"Words ought to be a little wild, for they are the assault of thoughts on the unthinking" - JMK
- Paul Krugman with good thoughts on David Hume. Krugman highlights a quote of Hume's that I really like. Hume critiques people that latch onto singular explanations of the world: "I have long entertained a suspicion, with regard to the decisions of philosophers upon all subjects, and found in myself a greater inclination to dispute, than assent to their conclusions. There is one mistake, to which they seem liable, almost without exception; they confine too much their principles, and make no account of that vast variety, which nature has so much affected in all her operations. When a philosopher has once laid hold of a favourite principle, which perhaps accounts for many natural effects, he extends the same principle over the whole creation, and reduces to it every phænomenon, though by the most violent and absurd reasoning." Ironically, of all the people I find myself largely in agreement with, I think Krugman is the most guilty of this problem. Sometimes I think that's strategic. Krugman is not an insular thinker at all, but in the position that we find ourselves he feels the need to hit the fiscal policy in a liquidity trap point hard. It's not something that he's been parroting year after year after year. When the facts change, he changes his mind. So I can somewhat understand his singular focus. But the point is, in a complex system lots of processes are occuring at once and anyone who claims that there's only one explanation or one interesting process is fooling themselves.
- Noahpinion cheers Shiller and Mankiw for defending economics as a science and for defending the idea of humility in science. I cheer them too on this. Noahpinion writes: "It seems to me that all too few economists view their field the way natural scientists do their own - as a potential tool for understanding and mastering the Universe. Plenty of economists value models that are "interesting" or "thought-provoking," that tell "good stories," or that have a priori plausible assumptions. That is how journalism or philosophy works, but it is not how Science works. So it is extremely gratifying and refreshing to hear leading economists stick up for two of the key elements of science: observation and doubt."
- The blogger "Lord Keynes" asks "why are so many economists wrong?" I'm a little curious about why he thinks so many economists are wrong. Certainly there are open questions - "what will fiscal or monetary policy do to the economy?" is one of them. There are open questions in any science. There is real division over that question (although considerably broader agreement on monetary policy). But in terms of understanding how the economy works I'm not sure "so many economists are wrong" - incomplete and still learning perhaps, but not blatantly wrong. This sort of fatalistic view that economics is in some hopeless position is really disconcerting - and it's especially prominent among heterodox commenters, like LK or Russ Roberts. We have a very good understanding of the economy and we have more predictive powers than other sciences of complex phenomena. What we've run across is a rare event which we have had little opportunity to study, so certainly we don't understand it as well. One should not infer from the puzzling over the last two or three years that somehow the science itself is adrift.
1 hour ago