Volatitily as social flaring

Doug Henwood dhenwood at panix.com
Sun Feb 18 13:22:45 PST 2001


J. Barkley Rosser, Jr. wrote:


> If you are implying that the only use of such analysis is to
>make money, well, I am not going to do that, although there are
>plenty of people who are using such approaches to try to do so.
>But, frankly, I thought it would be preferable to make an ironic
>wisecrack rather than go through all this stuff again.

What I said was that I understand pursuing this sort of analysis if your goal was to beat the market and make money. What I didn't understand is what chaos theory tells you that simpler forms of analysis don't. I still don't.

Clearly, I like social statistics. I think they can tell you a lot. But they're forms of description that illuminate social reality in ways that prose doesn't necessarily. Income distribution stats can tell you something about whether the rich are getting richer, and the poor are getting poorer. Empirical work like Card and Krueger's on the minimum wage is also extremely useful; it refuted, fairly strongly, conventional claims about the minwage's job-destroying powers.


>I am not, however, going to get
>into a general discussion of math in econ other than
>to say that you really cannot seriously do econ today
>without math.

Well, yes. But that says more about how the discipline polices itself than anything about the intellectual contribution of math. Aside from serving as the token of initiation, heavy math gives the practitioner of conventional economics the illusion of mastery over complex material. It's also helped depoliticize the practice of economics and to isolate it from other disciplines.

Somehwere Joan Robinson said that econ likes to think of itself as the hardest of the social sciences, but next to physics it's like astrology. Have things really changed that much in the 40 or so years since she said that?

Doug



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