by Don’t study economics if you’re interested in economics! .[embedded content] Steve Keen gives a truthful view of the state of economics today. Modern economics has become increasingly irrelevant to the understanding of the real world. This irrelevance comes to a large extent from the failure of economists to match their deductive-axiomatic methods with their subject. Within mainstream economics, internal validity is everything and external validity is nothing. Why anyone should be interested in theories and models based on that warped priority is beyond imagination. As long as mainstream economists do not come up with any export-licenses for their theories and models to the real world in which we live, they really should not be surprised if people say
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Lars Pålsson Syll considers the following as important: Economics
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Don’t study economics if you’re interested in economics!
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Steve Keen gives a truthful view of the state of economics today. Modern economics has become increasingly irrelevant to the understanding of the real world. This irrelevance comes to a large extent from the failure of economists to match their deductive-axiomatic methods with their subject.
Within mainstream economics, internal validity is everything and external validity is nothing. Why anyone should be interested in theories and models based on that warped priority is beyond imagination. As long as mainstream economists do not come up with any export-licenses for their theories and models to the real world in which we live, they really should not be surprised if people say that this is not science.
Studying mathematics and logics is interesting and fun. It sharpens the mind. In pure mathematics and logics we do not have to worry about external validity. But economics is not pure mathematics or logics. It’s about society. The real world. Forgetting that, economics is really in dire straits.
To many mainstream economists, people like yours truly and Tony Lawson are synonymous with anti-mathematics. But I think reading what we have written on the subject, shows how unfounded and ridiculous the idea is that because heterodox people often criticize the application of mathematics in mainstream economics, we are critical of math per se.
Indeed.
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”
What is wrong with these beliefs is that they are not based on an ontological reflection of what can be rightfully expected from using mathematical methods in different contexts. Or as Knut Wicksell put it already a century ago:
One must, of course, beware of expecting from this method more than it can give. Out of the crucible of calculation comes not an atom more truth than was put in. The assumptions being hypothetical, the results obviously cannot claim more than a vey limited validity. The mathematical expression ought to facilitate the argument, clarify the results, and so guard against possible faults of reasoning — that is all.
It is, by the way, evident that the economic aspects must be the determining ones everywhere: economic truth must never be sacrificed to the desire for mathematical elegance.
