George Cooper, author of the highly praised, The Origin of Financial Crises: Central Banks, Credit Bubbles, and the Efficient Market Fallacy, has a new book, Money, Blood and Revolution: How Darwin and the doctor of King Charles I could turn economics into a science.
Economics in need of a re-think
Quoting George Cooper
My comment there:
I haven’t read Cooper’s book yet, but based on the passages quoted above, I would agree that economics is in a pre-revolutionary stage, much as classical physics was immediately prior to relativity and quantum mechanics. Nineteenth century physicists actually sounded a lot like today’s conventional economists that dominate the field and have declared the methodological debate over. Perhaps economics will get its Einstein, Bohr and Plank, et al.
And perhaps we see some the early work having already emerged in Keynes, Lerner, Minsky, Tobin, and Godley, as well as in philosophy, life sciences, psychology, and social sciences. I lead with philosophy there with a reason — economics is foundationally normative and economic institutions are not based on nature as much as they are on custom and law.
I haven’t read Cooper’s book yet, but based on the passages quoted above, I would agree that economics is in a pre-revolutionary stage, much as classical physics was immediately prior to relativity and quantum mechanics. Nineteenth century physicists actually sounded a lot like today’s conventional economists that dominate the field and have declared the methodological debate over. Perhaps economics will get its Einstein, Bohr and Plank, et al.
And perhaps we see some the early work having already emerged in Keynes, Lerner, Minsky, Tobin, and Godley, as well as in philosophy, life sciences, psychology, and social sciences. I lead with philosophy there with a reason — economics is foundationally normative and economic institutions are not based on nature as much as they are on custom and law.
The just so stories that economists since John Locke and Adam Smith tell about the origins of property, markets, money, utility, and motivation are just that — made up. There has been little serious examination of these key elements in conventional economics in light of the disciplines that actually study these matters empirically and historically.
A large stumbling block for conventional economists is “lack of formalization” that enables precise predictions. Well, that was a huge stumbling block in the acceptance of quantum theory as well. Even Einstein objected that God does not play dice and he never really accepted the stochastic nature of physical reality at its core. Maybe, just maybe, the subject matter exceeds the degree of precision that economists holding on to traditional econometric models admits — as Keynes, who knew something about probability, told Tinbergen.
Comment by Tom Hickey— 24 March, 2014 #
A large stumbling block for conventional economists is “lack of formalization” that enables precise predictions. Well, that was a huge stumbling block in the acceptance of quantum theory as well. Even Einstein objected that God does not play dice and he never really accepted the stochastic nature of physical reality at its core. Maybe, just maybe, the subject matter exceeds the degree of precision that economists holding on to traditional econometric models admits — as Keynes, who knew something about probability, told Tinbergen.
Comment by Tom Hickey— 24 March, 2014 #
Where has this field been the last 85 years?
ReplyDeleteI mean, REALLY!