by From Nat Dyer Readers of this blog will be well aware of the myriad problems with the mainstream economics that has dominated university and political life for the past few decades. As Lars Syll wrote here last month, too much of the profession “has since long given up on the real world” and is happy to investigate the “thought-up worlds” of unrealistic economic models. Too much attention is focused on how the parts of the model fit together, rather than on how well the models fit with reality. But how can critics communicate these problems effectively? Especially to those who will be intimidated or turned off by a phrase like ‘ontological foundations’? In my new book Ricardo’s Dream: How Economists Forgot the Real World and Led Us Astray I unpack the problem and suggest an answer. One
Topics:
Editor considers the following as important: Uncategorized
This could be interesting, too:
Asad Zaman writes Newton’s lost revolution: Why his most radical work remains unread
John Quiggin writes Dispensing with the tech-bros
Dean Baker writes Businesses and DEI: Corporations don’t maximize shareholder value
Peter Radford writes Weekend read – An ignorance of merit … I am confused
from Nat Dyer
Readers of this blog will be well aware of the myriad problems with the mainstream economics that has dominated university and political life for the past few decades.
As Lars Syll wrote here last month, too much of the profession “has since long given up on the real world” and is happy to investigate the “thought-up worlds” of unrealistic economic models. Too much attention is focused on how the parts of the model fit together, rather than on how well the models fit with reality.
But how can critics communicate these problems effectively? Especially to those who will be intimidated or turned off by a phrase like ‘ontological foundations’?
In my new book Ricardo’s Dream: How Economists Forgot the Real World and Led Us Astray I unpack the problem and suggest an answer. One that uses a 2,000-year-old story of a lonely sculptor from Greek myth.
Pygmalion
It’s the story of Pygmalion from Ovid’s Metamorphoses which has inspired Hollywood classics such as My Fair Lady and the recent movies AI fantasy Her. This is how I describe the myth in my book:
“Pygmalion is a talented young sculptor from Cyprus who decides that all women are immoral, lustful creatures and chooses to live alone. He practices his art and becomes skilled enough to make up for the lack of a real companion by carving his ideal woman from ivory. The English translation of the text… described the statue as: “a maid, so fair / As nature could not with his art compare.”
Pygmalion knows his model is not real, and yet seduced by his creation, he falls for her. He whispers to her and kisses her cold lips. Pygmalion dresses his fake ivory love in the finest clothes, pearl necklaces, and rings. He lays the statue next to him in bed, puts a soft pillow under her head, and calls her “wife”. As Ovid’s poem puts it:
“He knows ’tis madness, yet he must adore,
And still the more he knows it, loves the more”Often retold as a warning about misogyny, the myth… is [also] a cautionary tale for model makers. The moral is beware of falling in love with your own representation of reality, however pliable or beautiful, confusing it for the real thing and ignoring its important weaknesses.”
The myth is a vivid analogy for how too many mainstream economists today are more content to interact with their models of the economy than the real thing. This problem has a name the Pygmalion Syndrome (not to be confused with the Pygmalion Effect, an altogether more hopeful phenomenon in psychology). It was coined by Irish mathematician and physicist John Lighton Synge, who wrote in 1970: “I have invented the name Pygmalion syndrome for that disease of the mind which blurs the distinction between R[eal]-world and M[odel]-worlds”. A disease, he confessed, that he suffered from.
In Ricardo’s Dream, I argue that a virulent strain of the Pygmalion Syndrome was widespread in the classical economics of David Ricardo’s time and the neoclassical economics of ours – and draw the links between this intellectual tragedy and real-world suffering.
All models are wrong…
But, hold on a minute. Models aren’t meant to capture every aspect of reality. That’s part of their design. Just as a map that tried to include every flower would be useless for navigating between two cities, a model needs to focus only on what is essential and leave the rest aside. Models are useful because they are simple. This is the gist of the famous quote – thrown back at critics – from British statistician George Box: ‘all models are wrong, but some are useful’.
What is almost never mentioned, however, is that the original paper from 1976 in which George Box wrote “all models are wrong” is not a full-throated defence of simple models. Box wrote that good statisticians were absolutely essential to the future of humanity and therefore needed to learn how to be good scientists. The scientist should not ignore what is wrong with a model, he wrote, but focus on what is importantly wrong.
To make his point, Box drew on the very same Greek myth of Pygmalion, writing:
“The good scientist must have the flexibility and courage to seek out, recognise, and exploit such errors – especially his own. In particular, using [Francis] Bacon’s analogy, he must not be like Pygmalion and fall in love with his model.”
One step towards healing our broken economic and political system would be if economists – and those policy makers and professions in thrall to their vision – would fall out of love with harmful, unreal economic models. They should do what Pygmalion was not able to do: go back out into the street and start interacting once again with flesh-and-blood humans.
There are other useful analogies, of course, such as models as spotlights in the theatre that pick out part of the stage and plunge the rest into darkness. For me, the Pygmalion Syndrome is a neat, two-word phrase that encapsulates a big, important idea. I hope to see it more widely used.