Economics for reality or theory?
Submitted by Aguanomics Blog
Andrew sent this:
I found your lecture today about the theoretical/mathematical vs. the practical application of economics very interesting, and very much along the lines of my own observations. I have noticed that there are two schools of thought in the field, that there seems to be animosity between them, and that we may beyond the peak of usefulness of quantitative analysis (as in, negative utility) - at least until we have some awesome breakthrough in mathematics that allows us to model life more accurately.
Math is cool (even though I hate it most days), but it will always just be math…nothing more. Math to me is like the uniform a basketball (or whatever) team wears…part of the game, but my interest lies with the game and not team uniforms.
I am curious about this because the dynamics between these two schools of thought have implications for me as I move forward.
I enjoy economics so much that I went back to school after a 20 year absence to study it. Over the years I worked for a few large corporations, worked as a consultant, and owned my own retail business. At this point I only have interest in practical application of economic theory. That could be research in a Master’s program or finding meaningful work after Berkeley. Whatever I choose it will be real, tangible and practical.
As an aside, I had to laugh at ‘mathturbation’…Whenever I hear someone talk in a way that suggests they think math is more than just a tool I hear Sammy Hagar singing “..to me it’s all just mental masturbation”….and I think Paul Krugman is awesome.
So my question is this:
Relating to the issue discussed today, do you think there is a meaningful (lasting, permanent) split among economists over the issue of practicality and real life vs theory? If so, is the split analogous to what happened to political science in the 50’s and 60’s? My understanding is that Polysci used to be the study of actions and consequences…positive statements and scientific research…but it grew to include normative ideas about our political system, which included an expression of values. That was the new, modern direction the field took, and that evolution came about during the political and social turmoil of the 1960’s. Some people embraced the new direction and some did not. The ones that did not became part of a minority camp within the field. Do you see a similar crossroads for econ?
All of this has implications for my future so I’d like to hear your thoughts. The more I know about what I’m getting into before I get into it, the better.
Thanks…sorry for the length…I suck at writing short (any)things.
…and here’s my answer:
That’s a good question. The positive vs normative split is well-known and disparaged in econ. Many thought that we should stick with positive econ, but we all know that normative econ is where the action is at (policy) AND where anyone with an opinion will go. That’s why “unstated” biases are so dangerous and prevalent in economics…
That said, I would hope that reality would check thoughtless, inaccurate and misleading math econ, but the self-sustaining nature of mathurbaters (get a phd from a math-econ place; get hired by an m-e place, publish in m-e journals, train more students in m-e) means that it may persist (and perhaps HAS persisted) far beyond its useful (as in real-world relevance) life.
That’s just sad, but it’s mostly true.
Luckily, we have things like the nobel prize and reality to push back on such silliness…
What are your thoughts?
