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Archive for July 5th, 2011

Much post-crisis navel-gazing in economics has concluded something like, “economists treated economics as a science, even though it isn’t,” or, “it’s more like biology than physics.” The implicit assumption is that the hard sciences are science wrought certain and unassailable. In his book The Blind Spot, William Byers belies that notion by speaking to the uncertainties that scientists often miss in their own field. I think this book is important for students and scholars of economics to read, though, because many of the points Byers makes can be said even more truly of economics than mathematics and the physical sciences.

Byers begins by addressing these disciplines within his scope head-on, drawing on the history and philosophy of science to show that whatever the subject, many “results carry a family resemblance. There are limits to what we can know.” He then puts forth a dialectic of science as certainty versus science as wonder, arguing that “coherence results from acts of creativity…[and] transcends classical objectivity and subjectivity.” I wonder where economics fits into this dialectic- what is an economics of wonder? Economics, for all of its faults, is often practiced by genuinely creative people who want to model the world to answer interesting questions. Likely, though, the limits come as economists seek what Byers asperses- certainty; economists may too often fall short because they limit themselves to questions that can be answered with the data or methods at hand.

Much of the body of the book is filled with engaging vignettes of the history of science, as well as philosophical digressions that frame key issues in similar dialectics. I won’t belabor it, because I think this book is not easily treated in a simple blog review, but I think the key takeaways for science are just as easily said for economics. For example, Byers discusses how the jump from mathematical equations to real world applications of those equations is often fraught with peril. I was intrigued by an article by Wolfgang Dreschler in the same vain that spoke directly to economics: “mathematics might be easily yet erroneously taken as the real kind of connection between objects.” Indeed, the relationship between model, variable, and real world is one often glossed over in economics, and apparently in hard sciences as well.

Byers’ conclusion has a lot to say for economics too: “human judgment must be reclaimed from those theories, ideologies, and mechanical systems than can be so intimidating…the world is uncertain and the problems are difficult…[but] the world of the uncertain is the world of creative possibilites.” Economics, especially as it is practiced in the mainstream, does not have a sufficiently robust philosophy of itself to justify any comparison to the hard sciences. However, the main takeaway we can gather from Byers’ work is that “science” isn’t a goal for a given discipline; rather, the goal is to exhaust all methodologies as appropriate, embracing uncertainty, and attempting to answer questions that matter, no matter how seemingly intractable.

For too long, economics has approached the questions that seem observable, hoping to offer a ceteris paribus answer in all cases. Reading Byers’ account of science’s own struggles should be informative and sobering against this approach. Quite simply, uncertainty will not allow it approach to work; we will get some answers, but they won’t be answers that compel the real world to act just so. Economics needs to put away its delusions of scientific grandeur, and instead aim to be useful and creative, not authoritative or universal.

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