Friday, May 26, 2017


Sponsored by the History of Economics Society
Vol. 12, No. 27: May 26, 2017

SSRN HERE  PETER J. BOETTKE, George Mason University - Department of Economics Email: PBOETTKE@GMU.EDU
“Economics, properly understood, makes sense out the complex web of historical relations that constitute reality, namely by utilizing economic theory. Economics without price theory is not economic theory, and measurement without theory isn’t empirically meaningful. However, graduate students are being increasingly trained in sophisticated procedures of optimization and statistical testing, remaining largely ignorant of economic theory as a tool to understanding economic history. This address is a renewed call for my fellow economists to continue to instill in their teaching the beauty of economic theory, as well as the empirical importance of economic history. In short, economic teaching and training must instill an understanding of economic forces at work, and properly done, instills the principles that constitute a golden key that unlocks the deepest mysteries in the human experience. Without learning the governing dynamics of human action and the mechanisms that produce the social cooperation under the division of labor, modern civilization will be left undefended against the fallacious claims that market processes are exploitative, monopolistic, and unfair.”
Interesting. Peter Boettke is a most literate writer/teacher on economics. I am pleased he has noticed the consequences inherent in the contemporary mathematisation of economics, including the absorption of economics departments into departments of pure and applied mathematics. That trend may well continue.
Of relevance, see David Warsh and hisKnowledge and the Wealth of Nations: A Story of Economic Discovery”, Norton. Here the ever-changing development of macro-models of financial economics are revealed, and presumably continues, along with Nobel prizes.
I remain unconvinced that human behaviour can be modelled mathematically. Even the simple supply and demand curve diagrams are suspect, along with the asssociated ideas of equilibrium.  They make excellent tools for teaching and examinations, but do they exist in the long-chains of productive activity in the real world? 
Even Smith’s account of the labourers common coat in Wealth of Nations showed the complexity involved in making it by people several links along the chain. He showed similar complexity in his Lectures on Jurisprudence which addresses another even more complex description of the inter-connecting chains innolved in the distinctive living standards of the poorest consumer in societies, compared to the even greater abject poverty of humans living off the forests.

NB: Nothing said above diminishes my long standing admiration for Peter Boettke’s scholarship as a teacher of economics.


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