Wednesday , January 27 2021
Home / Lars P. Syll / Leontief and the sorry state of economics

Leontief and the sorry state of economics

Summary:
Leontief and the sorry state of economics Page after page of professional economic journals are filled with mathematical formulas leading the reader from sets of more or less plausible but entirely arbitrary assumptions to precisely stated but irrelevant theoretical conclusions … Year after year economic theorists continue to produce scores of mathematical models and to explore in great detail their formal properties; and the econometricians fit algebraic functions of all possible shapes to essentially the same sets of data without being able to advance, in any perceptible way, a systematic understanding of the structure and the operations of a real economic system. Wassily Leontief Mainstream economics has indeed, as noted by Leontief, become

Topics:
Lars Pålsson Syll considers the following as important:

This could be interesting, too:

Lars Pålsson Syll writes The Keynes-Ramsey-Savage debate on probability

Lars Pålsson Syll writes How Richard Posner became a Keynesian

peterc writes The Core Significance of Taxation and Currency Sovereignty in a Nutshell

Lars Pålsson Syll writes Leontief’s devastating critique of econom(etr)ics

Leontief and the sorry state of economics

Leontief and the sorry state of economics Page after page of professional economic journals are filled with mathematical formulas leading the reader from sets of more or less plausible but entirely arbitrary assumptions to precisely stated but irrelevant theoretical conclusions …

Year after year economic theorists continue to produce scores of mathematical models and to explore in great detail their formal properties; and the econometricians fit algebraic functions of all possible shapes to essentially the same sets of data without being able to advance, in any perceptible way, a systematic understanding of the structure and the operations of a real economic system.

Wassily Leontief

Mainstream economics has indeed, as noted by Leontief, become increasingly irrelevant to the understanding of the real world, and the main reason for this irrelevance is the failure of economists to match their deductive-axiomatic methods with their subject of study. The fixation on constructing models showing the certainty of logical entailment has been detrimental to the development of a relevant and realist economics. Insisting on formalistic-mathematical modelling forces the economist to give up on realism and substitute axiomatics for real-world relevance.

It is — sad to say — a fact that within mainstream economics internal validity is everything and external validity next to nothing. Why anyone should be interested in that kind of theories and models — as long as one does not come up with export licenses for the theories and models to the real world in which we live — is beyond comprehension. Stupid models are of no help at all in understanding the real world.

Lars Pålsson Syll
Professor at Malmö University. Primary research interest - the philosophy, history and methodology of economics.

Leave a Reply

Your email address will not be published. Required fields are marked *