Comments on: Idealisations in Economics http://tar.weatherson.org/2009/11/29/idealisations-in-economics/ Donate to Oxfam: <a>Australian link</a>, <a>New Zealand link</a>, <a>UK link</a>, <a>US link</a>. Fri, 13 Jan 2012 21:57:01 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: keddaw http://tar.weatherson.org/2009/11/29/idealisations-in-economics/comment-page-1/#comment-5954 keddaw Wed, 02 Dec 2009 11:07:11 +0000 http://tar.weatherson.org/?p=2483#comment-5954 Most sciences have an idealised version that is used, especially when dealing with students. Physics students are told to ignore friction when calculating how far an object will travel. Later they are told to ignore relativistic effects when dealing with Newtonian mechanics. Chemists very rarely include quantum effects when working out their equations. To pick out economics and complain that the equations make too many idealised assumptions is to ignore the original intellectual basis of the science. Another problem with this attitude is that it applies almost explusively to macroeconomics which is virtually the most difficult field, outside of black hole mechanics, to do a practical experiment in. Microeconomics is not only relatively easy to do experimentation in, quite often companies are more than happy to indulge in the economists experiments leading to enough data to accurately test the theories and attempt to falsify them without having to jump through econometric hoops. Would you agree that most complaints here were based on macroeconomics rather than microeconomics? And if those arguments hold up should economics be split into two disciplines, theoretical and practical based on the scale? Most sciences have an idealised version that is used, especially when dealing with students. Physics students are told to ignore friction when calculating how far an object will travel. Later they are told to ignore relativistic effects when dealing with Newtonian mechanics. Chemists very rarely include quantum effects when working out their equations.

To pick out economics and complain that the equations make too many idealised assumptions is to ignore the original intellectual basis of the science.

Another problem with this attitude is that it applies almost explusively to macroeconomics which is virtually the most difficult field, outside of black hole mechanics, to do a practical experiment in. Microeconomics is not only relatively easy to do experimentation in, quite often companies are more than happy to indulge in the economists experiments leading to enough data to accurately test the theories and attempt to falsify them without having to jump through econometric hoops.

Would you agree that most complaints here were based on macroeconomics rather than microeconomics? And if those arguments hold up should economics be split into two disciplines, theoretical and practical based on the scale?

]]> By: Eric SChliesser http://tar.weatherson.org/2009/11/29/idealisations-in-economics/comment-page-1/#comment-5939 Eric SChliesser Sun, 29 Nov 2009 22:35:33 +0000 http://tar.weatherson.org/?p=2483#comment-5939 Brian, First, it is never too late (especially for somebody with your talents) to return (!) to philosophy of economics. Second, I think you (and John) are right about the scope ambiguity, but I don't think focus on it captures the sociological and policy reality of economics. I think the economists' response is on to something, but also misses an important methodological point. Let me explain: the mass majority of working economics is hyper-empirical; it uses a small family of models and techniques that are adapted to some local/applied question (this often involves the relaxation of assumptions that you mention) in combination with statistical and econometric software that is used to handle the data. A small class of economists is extremely formal--these explore hyper-idealized models (few of which give up on all the assumptions you mention, although increasingly more and more do). Now the problem is this: there is almost no feedback mechanism between the empirical work done on the applied side and the hyper-formal models (even if some of these are used in all kinds of simulations--which often are thought of as empirical within economics). This is the core evidential problem of the science. This is related to the problems of economics as a policy science, but I should really write something separate about that some other time. Brian,
First, it is never too late (especially for somebody with your talents) to return (!) to philosophy of economics.
Second, I think you (and John) are right about the scope ambiguity, but I don’t think focus on it captures the sociological and policy reality of economics. I think the economists’ response is on to something, but also misses an important methodological point.
Let me explain: the mass majority of working economics is hyper-empirical; it uses a small family of models and techniques that are adapted to some local/applied question (this often involves the relaxation of assumptions that you mention) in combination with statistical and econometric software that is used to handle the data. A small class of economists is extremely formal—these explore hyper-idealized models (few of which give up on all the assumptions you mention, although increasingly more and more do). Now the problem is this: there is almost no feedback mechanism between the empirical work done on the applied side and the hyper-formal models (even if some of these are used in all kinds of simulations—which often are thought of as empirical within economics). This is the core evidential problem of the science.
This is related to the problems of economics as a policy science, but I should really write something separate about that some other time.

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