Debreu on Danger of Over-Mathematization of Economics

From Debreu’s Presidential Address before the American Economic Association:

In the past two decades, economic theory has been carried away further by a seemingly irresistible current that can be explained only partly by the intellectual successes of its mathematization.
Essential to an attempt at a fuller explanation are the values imprinted on an economist by his study of mathematics. When a theorist who has been so typed judges his scholarly work, those values do not play a silent role; they may play a decisive role. The very choice of the questions to which he tries to find answers is influenced by his mathematical background. Thus, the danger is ever present that the part of economics will become secondary, if not marginal, in that judgment. (p. 5)

Debreu, Gerard. “The Mathematization of Economic Theory.” American Economic Review 81, no. 1 (1991): 1-7.

Tenure and the Market as Protectors of Free Thought

Mark Blaug as a young tutor at Queens College in New York, endorsed a student petition protesting the firing of a left-wing tenured professor for having refused to co-operate with the Un-American Activities Committee. Less than a day later, Blaug received a note from the President of Queens College, telling Blaug that his choice was either to resign or be fired. He resigned.
Fortunately, he received a grant from the Social Science Research Council to complete his dissertation, after which, again seeking employment, he obtained a job interview at Yale:

(p. 77) In the course of the interview, I felt impelled to explain how I had lost my previous teaching position at Queens College. I always remember how Fellner cut me off, saying: ‘We don’t want to hear about that. This is a private college and what transpired at a public university a few years ago is of no concern to us.’ I never had a better demonstration of Milton Friedman’s thesis that a free market, by multiplying the number of probable employers, is more likely to secure liberty for the individual than a socialist system in which the state is a monopsonist.

Source:
Blaug, Mark. “Not Only an Economist: Autobiographical Reflections of a Historian of Economic Thought.” In Reflections of Eminent Economists, edited by Michael Szenberg and Lall Ramrattan, 71-94. Cheltenham, UK: Edward Elgar, 2004.

Enterprise and Government in Harry Potter

A long time ago (30 or 35 years) I attended some sessions on film and ideology at a week summer conference sponsored by the Intercollegiate Studies Institute. At one session they screened Frank Capra’s Mr. Smith Goes to Washington, and then the faculty panelists, with help from the audience, proceeded to thoroughly trash Capra for left-wing, anti-capitalist, populist bias. I sat and frowned and fumed, but the session ended without me having the courage to defend Capra. What I wish I had said was that Capra may have been a left-leaning populist; his economics may have been all wrong; but if that’s all you say, you miss the main point. The main point of Capra is loyalty, and persistence, and courage and good-humor. One can reject Capra’s implied economics and still love his movies.
Well on the night of Friday, July 15, 2005, with my wife and daughter, I hung out at the local Border’s book store with a huge crowd of other fans, waiting until the stroke of midnight to be allowed to purchase Harry Potter and the Half-Blood Prince. Similar scenes played out all over the country, and in other countries as well. Apparently the book, like its predecessor, is setting all kinds of sales records.
And analyses have begun to appear about Harry Potter’s economics and politics. (The July 15, 2005 Wall Street Journal ran a piece suggesting that Dumbledore is Winston Churchill and Voldemort is Adolph Hitler.) They too miss the main point.
The main point is that the leading heroes of the Potter books display loyalty, and persistence, and courage, and good-humor. And the characters are constructed as real people who we come to care about. And the books are well-written. And plot matters too–you need to find out what’s going to happen next.
Still, if you want to play the socio-political-economic interpretation game with the Potter books, I suggest the following facts might be relevant. Two of the minor heroes of the books, Fred and George Weasley, are successful entrepreneurs. The heads of the governmental Ministry of Magic are at best ineffectual, dishonest, pompous buffoons. And the seed money for Fred and George’s successful enterprise is provided by that most famous of venture capitalists: Harry Potter.
[Details on WSJ article: Jonathan V. Last. “History According to Harry: Appeasement Fails with Warlocks Too.” Wall Street Journal (Friday, July 15, 2005)]

Economics and Physics

Economists have sometimes been accused of physics-envy, but that is an utterly misleading accusation. Anyone who knows modern physics will testify that physicists care about experimental evidence, about bringing their theories into conformity with the experimental evidence, and very little about rigorous theorems and analytical lemmas. What economists really suffer from is mathematics-envy.

Blaug, Mark. “Not Only an Economist: Autobiographical Reflections of a Historian of Economic Thought.” In Reflections of Eminent Economists, edited by Michael Szenberg and Lall Ramrattan, 71-94. Cheltenham, UK: Edward Elgar, 2004, p. 90.

We economists like to think of our science as akin to physics in its mathematical rigor. Quite by accident, while pursuing some research on stochastic processes, I obtained in 1995 a detailed description of the research being done by tenured and tenure-track members of the Harvard University physics department, ranked that same year in a National Research Council survey as the top physics department in the United States. Analysis of the research

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A Case For School Vouchers in Nebraska

Create a marketplace
The solution to the impasse between Omaha Public Schools and the coalition of suburban school districts is to dissolve all school districts and declare each school an independent entity. Then issue vouchers to students and let them and their parents pick the schools of their choice.
There would be another round of consolidation, just as there was with the Baby Bell telephone companies. But it would be market-driven instead of being dictated by political boundaries.
The beneficiaries would be students and parents who would be free to pick schools offering the best educational value with no restrictions due to place of residence.
That’s real school choice.
Robert Ranney, Omaha

Source: Omaha-World Herald Public Pulse section, July 17, 2005.

Protecting Sugar Industry Doubles Consumer Price for Sugar

RUSSELL ROBERTS: “The bottom line is the price of sugar in the United States is about double what it would be outside the United States in a freer market. That means higher profits for sugar farmers and it means higher prices for U.S. consumers.”
“And it’s not just, of course, for the sugar you sprinkle on your grapefruit. It’s for anything you consume that uses sugar: ketchup, all kinds of processed foods, candy that has higher prices that we don’t see the higher price of sugar hidden in those higher prices.”
Russell Roberts on PBS News Hour, “FARMERS DIFFER OVER CAFTA” July 20, 2005.

Cable about to “get leapfrogged”

We’re playing offense, not defense when competing against the Bells,” says Brian Roberts, chief executive of Comcast, the country’s largest cable operator with over 21 million subscribers.
The technological arms race is further evidence that television is entering a new content- and feature-rich era. Early signs of this transition were the introduction of TiVo and other digital video recorders and video-on-demand services that enable viewers to watch shows whenever they want.
But many more new products and services are in the works by businesses using Internet technology to combine the functions of TVs, computers, the Internet and telephones. Cable has to make sure it doesn’t get leapfrogged. “This is about totally changing this industry,” says Lea Ann Champion, senior vice president of phone giant SBC Communications Inc.

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Medical Studies Frequently Not Confirmed

According to a study published in the July 13, 2005 Journal of the American Medical Association (JAMA) by Dr. John Ioannidis, almost a third of the medical studies included in his sample, were eventually either contradicted by subsequent studies (16%) or else required significant modification. (One media report summarizing the study appears at: http://www.newsday.com/news/health/ny-hsdrug4348592jul19,0,2629446.story?coll=ny-health-headlines)
This is only surprising in the face of the certainty with which the media and parts of the medical establishment, totally embrace each new study as it appears. Perhaps the tentativenss, and revisability of medical research argues for allowing patients more choice in their treatment?

Ethanol Wastes Energy

Cornell ecologist David Pimentel and Berkeley professor of civil and environmental engineering Tad W. Patzek have published a study that shows that, for corn, 29 percent more fossil energy is used in ethanol production, than the energy yielded by the ethanol output. In the Cornell web summary Pimental is quoted as saying: “There is just no energy benefit to using plant biomass for liquid fuel. These strategies are not sustainable.” See: http://www.news.cornell.edu/stories/July05/ethanol.toocostly.ssl.html
Pimentel and Patzek’s study was published in: Natural Resources Research (Vol. 14:1, 65-76).