econ nobel

Wojtek Sokolowski sokol at
Wed Oct 11 13:15:35 PDT 2000

At 12:53 PM 10/11/00 -0400, Doug quoted:
>academy said by way of example. "Prior to McFadden's contributions,
>empirical studies of such choices lacked a foundation in economic
>theory. Evolving from a new theory of discrete choice, the
>statistical methods developed by McFadden have transformed empirical


Prior to McFadden's contribution facts were inconsistent with the infallible economic theory. McFadden invented a gimmick (or a "problemshift" in Imre Lakatos' lingo) to massage the facts so they do.

This is an important contribution, because economic theory is a form of managerial ideology that creates an illusion that captains of industry and people who call themselves government know what they are doing and are fully in charge of the situation. The facts that are inconsistent with the theory undermine that illusion and thus must be assimilated.

Indeed, as John Kenneth Galbraith aptly observed, economics is the business of providing needed conclusions to those in the position to pay for them. That is why they have a "Nobel" prize in economics and not, say, in social sociences or, heaven-forbid, sociology whose main business is debunking such needed conclusions (or "translating" them as C Wright Mills used to say).


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