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Economics and ontology. IV:last remarks

All right, let us accept for the sake of argument that Economics has not changed the world because it cannot do it unless it recognizes the world is as Lawson thinks it is. Furthemore let also grant that many of us enter the field to change the world for the better and to avoid the marginalization of any human being. Let me now offer a couple of examples that purport to suggest that Lawson´s ontology doesn´t offer a clear suggestion of how to do it.

First example. My mother asks my advice about whether to buy a new finantial product designed for the elderly. What shall I do?. Shall I explain to her that she is old and a female, and therefore poorly situated to fight th local bank appetite to “exploit” her, or shall I try to price the new product according to Balack-Scholes formula which I happen to know as a mainstream economist? The answer is that short of doing both I certainly should advice her according to my uprisal of the quality of the finacial product offered to her.

Second example. Many of us we want to reduce personal income inequality in the world. Shall I voice in my highest pitch that exploitation is there in spite of the generalization of markets or may be because of it, or shall I fight for significant increases in educational public expenditures in spite of my doubts about certain econometric misspefications?. I know the answer. Don´t you?

Let me close these comments on the memorable visit of Tony Lawson to the UAM with an almost litteray remark. Each time I tried to challenge Tony´s examples pointing to mainstrean economic´s results that could answer his qualms, he would reply with a conmisarate “it is not that, it isn´t that”. I had experienced this attitude before but whre? O. K. I remember . It is the answer I always got from my friend Alfonso Dubois each time I came up with a simple explanation of his convoluted thories aimed at explainig underdevelopment: “it isn´t that; keep searching!”

It can be very exasparating indeed but, mind you, my friend´s insatisfaction kept me going. Thus I thank Tony Lawson´s for his challenging intelectual project. It will keep me going.

Well, may be this means that this little saga on ontology may continue. We will see.

«Economics and ontology. IV:last remarks» recibió 0 desde que se publicó el Jueves 27 de Abril de 2006 . Si te ha gustado este post quizá te gusten otros posts escritos por Juan Urrutia.

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  1. davidr dice:

    It is interesting to consider, even for non economists, the theoretical applicability of mathematics as a language with which to describe social phenomena. Using ‘theoretical’ I am asking ‘Are social phenomena inherently mathematical?’ rather than ‘Should current economic research be sceptical of mathematical formalism for its own sake, given recent failures?’. In this light, the question quickly moves into the reductionism vs holism debate. It happens that today I feel reductionist, so I will say, social phenomena are physical phenomena, and are ultimately governed by physical law, whose descriptions are mathematical. Therefore, social phenomena should be in principle describable mathematically, however hugely complex that may turn out to be in practice (Note that I am implicitly assuming the strong AI thesis, I have not ignored godel/halting)

    On a more practical note, and consistent with the above principle, I see economic theory going the way of complex systems research, using mathematics but acknowledging the huge complexity at hand, therefore including computational techniques as part of empirical process.

  2. Juan Urrutia dice:

    My position is this. First I don´t have the slightest idea whether or not the social realm or the economic subsystem is inherently mathematical or not. Neither I think the qwestion can be answered with any measurable degree of precission. Second I do believe that the use of mathematics is extremely useful in order to derive all the implications of any particular idea one might have had. This, of course, does not mean that econometrics is necessarily precise since there is structural cuts, but econometricians are workinon that. Third, because of this and because economics does not exhaust his content in market economies, systems analysis and all kind of new ideas in computational economics are, I think, very promising, but is computational science mathematics. I´d rather say is more related to language.Fourth my interest in ontology is more related to the question of individualism vs holism which is indeed, related to the reductionism debate. Howevwe they are not the same. I do not cara much whether or not macro economics can completely be reduced to individual rationality. The interesting point seems to me is just the oppsite. That is How can somethig called individual can be thought of as emerging from the group or tribe.

  3. davidr dice:

    No, the question of whether social phenomena are inherently mathematical cannot be answered precisely, which is why it belongs to the realm of philosophy rather than science. Still, it seems a relevant question given that economics is considered by many as suspect of suffering from physics envy.

    I dont quite understand your point about complex systems research/complexity theory being about language.

    The top down approach that holds the individual as something explainable from society is characteristically holistic and typical of complexity theory which I mentioned in my last post. However, I would hardly use the word emergent for this “information flow” as it normally refers to the exact opposite.

  4. Juan Urrutia dice:

    It is as if philosophy would concentrate on unanswerable questions. I cannot believe it. As for the Phisics envy I thik it is just rubish. Sorry.

    Complexity is about algorithms and these artifacts are a sort of language.Besides I do not understand the possible relationship between complexity and the possible explanation of the individual starting from the hole society.

    Quite right.The interesting thing ids to explain the emergenge of the individual fron society and not the other way around. I can have all the right convolutions in my brain and still not to be an individual as such but a simple member of the tribe.

  5. davidr dice:

    Well, I wont go into this, it reminds me of tractatus 4.003 (one of my favourites).

    Heh, you dont have tell _me_ that you’re sorry, I have no opinion on physics envy as applicable in this particular case. I am merely citing this term as it is recurring in the discussion and relates to lawson’s view.

    Complexity theory/Complex systems research is not “about algorithms”. Although the use of computing in investigating complex systems is frequent, it is a consequence of the mathematical form of the diverse phenomena under investigation, that in fact define the field (to a degree, it’s broad). See for example complex adaptive systems re your question, and its direct relevance to the matter.

  6. Juan Urrutia dice:

    I feel shy about Complexity. I have never known quite well what the hell it is. On can defeine it in several different ways, but i have alwyas favoured the defntion that stresses the imposibility of coming to an end of a particular algrithmic comutation in finite time.
    But as ar as ontology is concerned I think that we ouhght to know whether an algorith is mathematics or language. If it is mathematics I´d Say Lawson is wrong and you can do good Economicas with mathematis. If it is language Lawson mignt be right and you could comprehend the deep nature of things provides you hit upon the nice algorith.

  7. davidr dice:

    I can definitiely understand where youre coming from, because the field is broad and diverse, and not easy to define.

    Given that I am no specialist (I do have direct
    experience with nonlinear dynamical systems in
    physics), my simplistic definition of complex systems
    research is: the investigation of phenomena composed
    of many parts that are related in nonlinear ways.
    The nonlinear nature of the mathematics describing these systems, and the large number of interacting elements, make them difficult to treat
    analytically, and computers become
    useful. However, and this is why I stress that
    complexity is not about algorithms, the use of
    computers is simply as tools to treat equations
    numerically, given that they are intractable
    otherwise. Thus, what really defines complexity is the nature of the underlying mathematics and form of the phenomena, not the fact that computers are used, however pervasively. I would also add (more loosely) that complexity theory as a practice includes methodological holism, and that emergence and top-down feedback are recurring themes.

    Finally, because systems composed of many parts
    coupled in nonlinear ways are very common in
    nature, it turns out that complexity theory is widely
    applicable + diverse. It is my belief that social phenomena, and therefore economics is well suited to at least trying to apply the same principles
    (eg http://www.psych.lse.ac.uk/complexity/)

    regards

  8. Juan Urrutia dice:

    Let see if I can make sense.Lets go back to the Lawson´s Ontology. He says that Economics cannot be treated mathematically because it is an open system. Sice I think-contrary to Lawson- that comlex systms are open systems and can be treated mathematically, it must be the case that Economics can be traeted mathematically.

    Now, one has a differnt picture of what is a complex system depending on one´s field of intrest. Coming from economics I tend to think that the complex systems are non computable systems. We try then to use mathematics to prove some thorems about the possibilty of approximate solutions. Once proved we can proceed to use an algorithm to approximate kowing that no solution can be exactly found in finite time.

    The algorhim as such is mathematical but plays the role of language. This is why I say that in these non computable and open cases one can argue that mathematics are not being applied.

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