Thou Shalt Not Overcomplicate Things

Justin Fox has a short piece at Bloomberg View that asks “What’s Wrong With ‘Mathiness’ in Economics?

He begins by characterizing (caricaturizing?) the pre-math economics profession as confused and garrulous philosophers:

Once upon a time economists made their arguments in long, discursive, often contradictory books…

Thankfully, Paul Samuelson brought math to the field like Moses brought the Ten Commandments down from Mount Sinai to the lost and wayward Israelites.

In the 1940s Paul Samuelson of the Massachusetts Institute of Technology brought enlightenment, in the form of elegant mathematical treatments of the major concepts in economics.

[…]

Samuelson’s approach gave the discipline a, well, discipline that it had previously lacked, and enabled economics to make great leaps in coherence and rigor.

But, just a few words later, Fox admits that

It also made the field incomprehensible to laypeople, but that turned out to be more a feature than a bug. Economists were seen as possessing unique scientific knowledge, and came to play increasingly prominent roles in public life in the U.S. and elsewhere.

Although I disagree with his first characterization of the pre-math economics and his regard for Samuelson’s influence, this last bit is where I want to parley with Fox.

The incomprehensibility of the math to the laypeople is the primary piece of evidence in the indictment against the current “mathiness” of economics. Economics is the study of those regular, ordinary laypeople making choices. Ordinary people make choices all the time, and so describing the nature or logic of their choices should be intuitive to them.

This does not mean that everybody automatically knows all of the deep and varied conclusions of economics just by making choices. It means that any explanation of how choice and interaction with other people making choices (like in markets) should be digestible without an advanced degree in another field like math or statistics. Choice and market interaction are so mundane and ubiquitous, explaining how they work should be simple, right?

I use this example frequently but it fits in well here: When you walk down the grocery store aisles, are you taking derivatives of utility functions? Or are you weighing your preference for each good against others and the money you are prepared to spend at the register?

Which of these two explanations for how people make choices would serve as a better foundation for the science that purports to study individuals making choices?

Fox doesn’t really answer the question posed in the title of his article: “What’s wrong with ‘mathiness’ in economics?” He just comments on Romer’s beef with the way mathematical models are overused and abused by even Nobel-winning economists. Fox quotes Romer:

Presenting a model is like doing a card trick. Everybody knows that there will be some sleight of hand. There is no intent to deceive because no one takes it seriously. Perhaps our norms will soon be like those in professional magic; it will be impolite, perhaps even an ethical breach, to reveal how someone’s trick works.

And I say no more magic. Drop the smoke, the mirrors, the rabbits, and their hats. Let’s drop the pretense–it is, after all, a violation of the Ninth Commandment.

You shall not bear false witness against your neighbor. (Exodus 20:16 ESV)

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1 Comment

Filed under economics

One response to “Thou Shalt Not Overcomplicate Things

  1. Reblogged this on Forwardeconomics and commented:
    Brilliant analysis of consumer choice and assumptions behind economic modelling

    Like

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