I’d missed your contribution here. (Or I actually probably didn’t, but have forgotten it.) In any event, reviewing this thread, I’ve (re)discovered it and am glad you ‘shared’ it with us as we say these days.

the logical positivism/empiricism movement burned up a lot of high quality brains and many careers without producing much that contributed to science or social policy.

Well that put’s it about lineball with mainstream economics, except perhaps the economists got better pay.

On a historical note, Karl Menger, the son of Carl, was actually conceived with the assistance of a housemaid. Menger senior took the lad in and raised him as his own son. The fact that Menger junior turned into a positivist provides a striking example of unintended consequences.

Carl Menger (founding father of the Austrian school of economics) was a apparently a bit of a lad (a bit like Schumpeter you might say) in his youth he wrote slightly scurrilous novelas and pamphlets under a false name, and he lamented in later life that too much of his youth had been consumed by high living and love affairs.

Wow, you two really don’t like me, do you? But why? I can’t recall being nasty to either of you, and even if I were, what would it matter as you post anonymously? The stuff you have posted here is not very nice. In fact it’s downright nasty and hateful.

You both should read over the stuff you have posted to me and have a good look inside yourselves.

But hun, electrocution lessons is a globally-renowned funny, ironically usually a weapon of your types.

Yeah, it was real funny when Kellogg, Brown and Root did it to a dozen their of their own troops (not counting the ones who survived), while loading their pockets with cash handed down by Dick Cheney. I’ll bet they are laughing all the way to the bank. So how bad can the corruption get before the US falls to pieces? And where’s your mathematical model to show none of this is happening?

Nah. Just bitch-slapping a total twat in passing. But boy greenslime you do get excited at the thought you might have aroused in others any emotion other than contempt, don’t you?

“I have noticed that the majority of your tirades across blogs are about posters vocab”

I have noticed you often just make shit up when trying to score a point.

“But hun, electrocution lessons is a globally-renowned funny, ironically usually a weapon of your types. It is a Kath and Kim-esque riff on elecution lessons.”

Shorter greenslime “I meant it on purpose, really I did.”

There you go, your ration of attention for the day. Now you can slither off now like a good little gollum.

Lemme guess… glib fuckwits addicted to attention of any kind?

Hmmm..you’re probably right. My sample is probably extremely biased. ;)

Remember, Mathematics IS a language, itself. If somebody is too challenged to learn mathematics, I would not hold out much hope for their mastery of other reasoning languages, such as English.

You could say much the same about computer languages, Java, FORTRAN, etc. They are all mathematical constructs and complete enough that there would be very few mathematical concepts that you could not map readily into a computer language. Some of the efforts at writing theorem-solver programs also produced computer languages that are to all intents and purposes a direct mapping of mathematics (and you can try this at home with Maple-5, Macsyma, Mathematica, etc).

Having said all that, none of these constructs has yet replaced human thinking, other than in highly specialized and ultra-narrow problem domains. That’s because many real-world problems are poorly defined, have no measurable boundry conditions and the biggest part of the problem is getting to an understanding of what is the problem. Even once the problem is defined, the input values are unreliable, and even unreliable to an unknown and inconsistent degree.

And I agree, computers (and other formal constructs, just about all of which depend on computer support as soon as they get even moderately complex) are getting better at solving problems that were once considered only approachable by humans. A good example if massively high dimensional optimisation problems (e.g. upwards of a million unknown variables), the “TimberWolf” algorithm for laying out circuits is probably the best known (and highly successful) example. At the time TimberWolf was published, it was a bit of a shocking left-turn for the Artificial Intelligence community because it does not use any logical inference, nor deductive reasoning to solve the puzzle. It merely throws things down wherever, then shuffles a bit, then reshuffles.

I’ll also point out, that no one has come even close to teaching a computer to speak English.

Apart from people from non-English backgrounds, I am finding it hard to think of anybody who is fluent in Maths, who is not also very fluent in English.

It’s a pretty common situation in the under-21 computer geek community. I can find some system documentation extracts if you need proof.

Thus spake someone who can’t tell the difference between electrocution and elocution.

The comments function here doesn’t allow for the use of theorem symbols. But if it did, I’d not be alone in running out of such symbols to represent all covalent values of your sheer stupidity, self-obession and spite greenslime.

Apart from people from non-English backgrounds, I am finding it hard to think of anybody who is fluent in Maths, who is not also very fluent in English.

I dont think we disagree on any of this. We both see uses for quick analogies as sources of creative new ideas and would both like to see more and more effort being put into thinking about the validity of the analogy as the arguments get to be made in more serious and more important fora. Whilst truly bad analogies do, I think, get weeded out reasonably fast in the market for ideas, entrenched bad theories do not.

The apparent inability to self-cleanse nonsence once it has grown roots is, IMO mainly due to the fact that they carry a grain of truth in them which is simply overextended but which has famous people’s careers riding on them. You need something pretty big to knock ‘m down. A big recession will weed out a few theories. I think it will take a couple of decades before RBC gets taken seriously again after this recession, though Barro is not letting it go without a fight and, it must be said, many of the textbooks in circulation right at this moment still preach it.

The fact that there is a market for ideas however doesnt mean you simply have to wait for someone else to do the debunking Nick. It is not necessarily fatalistic at all. You and I are part of this market and you seem to be quite happy to knock RBC whenever you can. I am not known to be shy with opinions either. Consider us part of the economic-self-cleaning brigade!

John,
of course mathematics is a language, simply one that is less based on images, storylines and sounds, and thus has different psychological characteristics from English. I dont know about the general relation, but, amongst students, English and math ability often do not go hand in hand.

I’m certainly not arguing that one shouldn’t make wild associations and see what insights they might provide. That’s quite different from imagining, as many people do, that once you’ve got something down in a model you’ve somehow got closer to the reality. Becker’s analogies are fine, but that’s what they are – analogies, with all the strengths and weaknesses of analogies. Unfortunately we seem to have lost the ability to discuss them as analogies keeping in mind their weakneses.

One of the really big problems is that there is a sense of fatalism about how the discipline uses its resources. This is summed up in your comment “If there is really no merit in the analogy, then the market for arguments will eventually knock you down.” Well what exactly does that mean? It just means that things will turn out the way they turn out. Real Business Cycles and all the other nonsense is all in the mix and will remain so I would imagine, and it will go out of favour at some point. Perhaps the current paroxysm will be enough to chase it away. But it will be replaced by some other idiot savant enthusiasm.

Note that a couple of months ago there was a serious discussion in US policy circles as to whether rising unemployment reflected voluntary withdrawal from work. Right now we have a discipline in which idiotic ideas are lined up with serious ones as if they’re on an equal footing and then told that the market for ideas will sort it out.

In the long run we’re all dead. If you can’t defend yourself against self-evident nonsense it doesn’t seem to me you have much of a market for ideas.

I would agree that economists are rash in their use of analogies and dont wonder enough about whether they really apply. Its the old story of the hammer and the nails. I would even agree I now and then am guilty of such rashness, but on the other hand it has been one main ways for economists to proceed and to break into new areas. Applying economic thinking to issues within the family, within religions, and within ethnic groups seems to me to have been quite powerful, even though it was bitterly resisted by others who basically said what you said, i.e. ‘dont make such rash analogies’. Hence I suppose you will win some and lose some of you venture ahead with analogies without really knowing all the comparability issues. If there is really no merit in the analogy, then the market for arguments will eventually knock you down.

On the issue of angels and pinheads, it is of course true that I am no expert in medieval scholasticism. Its not something they teach you in econ grad school. Without cheating by googling all the answers, all I can give you is the answers a classical education provided: yes, there was quite a bit of competition amongst Christian scholars. Particularly for the attention of the pope and the cardinals, who elevated some scholastic ideas to dogma (such as the idea of the separation between nobility, clergy and the commoners), but killed off other ideas. Competition between scholastic centres included the competition between the 5 patriarchs (which was won by Rome), the divide between the Catholic and Orthodox church, but also between a whole horde of monasteries. The competition included competition over interpretations of the bible, the divinity of Jesus, the divinity of the church, the divinity of worldly leaders, etc. If these debates became too heated, they were usually decided by papal decree. Within monestaries and centres of learning too, there were more wannabees than going-to-bees. You didnt get to be head inquisitor or bishop without some elbowing. Hence normal human argy-bargy was as much part of the church as it is for modern academia, and scholastic prowess was one dimension of the competition.
Now, one could easily spend a whole PhD thesis on trying to further defend the analogy between the tendency of economic scholars to enter into their own fantasy world, and the world in which medieval Christian scholars worked. I know neither you or I have the time to look that much further. Perhaps someone else already has much more insight on this?

I realise we’re both conducting the conversation with a degree of levity – with the liberal use of smileys to indicate as much. But I think your gung ho use of analogies does indeed point to something important. The usefulness of model building relies just as much on judiciousness in their application as on their quality or the virtuosity of their formal technique. It’s a constant problem in economics that this question of how well the models fit is inadequately dealt with – indeed, it’s more or less dealt with by default. It’s just ignored and regarded as a commonsensical part of the discipline. And analogies are thrown around with reckless abandon. In addition categories which have been hewn in one area – supply and demand in commodity markets – are then thrown around quite recklessly – the supply and demand of political votes, or intellectual ideas etc.

Now there’s nothing wrong with playing with ideas like this. And I guess there are some worthwhile insights in Gary Becker style economic imperialism. But there are a lot of economists running round without much feeling for the fact that such violence to the subject material comes with its own costs and that these costs should be kept in mind as the discussion proceeds.

Your conclusion that the schoolmen had too much time on their hands is essentially tautilogical isn’t it? You’re concluding this from how silly their work seems to us. So that’s not really responding to my challenge. Did Isaac Newton have too much time on his hands – certainly seems to when he got into alchemy and prophecy.

And the schoolmen were not competing with each other in the way modern academics do – or if they were, I’d think we’d need to know plenty more about them than we do (apologies if you really do, which given your breadth of knowledge wouldn’t amaze me too much – it’s certainly beyond my knowledge.)

It seems to me that the schoolmen analogy is probably relevant to this discussion, but beyond taking it as an illustration of the truism that ‘ways of seeing’ are self perpetuating, I’d be loath to take too many lessons from it on the appropriate institutional structure for a discipline without more knowledge. – certainly more knowledge than I have.

of course the hold-up issue arises in many situations and goes by different names. It for instance arises in the electricity sector, between the power generator and the grid and then again with the retail. It also arises with rail, i.e. between the rail grid and the train operators. In each case you will find hard-to-observe investments by the one that affect the output of the other (such as how often the wheels of a train are polished in order to keep them round which apparantly is a crucial issue for how long the tracks on which the trains ride last). The advantage of having it thought trough once in a particular situation, is that you can immediately dismiss it when particular necessary assumptions dont hold. For instance, you shouldnt get a hold up problem between identical entities because they are substitutes, not complements.

As to the issue of angels, hej, why spoil the predictions of a good model with much information :-)
More seriously though, the angel example is not that far-fetched. I obviously cannot prove how it arose to notoriety (for a discussion on that, see here) but it does seem as if discussions like this one basically arose because religious scholars had too much time and too few realword important questions to solve. Like some econ theorists they became pre-occupied with the internal consistency of their own imaginings, looking at questions like whether there are toilets in heaven and if there is a day-and-night cycle in the afterlife.

I guess I’ve just seen too many models turn from a knock-up demo into holy writ without going through much in the way of the difficult stuff in between (experiment, measurement and prediction).

By the way, I’m not so sure about your non-observability criteria in the hold-up problem (I hadn’t heard that particular name before, but I’m familiar with the problem). I would generally say that the problem lies in fair valuation of complementary inputs. Each trade will reliably believe that their particular contribution is highly valuable because their sense of self-worth comes from that. In a marriage for example (ignoring the affairs on the side) both partners have a pretty clear idea what the other one puts in (as a physical observable), but without any available substitute there is no way to attempt a valuation. More than that, I would argue that a fluid marketplace is exactly what provides the consistent valuation over inconsistent inputs, for the hold-up problem to exist there must be some obstruction to fluidity in the marketplace (e.g. in marriage the social convention that frowns upon trade-ins, also makes each party safe from competition, thus shifting their incentives towards shopping or beer as appropriate).

Where there’s genuine non-observability (like using beach sand for concrete instead of river sand, or writing buggy software) you will reliably find someone who tries it on (sometimes a warranty helps that, usually stricter observation is your best friend). I guess that the opportunity of repeat business is an influence, which is where the fluid marketplace comes in… make sure the slackers know they can be replaced (and I’m looking at you Mr Banker).

Your comment seems reasonable – though perhaps excessive – that is I expect there are several causes of the phenomenon, but your analogy is (surely) a bit wild. Do you really know that the debate on number of angles on the head of a pin is a product of disciplinary competition?

I think you are giving formalism an unnecessary bad rap here. If models are only useful if you can actually trust the predictions they have, then you’d indeed have precious few useful models in economics left. The main use of models is more, in my opinion at least, to get the right concepts in focus when discussing a problem. A model makes you think of the right things. Let me give a stylised example.
A well-known model in labour economics is that of the hold-up problem. This arises when people make investments into the production of a good, whilst they have to agree beforehand what share of the pie they will get. Because they have to share the pie, both will individually underinvest. If there are for instance two people who share the output 50-50, then each individual will invest up to the point where each unit invested begets two additional units (of which they hence individually recoup 1 unit again).
Now, in words the hold-up problem is a pretty streightforward issue to explain, and you’d be forgiven to think the above pretty well sums it up. What are the hidden lessons you learn if you start to model every step explicitly?

1. You need to have a production function. This forces you to think of why each individual cannot produce on his own without this incentive problem. This makes you realise that the hold-up problem needs a notion of complementarities that make the agents more productive if they both contribute. Not just do they have to do complementary activities, but these must furthermore be innate to things you cant take away from them (otherwise an entrepreneur would just buy them). Hence we’re talking about complementarities of innate skills.
2. You have to work out who knows what at each moment in time in a model. This pretty quickly forces you to realise that if the agents could monitor each other’s investment, they could contract on the optimal outcome. Hence you then realise the investments have to be unobservable, or at least not verifiable. This is not a trivial insight, because it also means that if you see a hold-up problem when things are observable, then contracting on the investments could solve it.
3. You have to be precise about timing in a model. If agents would make their investments sequentially, then in principle one of the agents could simply ‘buy’ the intermediate production generated by the other. This would make the investments visible again via the intermediary output, which is clearly not the spirit of the hold-up problem. Hence you are forced to recognise that the investments have to be made simultaneously.
4. You have to be precise about how the output eventually gets distributed, i.e. have some kind of bargaining set-up. The main understanding you get from that is that it makes you realise that the optimal kind of contract is one whereby you trust each other to be reciprocal in your investments, even though this cannot be strictly enforced. Hence it makes you think of social institutions via which the importance of the hold-up model is mitigated. It makes you think of the costs that would be imposed if rewards are entirely driven by observables. It makes you think of the circumstances in which worker co-ownership is useful. Etc.
5. (perhaps most importantly) You get the opportunity to scrap things out of your model if you dont need them. You can thus for instance show by merely formulating a simple hold-up model that you dont need a firm and you dont need property rights or even a market to generate hold-up problems. This makes you realise that even though the model is initially describing two workers, you could re-interpret it to fit other situations, like marriage.

If you are a consistent thinker, you can get at these implictations in words (as I just did), but the discipline enforced by going through the formulation of an actual model ensures that you wont miss a trick and that you thus will have uncovered all the hidden assumptions you need to make for a hold-up problem. Now, you wont find a hold-up model in which people put actual data and via which they make predictions, but it is nevertheless a powerful thing to have built one. The other thing formalism will do is to provide you with a simple mental model via which you will start to see hold-up problems all around you. It is as if you’ve been given the idea of a circle after which you quickly recognise anything looking remotely like a circle.

Nick,
agreed on your story of how our profession is not valuing the right things. I do not think that has much to do with formalism though, but is a simple function of career pressures. For an analogy, just think of theological debates in the Middle Ages. Because there were thousands of philosophers and priests in need of a job, they started arguing about the number of angles on the top of a needle. That debate was fairly useless too, though of course not according to the people debating it.

But then, Economics exists as both an intellectual discipline, and also as a political discipline. In the later case the conclusion to be reached is well understood (whatever our political masters tell us is true, must be true). The only question is what method do we use to convince the unwashed masses that the economy really is in good hands, no one is cheating the system, and they can go back to working happy in the knowledge that whatever they get is exactly and precisely what they deserve (and look, my mathematical model says so).

OK, there’s also an opposition party, so their pet economists will reliably say that the government screwed up, and we are sitting in the handcart. You know the deal I’m sure. Would you like a chart with that?

Computer graphics get used in the same way, whatever you want people to believe, you just generate some computer graphics showing it happening. Away we go. Most people won’t ask questions because they are too busy oggling at the bright colours, and when one or two people do ask questions you just get some big guys wearing sunglasses to follow them out into the carpark (or however they do this in your particular industry). That’s politics, nothing to do with science or advancing human knowledge.

Don’t get me wrong. Charts, computer graphics, and mathematical constructs all have a useful place too!

By the way, whenever someone does pop up a chart at a meeting or conference, it’s a matter of principle to ensure that at least one person in the audience asks them some technical question about the construction of that chart. Something about the choice of axis, or how the curve fit was done, or the units used… there’s always something. Pretty quickly shows up the guy who pasted in a pretty picture without understanding what it means.