Thursday, December 12, 2002

Torn Between Two Cultures ...

Thursday, 12 December 2002

Gary at Public Opinion has an interesting post on a 1992 article by US economist Paul Krugman. Krugman uses C P Snow's notion of the "two cultures" as the springboard for an attack on humanities intellectuals who just don't get economics because they can't handle the mathematics. Gary quotes Krugman's article extensively, and it seems a little one sided: in his fixation on the mathematically benighted humanities scholars, Krugman ignores the humanities benighted "hard" scientists who, for converse reasons, also regard most economics as a load of old rope.

I did two years of economics when I decided to supplement my B Sc with a BA. I didn't study the course under the best conditions: the first year lecturer in Micro was a rampant free-marketeer and some of the prescribed texts appeared to have been dumped on the Australian market after failing to find favour with the academic staff of US colleges and universities. But I have to admit that my jaundiced view of the subject was mostly informed by the naive prejudice of the "hard" scientist that if you're going to apply mathematical models, it generally helps if you occasionally try running some actual numbers through them. The most complicated mathematical problem I encountered in the whole two years was calculating the depreciation of the value of an asset over time. That's a straightforward exercise for anyone who learnt about geometric series in high school maths. As for all the diagrams and graphs, well the classical supply/demand curve is a piece of mathematical junk used to give a spurious pseudo-quantitive gloss to a priori qualitative analyses of how markets determine prices. They don't improve any from there either.

A lot of the time, I felt that the whole subject was Hume's is/ought fallacy writ large: somewhere between the lecture where a number of "simplifying assumptions" were introduced to allow us to develop a workable theory of market behaviour and the last lecture, the notion that trade works best when it's free was quietly dealt into the game from the bottom of the intellectual deck. There seemed to be a hell of a lot of this going on and it's become one of the mantras of the free marketeers: markets work if only they are left alone. On one level it's like the physical chemist's recognition that Boyle's Law starts to fail when the temperature of a gas gets low enough for it to start condensing - but chemists generally don't insist that government policy be shaped by the need to preserve the experimental conditions required for the application of Boyle's Law. Most of them understand that the really interesting stuff happens where Boyle's Law starts to break down, and instead of bitching about it, actually study the process.

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