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Economists saving the world …

January 17, 2020 Leave a comment Go to comments

from Lars Syll

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  1. Yoshinori Shiozawa
    January 17, 2020 at 4:08 pm
    Reply

    There is no rational argument in this picture. Does Lars Syll approve the appeal to people’s math phobia in order to degrade peoples’s image of economics? It is no sane methodology nor philosophy. As a philosopher of economics, it is already a defeat of Lasr Syll’s side.

    • Meta Capitalism
      January 18, 2020 at 10:13 am
      Reply

      Lar’s arguments have nothing to do with math phobia and Shiozawa just reveals his own ignorant dogmatism parroting this stupid canard. What an intellectual parrot he proves himself to be.

  2. Helen Sakho
    January 17, 2020 at 11:39 pm
    Reply

    Yes, this is really scary stuff, particularly in view of the fact that it means almost nothing!

  3. Geoff Davies
    January 18, 2020 at 1:03 am
    Reply

    Like. Thanks Lars.

  4. davetaylor1
    January 18, 2020 at 9:58 am
    Reply

    With Geoff. As I see it, it is perfectly rational to challenge economists for clinging to their mathematics rather than looking at the real world. What is sad is to see Yoshinori refusing the challenge and Helen not even seeing it.

  5. Helen Sakho
    January 18, 2020 at 9:33 pm
    Reply

    Real issues facing the REAL world are hardly discussed here. That is what is truly sad. It may well be that people like myself (and Yoshinori perhaps) do not share the same sense of humour with some other colleagues here. I am, of course, speaking on my own behalf only. Whether we are right or wrong, there is absolutely no need to call anyone ignorant or anything similar.

    • davetaylor1
      January 19, 2020 at 9:40 am
      Reply

      Helen, apologies if we are at cross purposes interpreting “not even seeing it”. I meant the challenge in the joke, and of course I agree with you about the challenges posed by real issues facing the real world, although folk “looking the other way” is one of them.

  6. Craig
    January 18, 2020 at 9:52 pm
    Reply

    An open, curious, congenial and genuinely willing to look mind…is one’s best chance at perceiving something truly different and insightful.

  7. Helen Sakho
    January 18, 2020 at 10:26 pm
    Reply

    Agreed.

  8. Yoshinori Shiozawa
    January 19, 2020 at 2:17 am
    Reply

    Craig, open discussion is welcome and necessary. However, the discussion must be made with decency and reason. We must have a sane spirit of self-doubt. Certain level of argument quality is also required.

  9. Jamie
    January 19, 2020 at 12:11 pm
    Reply

    The cartoon is amusing and of course divisively so; but that surely tells us something doesn’t it?

    Anyone interested in economy for the purposes of human well being must be evidence oriented, and cannot work effectively without theory regarding how the world works.

    As Lars has pointed out many times, many economists lack adequate theory and have a reductive sense of what evidence is.

    We have a great deal of inadequate formal theory and (often) highly limited analytical statistics.

    Both tell us things about the world we don’t live in (in world x based on axioms a-z the following pertains; in restricted experiment f we observe y; in model T Y is dependent on… in exactly this place and time (maybe))

    Argument and thus the sociology of knowledge are influenced by these and so “progress” is an odd term in economics…

    Sometimes the problem is maths and so more maths cannot be the answer, nor can mathematical argumentation be the appropriate medium…

    If we are dominated by our maths we are not thinking about its appropriateness…

    • Yoshinori Shiozawa
      January 19, 2020 at 12:43 pm
      Reply

      Jamie,

      >> Sometimes the problem is maths.

      I agree with you on this assertion. However, does it follow from this that “so more maths cannot be the answer.” It is also possible that an appropriate math helps to re-build an alternative to actual mainstream economics. Why do you want to exclude math a priori?
      What kind of tools do you propose instead? Are they proof of bad theorizing?

      • Jamie
        January 19, 2020 at 11:44 pm

        Hello Yoshinori, the statement does not exclude maths a priori
        Sometimes applies to both parts of the sentence and you seem to be missing the point that maths is not always and everywhere the medium and motive force of knowledge, which is what is problematic regarding the discourse under consideration.
        Best wishes, Jamie

      • Yoshinori Shiozawa
        January 20, 2020 at 3:21 am

        Dear Jamie,

        I willingly admit that “maths is not always and everywhere the medium and motive force of knowledge”. But the point is that this acknowledgment does not lead to your claim that follows after “so”.

        I always want a more rational argument (I mean observations based on more reasonable considerations) and not arguments based on sentiments. This is what I wanted to point in my Reply on January 17, 2020 at 4:08 pm.

      • davetaylor1
        January 20, 2020 at 8:10 am

        Dear Yoshinori ,

        Jamie wrote “Sometimes the problem is maths and so more maths cannot be the answer, nor can mathematical argumentation be the appropriate medium…and motive force of knowledge”.

        When the problem in maths arises from thinking that maths is quantitative, i.e. about “more” or “less”, then indeed, more maths is quantitative thinking and logically cannot be the answer.

        When Jamie refers to the medium and motive force of knowledge (i.e. language and co-operative communication), that seems to me very reasonable and not at all sentimental.

        Along those lines, my argument is that economics is not about quantities of objects, it is about motion, and the mathematics of motion is directional (not simply in the sense of backward and forward between more and less) and hence it is complex.

        In the mathematical theories of computing nothing goes wrong. In the real worlds of computing and economics one needs to develop techniques to compensate for side effects, mistakes and misunderstandings, which economists seem very loathe to do. Yet Shannon’s digital information theory and Wiener’s analogue cybernetics have been showing the way since 1948, and PID analysis of control systems since around 1968.

    • Meta Capitalism
      January 20, 2020 at 12:59 am
      Reply

      Of course it is not just “economists [who] lack adequate theory and have a reductive sense of what evidence is.” Pigliucci (<a href="https://motanomics.com/2019/09/04/greedy-reductionism-and-statistical-shadows/&quot; refers to this “reductive sense” as _greedy reductionism_ (aka philosophical reductionism vs. methodological reductionism).

    • Meta Capitalism
      January 20, 2020 at 1:18 am
      Reply

      Of course it is not just “economists [who] lack adequate theory and have a reductive sense of what evidence is.” Pigliucci (2006) refers to this “reductive sense” as _greedy reductionism_ (aka philosophical reductionism vs. methodological reductionism). My apology if this ends up in a double post; my OCD compels me to close the tags correctly ;-)

  10. Ken Zimmerman
    January 27, 2020 at 12:47 pm
    Reply

    A cartoon ran in either WaPo or NYT during the financial crisis of 2007-2008. Entitled, “see no evil…hear no evil…SEC can’t even spell evil,” it depicted three “white old men” at a table. The first wearing a blindfold, the second with ears covered, and the third the Securities and Exchange Commission (SEC). The point of the cartoon is clear. Financial regulators are not and have not done their job correctly, of at all. And who was one of the prime authors of this neglect? Alan Greenspan, an economist. Finance writers often noted that Greenspan railed against entitlement programs like Social Security and described the Dodd-Frank Act as the “worst legislation since Nixon’s wage and price controls of the 1970s.” In a speech before the Economic Club of New York on February 16, 2017, where he accepted the club’s Award for Leadership Excellence, the former Federal Reserve chairman said we “could do away with all financial regulation—almost all of it—if we did one thing, and that is raise the capital requirements of banks.” We didn’t do either, as I suspect Greenspan knew we would not.

    At this point Greenspan and his expansive deregulation of the financial sector had, however, already been humbled. At least as much as the arrogance of a ‘free-markets true believer’ could be humbled. On October 23, 2008, in testimony before Congress, Greenspan responded to questions (some quite blunt and hostile). Greenspan admitted he “made a mistake” in trusting that free markets could regulate themselves without government oversight. Facing fierce criticism for having refused to consider cracking down on credit derivatives, an unchecked market whose excesses to some extent led to the financial crisis of 2007-2008, however Greenspan continued to defend the use of derivatives in general, while telling members of the US House Committee of Government Oversight and Reform that he was “partially” wrong in not having tried to regulate the market for credit-default swaps. But in a tense exchange with Representative Henry Waxman, the California Democrat who chaired the committee till 2015, Greenspan conceded a more serious flaw in his own philosophy that unfettered free markets are the basis of a superior economy. “I made a mistake in presuming that the self-interests of organizations, specifically banks and others, were such as that they were best capable of protecting their own shareholders and their equity in the firms,” Greenspan said. Continuing, Greenspan added: “I have found a flaw [in his free-markets ideology]. I don’t know how significant or permanent it is. But I have been very distressed by that fact.” Waxman pressed the former Fed chair to clarify his words. “In other words, you found that your view of the world, your ideology, was not right, it was not working,” Waxman said. “Absolutely, precisely,” Greenspan replied. “You know, that’s precisely the reason I was shocked, because I have been going for 40 years or more with very considerable evidence that it was working exceptionally well.”

    What is this evidence upon which Greenspan based his strong commitment to free markets? As noted by many on this blog and elsewhere, there seems little evidence upon which Greenspan could draw. And what evidence there is, is both weak and uncertain, at best. Greenspan directed the US economy (financial sector particularly) based more on a political-religious commitment than evidence. Is this an example of economists saving the world? If it is, for myself I prefer economists give up the effort.

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