematics to economics.

Mathematics is one valuable tool among other valuable tools for understanding and explaining things in economics.

What is, however, totally wrong, are the utterly simplistic beliefs that

• “math is the only valid tool”

• “math is always and everywhere self-evidently applicable”

• “math is all that really counts”

• “if it’s not in math, it’s not really economics”

• “almost everything can be adequately understood and analyzed with math”

So — please — let’s have no more of this feeble-minded pseudo debate where heterodox economics is described as simply anti-math!

A common mistake amongst Ph.D. students is to place too much weight on the ability of mathematics to solve an economic problem.  They take a model off the shelf and add a new twist. A model that began as an elegant piece of machinery designed to illustrate a particular economic issue,  goes through five or six amendments from one paper to the next. By the time it reaches the n’th iteration it looks like a dog designed by committee.

amathMathematics doesn’t solve economic problems. Economists solve economic problems. My advice: never formalize a problem with mathematics until you have already figured out the probable answer. Then write a model that formalizes your intuition and beat the mathematics into submission. That last part is where the fun begins because the language of mathematics forces you to make your intuition clear. Sometimes it turns out to be right. Sometimes you will realize your initial guess was mistaken. Always, it is a learning process.

Roger Farmer

Good advice — coming from a professor of economics and fellow of the Econometric Society and research associate of the NBER — well worth following.

8 Comments

  1. “What is, however, totally wrong, is the utterly simplistic belief that math is the only valid tool, that math is always and everywhere self-evidently applicable, that math is all that really counts, that it’s not economics if it’s not in math, that everything can be adequately understood and analyzed with math.”

    But this is also a straw-man argument. The actual argument is that physical reality is to complex to model it without complex math and theories which avoid complex math are probably wrong. Now, this is not a straw-man argument, this is a fact in many fields of science and also in economics.

    Therefore, an untwisting of the apparent straw-man arguments transforms it into a fact. One can take any fact and twist it into a straw-man argument using some fallacious logic.

  2. I’m still baffled why you quote Mr. Farmer at all.
    For example, if Keynes correctly dismissed econometrics back in the late 1930s, then why bother with a Fellow of the Econometric Society? So what if he says something sensible every once in a while?

    • I quote Farmer here because I think he has something interesting to tell us on this subject. If I was only to quote people whom I thought were right on everything or had the same view as me on everything, I’m afraid there wouldn’t be much quoting going on 🙂

      • Saying that: “Mathematics doesn’t solve economic problems. Economists solve economic problems. “ is a fallacious statements because it involves a false dichotomy. Neither side does. It is science that solves problems and specifically falsifiable scientific models invented by and used by scientists. The rest is bad philosophy or worse, straw-man arguments and Farmer commits to one for his own reasons.

      • Thanks for your reply.
        I’m sorry I’m giving you a hard time about Farmer. I just find him intensely irritating, mostly because he still pushes neo-classical/NK policies( no fiscal stimulus, only QE) while sounding like a heterodox economist. Kind of like an inverse Krugman.
        Anyway, for what it’s worth, I really enjoy your reading your blog.

        George Balanchine

      • Also, Mr. Syll, I’m not saying you should only quote people who completely agree with you. For example, Milton Friedman would be interesting to hear from, or Hayek. I just find Farmer a bit bizarre, that’s all.

  3. Do you need fallacious logic to twist facts. Won’t just plain logic do? E.g., I nabbed a cat. The cat was blue. I’m blue, so the cat nabbed me too (he, he)

  4. The economist problem is definition of objectives. Robinson cruzoe economics is irreal and all that is constructed on that is also irreal and falacious. Problem isn’t mathematics. Neoclassics put a elaborated and beauty mathematically construction on inexistent subjects.


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