Friday, 22 December 2006

Hard edged thoughts from Asia

A little while ago I was in Hong Kong (cue gratuitous Blade Runner themed pictures of the city at night). On the way back, I read a paper Dilemmas of an Economic Theorist. It was probably a good thing that I was on a plane at the time: the spluttering of disbelief that such egocentric ramblings was published in a peer reviewed journal would probably have disturbed my neighbours if I had been at home. As it was I took another swig of Cathay's Bonnes Mares and composed a list of objections:

  • Firstly this paper seems entirely ignorant of any philosophy of science. While economics clearly isn't scientific, one might at least hope one of the referees had heard of Popper if not Lukacs. Anyway. The author poses the 'problem': Should we abandon a model if it produces absurd conclusions or should we regard a model as a very limited set of assumptions that will inevitably fail in some contexts? This simply shows the importance of defining a domain of applicability. Then if the model doesn't work within the domain, you have falsified it. It's wrong. Move on.

  • The next 'dilemma' is even more absurd. Should our models be judged according to experimental results? What else are you going to judge them on? How nicely they are typeset? Whether they give you a warm and fuzzy feeling when you cuddle them? That such a question is posed in an eminent journal just shows how deeply screwed some academic economics is.

  • Finally we have Do we have the right to offer advice or to make statements that are intended to influence the real world?

Ignoring the temptation to suggest on the basis of the foregoing economists have no right to enter a university let alone try to influence the real world, what else is economics for?

Show me an economist who is willing to put his own money on a trading strategy based on his theorists, and I'll respect him - Soros is the obvious example. Show me one who is trying to help a country improve its growth, or ameliorate poverty, or any other laudable objective, and I'll respect her too. But an academic who write papers as fatuous as Dilemmas of an Economic Theorist? Even the famously polite Chinese might have a problem finding something good to say about him.

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