Economists — smart but not wise

1 June, 2015 at 23:18 | Posted in Economics | Comments Off on Economists — smart but not wise

While our ability to theorize about social systems has always been vast, the set of tools available for pursuing these theories has often constrained our theoretical dreams either implicitly or explicitly. Smith faced few limits while writing about the complexity of the world around him, whereas Arrow and Debreu’s existence proof required a much more constrained view of social behavior. Often, tools get mistaken for theories with unfortunate consequences; elaborate computer programs (perhaps with lovely graphics) or mathematical derivations are occasionally assumed to make a real scientific statement, regardless of their scientific underpinnings. k8429Indeed, entire literatures have undergone successive refinements and scientific degradation, during each generation of which the original theoretical notions driving the investigation are crowded out by an increasing focus on tool adeptness. This often results in science that is “smart but not wise.”

Using traditional tools, social scientists have often been constrained to model systems in odd ways. Thus, existing models focus on fairly static, homogeneous situations composed of either very few or infinitely many agents (each of whom is either extremely inept or remarkably prescient) that must confront a world in which time and space matter little. Of course, such simplicity in science is a virtue, as long as the simplifications are the right ones. Yet, it seems as though the world we wish to know lies somewhere in between these extremes …

Having the ability to investigate new theoretical worlds obviously does not imply any kind of scientific necessity or validity— these must be earned by carefully considering the ability of the new models to help us understand and predict the questions that we hold most dear.

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