"The thermodynamicist Wilson taught a seminar on mathematical economics that autumn of 1935, an outgrowth of his attempt to reform the field. Only four students enrolled - Abram Bergson, Sidney Alexander, Joseph Schumpeter, and Samuelson. Samuelson immediately began translating into math the economics he had brought with him from Chicago. "A student who studied only one science would be less likely to recognize what belonged to logic rather than to the nature of things," he recalled later. "One of the most joyful moments of my life was when I was led by E.B. Wilson's exposition of Gibbsonian thermodynamics to infer an eternal truth that was independent of its physics or economics exemplification."
- David Warsh, Knowledge and the Wealth of Nations, p. 116
Of course, anyone really dedicated to the scientism critique is probably going to read this as catching Samuelson red handed. The point is that the narrative is usually "Samuelson borrowed a trick from physics to make economics tractable". That's not the case at all - Samuelson recognized that behavior of systems under constraints would have common characteristics.
Samuelson argued that people who haven't studied physics and economics might be tempted to think that the math was intrinsic to physics. He noted that that was not the case. The math was independent of physics. Mathematical economics is just a language for talking about economics, like literary economics is. And you can use math to describe processes in physics and economics in the same way that you can use Chinese or German to describe processes in both physics and economics.
The truth of the process that the math of thermodynamics describes is independent of any particular applications in economics or physics.
Another way of putting it is that in an alternate universe we could just as easily have had economics as the first science to apply constrained optimization and then have physics pick it up later.
Math is a language.
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On the Warsh book in general - I'm about halfway through. It's very good. It offers a lot more than what the blurb suggests. It's really a history of all of economic thought - not just endogenous growth theory. It is like a modern Worldly Philosophers sans Marx and Veblen. That was not what I expected, but it was a pleasant surprise.
Unfortunately, the framing of the history of economic thought is very teleological. Everything is presented as being Adam Smith's leftover problems being fulfilled in the work of Paul Romer. I think htis is a bad way to look at it, but I suppose it makes for a compelling narrative to people. (btw - I felt that the real Smithians today are Arrow, Stiglitz, Romer, and Krugman for a while - but reading Warsh has been a nice reinforcement of that view!).
I like very much how he brings the social context of these thinkers into the book.
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Well, framing it that way is how any paradigmatic science would work; though I tend to think of economics as pre-paradigmatic.
ReplyDeleteWhy? If you go through the usual checklist for paradigmatic science, economics seems to hit all the bases. Why is it pre-paradigmatic?
DeleteSeems like a lack of consensus for one thing.
DeleteDon't mistake the blogosphere for the profession!
DeleteSelected lack of consensus... like fiscal policy... are (1.) overdramatized, and (2.) more comparable to cases like string theory. I would not call physics pre-paradigmatic because of some legitimately tough questions associated with string theory!
There is a lot of consensus in economics.
Well, let's put it this way, when it comes to business cycles (the heart of macroeconomics presumably) there appears to be no consensus. In that way there seems to be a lack of consensus. Kuhn's point being that in a paradigmatic discipline the paradigm allows practitioners to simply take whatever the paradigm is for granted.
DeleteAdmittedly it has been about ten years since I read Kuhn and you could accuse me of being prone to outsider bias.
DeleteFYI: As Kuehn would prolly argue*, this whole questioning of methods, etc. (throwing about claims of scientism, etc.) is exactly what you'd expect in a pre-paradigmatic science.
ReplyDelete*In fact, I am quite certain that he makes this very point about the early periods of any science.
Whoops, Kuhn.
DeleteRight, but the people who throw out scientism accusations are really marginal.
DeleteAgain - don't mistake the economics blogosphere for the economics profession. I enjoy talking about this issue, but it's not a major issue.
Daniel should read Philip Mirowski - at least his book More Heat Than Light. Mirowski also has a good, negative review of Warsh's book.
ReplyDeleteI've read Mirowski before - never read a whole book of his, but sections of them. As you might suspect, I don't find him very convincing. But he's definitely a smart, thoughtful guy.
DeleteIn the future - try not to comment anonymously. But thanks for this recommendation.
You are of course right. But the greatest strength of mathematics is also its weakness: it allows you to forget, albeit temporarily, what your variables mean. The moment when you find a very clever mathematical trick is the moment it is imperative to pause and ask yourself whether you might be being a little too clever and to remember that those variables you are manipulating at the speed of thought represent real things. Everyone falls prey to that every once in a while. I doubt economists are immune to this pitfall.
ReplyDeleteYep. You really need both. I am skeptical of theories that are missing either the math or the literary exposition. Not that everyone needs to do both. Some people are good at math and some people are good at prose. But a body of theory ought to have both to offer.
DeleteAlso, math (especially more complicated math) is a very clear and very precise way to speak to very few people. Focusing too much on the mathematics shuts out of the conversation anyone who isn't as good as you are at math. And the more complex your math is, the fewer people are going to be able to check your work while simultaneously, the greater is the chance that you'll mess up somewhere. That's a bad combo. Having the literary alongside can really help alleviate those problems.
DeleteThere is a similar phenomena in software engineering. Debugging is harder than writing code. So if you are as clever as you can be when you write your code, you won't be clever enough to debug it when a bug comes up. Never be as clever as you can be, because if you mess up, you won't be able to see that you messed up.
Samuelson is quite right that correct mathematics remains correct whether or not it applies to the real world in the way someone theorised. That means the correctness of applying things like Gibb's statistical mechanics to physics is separate from the correctness of applying it to economics. In both cases the underlying elements fit.
ReplyDeleteBut, Samuelson used thermodynamic analogies in his writings. Did he try to find out if the problems he was looking at really fit into the underlying assumptions of thermodynamics. I don't think he really did. Some would say that was Scientism (Joe Salerno has said that, for example), but I think it was more a sort of mathematical flourish. It was something there to suggest things, to get people thinking and to prove how clever he was, it wasn't real theory. That said, it's easy to see why people have problems with things like this.