Re: CAMREC: science

From: the Campaign for Real Economics (
Date: Wed Feb 21 2001 - 11:21:26 GMT

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    From: the Campaign for Real Economics <>
    Date: Wed, 21 Feb 2001 11:21:26 +0000
    Subject: Re: CAMREC: science

    Dear CHR,

    > Like although you can increase the
    > grain/exactness of research by e.g. using agent based
    > modeling can you justify the associated increase in
    > necessary work? In the end you end up rebuilding
    > reality!

    If the phenomena you are dealing with are as messy, complex and
    contingent as economic phenomena (being a subset of the social) then
    hoping for a quick "short-cut" to neat models is hopeless - you have to
    start towards the realistic end and hope to abstract/generalise later.
    Think biology and someone asking whether all that field-work and
    description is necessary, surely it is far more cost effective to devise
    a new philosophy about animals in ones armchair from a prior principles!

    > Where would you put GE according to your tell-tale
    > criteria? Where the evolutionary approach a la Nelson
    > and Winter - if you happen know it? the
    > behavioral/cybernetic appraoch to organizations a la
    > March, Simon? Where the work of Brian Arthur on
    > increasing returns and later on (together with Doyne
    > Farmer and others, I think) ecologies of strategies in
    > financial markets?
    > What about game theory? And Econophysics? Just pick
    > some examples.

    Wow! Generalising wildly here - approaches that start with the problem
    and adapt the solution/model are much sounder than those that take a
    technique and adapt the problem to fit that technique. GE and game
    theory is towards the former a priori approach and Simon to the later.
    Nelson and Winter (as I understand it) are more wedded to a particular
    technique. Econophysics is good in that it allows more techniques to
    choose between but makes the mistake of assuming the foundations are
    sound (like in physics), thus they tend to "build on sand".

    > You claim that there is too much a priori
    > formalization - good! I agree. But how can I prove
    > this to a mainstream economist? And if I prove it, how
    > can I change his actual research behavior? He will
    > claim that he is in contact with people involved in
    > practical problems or is involved with them himself -
    > how to get the equivalent of field ecologists or
    > practical physicists/chemists in economics?

    We (scott and I) have been trying to persuade economists for years and
    have failed. Better (if you have that choice) simply to leave economics
    but still model economic phenomena (e.g. in the new field of social
    simulation). People on the edge of economics are persuadable but those
    in the mainstream have too much to lose by admitting they are doing bad

    The best argument I have is to ask "What if economic phenomena are more
    like biology than physics?". You can support this by asking "What
    evidence is there that one can meaningfully model economic phenomena
    using summative analytic techniques?" and go on with the corollary that
    one has to follow a more descriptive technique, to capture the thousands
    of species, niches, mechanisms, etc. that are out there.

    > You can justify any theoretical system by potential
    > future use/knowledge it offers (thats the scientific
    > side just driven by the glowing need to figure sth out
    > and it might be that this little piece of knowledge
    > becomes important later on) and kill it with
    > efficiency arguments (thats the engineering side)

    If it is science then *at some point* one must be able to say this or
    that approach has failed - or else everything is allowed and we make no
    progress. Even pure mathematics has criteria of usefulness (generality,
    importance, relevance etc.) and is superseded. Economics is not a young
    science anymore - how many more eons of disproportionately high funding
    must we provide it before we decide to direct resources to something
    more productive? (this is quite apart from the fact that it resolutely
    ignores it own negative results).

    > So are we all (more or less) priests of one (or more)
    > ideology/ies?

    No, I'm for truth - to be precise for developing models that are, at
    least, consistent with observations of the phenomena we deal with. I'm
    not for conning funding sources to further my own career (OK, most
    economists don't realise they are doing this but there is certainly some
    realisation as revealed in the different rhetoric used with funding
    applications and in economic papers).


    Bruce Edmonds,
    Centre for Policy Modelling,
    Manchester Metropolitan University, Aytoun Bldg.,
    Aytoun St., Manchester, M1 3GH. UK.
    Tel: +44 161 247 6479 Fax: +44 161 247 6802

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