When the physicists at Santa Fe Institute were developing complexity theory, they invited some economists to offer their input. The physicists were impressed with the economists' mathematical sophistication, but they also observed that they were very ideological and divorced from empiricism when compared to the approach that physicists were accustomed to.
The question on epistemology was telling, and similar to my experiences with economists. They love using maths to add 'complexity' to their analyses, but shy away from epistemological complexity because it's too hard, or would take too long ("we could spend hours and hours discussing all the things that are wrong with the data... I don't have the patience" - well, that's not really an answer).
4:35 "The role of history is that of a reality check." Exactly! Over the years, I've become increasingly disenchanted with theory. I'm sick of hearing what SHOULD be, or what WOULD be if only, . . . I want to know whether socio-political theories like socialism, or economic theories like Keynesianism or Classical Economics, or even the predictions of the Austrian school, actually work as claimed.
the pet rock perfect example of the creation of demand for a given supply now if peace sells any demand also a rare disease creates a demand for a specialty drug for only a handful hoping for more victims and more demand this is where economics is being misused in that healthcare costs are not in administrated costs but in research in otherwords of flesh and bone oh yea lots of blood a small if not deadend demand that has been suppied even against political stance death metal should have died by now it yet lives still will never be a money maker like rap and country pop but suppies a very small demand because death is certain life is not oh yea taxes too
In Iran we study a lot of math and a lot of history. Indeed all institutionalist schools of economics study math, history, history of economic thoughts, economic systems and etc.. a lot. because of the nature of the idea that u should know about the past to determine around the future. Professor Derakhshan, an ex-professor of LSE teaches such stuff in Iran now. And he is not alone, or the instituter.
Can you provide the full name of this professor? I think I read a paper written by him. His understanding of things is really holistic and goes around different perspectives.
Maths is important for theory, which is useful for figuring out how to make the best of the bad situation you've got, but unfortunately it's also useful as a means of propaganda for explaining why problems we face are technical, ignoring the majority of consequential wealth transfer which does not take place in an economy, but rather through use of deception and force... eg, using economics to explain the 07-08 crash will mislead as systemic fraud isn't an economics issue, it's a problem of corruption and lack of law enforcement. Physics works because the universe enforces its laws and doesn't accept bribes to create loopholes or look the other way. When 90% of mortgages are fraudulent, 90% of the data regarding them is corrupt, there's no longer any point plugging that data into a model.
I think that while your comment has its merits, it is based on the flawed assumption that social phenomena such as corruption and fraud are not part of economics proper. Regardless of what method you use, be it mathematical modeling or historical analysis, as long as we continue to view the economy as a distinct sphere within society, we will always end up with a myopic, flawed understanding of economic phenomena.
Economics is not about money , thats the stand point any economist realises , Its a mandate towards achieving the epitone of human endeavour through maximum utilisation of its resources
@@vibhuvikramaditya4576 if you want to study Money there is financial only careers, and business careers. but in my opinion these can be substituted by computers.
@@vibhuvikramaditya4576 Economics is about making the most amount of money for the rich, this is why Milton Friedman called Chile a success even though his policies led to 44% of the people living under the poverty line in 1985 and Chile became one of the most unequal countries on the planet, but hey, the GDP was going up so it a "success". Fast forward to 2019 and one of the biggest mass protests ever over the Neoliberal failed regime.
@@1997lordofdoom You are under ideological possession mate, to top that its obvious you aren't a student of economics, SO WE CANT A DISCOURSE OF WHY ECONOMICS IS NOT WHAT YOU SAID, BECAUSE IN THE END , YOU WON'T BUDGE NO MATTER WHAT BECAUSE YOU ARE NOT STUDYING ECONOMICS, AND ARE NOT AWARE OF THE LOGICAL ARGUMEMTATIVE FRAME-WORK THAT I WOULD VENTURE OUT FOR AN EXTRAPOLATION OF MY WORLD VIEW, Your usage of the word as neo-liberal are a testament to my proposition, WE DONT USE WORD LIKE NEOLIBERAL , WE HAVE THEORY AND EMPERICAL EVIDENCE TO WHAT IS SUGGESTED AS POLICY RECOMMENDATIONS, ECONOMICS STUDIES PARTICIANTS IN AN ECONOMY, BASED IN A SOCIAL ENVIRONMENT, THUS MANY OF TIMES, WE GET CONFLICTING VIEWS ON A NUMBER OF THINGS, IF NEO-LIBERAL MEANS FREE TRADE TO YOU WE HAVE PLEANTY OF EVIDENCE SUCH SOUTH KOREA, SINGAPORE AND INDIA, HOW DECENTRALIZATION AND FREE TRADE LEAD TO ECONOMIC MIRACLES IN ALL OF THEM, THE ROLE OF ECONOMICS IS TO REMAIN OBJECTIVE, WE DONT STUDY IDEOLOGY, WE DONT BELIEVE IN IDEOLOGIES, WE ARE IN SOLE PURSUIT OF TRUTH, THUS IT HAS BEEN FOUND A NUMBER OF TIMES THAT MOST ECONOMISTS HAVE CHANGED THEIR MINDS ON SOME OR OTHER ECONOMIC PHENOMENOM OVER THE YEARS WHEN THEY ARE PRESENTED WITH LOGICAL ARUGMETNS AND EVIDENCE FOR IT
In other words: we have been participating in the production of tremendous abundance ( forget how badly distributed for now) and we have no idea how it really happened. That's encouraging!!!!!...
"Physics envy." So true. Being a huge nerd in the areas of politics and history, the transparently bullshit denial of economics' inherently political and social nature has always irked me. Idk how many times I've read something like "[famous economist]'s ideological disposition might've been awful but I *really* admire their subtle work in econometrics so all and all he was a great economist." Fuck that. The airy and (largely) useless mathematics obsession is fine, just don't pretend it alone gives anyone any insight into the complex construct we call 'the economy.'
Let me put it in a different way. Physics also suffered from this too much "math". Several books are written in criticism of it. "Lost in Beauty" is a title of one. Math seem to give people a simple world of either right or wrong. They are all wrong. Mathematics are not about the calculations and results. It is about the questionings, thinkings and inferings of those calculations. Many economists only did the inferring.
exactly! I study econ when I was a student in NY, fucking NY, which I thought supposed to be down to earth when it comes to econ and finance, but I think it is not math, it is actually statistics. Boy, statistics is subject of scam!. the whole idea of p value and t value, if u took that idea to a real mathematician, or even a math college student, he will tell u thats basically bull shit! logical fallacies. Meanwhile, econ world took that as if they got some gold to prove their hypo.
Calling mathematics, the single most useful tool in economics, to be a "useless obsession" is absurd though it's role is certainly overextended at the moment.
@@Account.for.Comment Generally speaking that's not true. A theory has to be proven either experimentally or observationally for the physics community to accept it as a universal law. This is why Stephen Hawking never got the Nobel prize and string theory remains a hypothesis. Equations in physics are nigh infallible unless there's something wrong with the theory, whereas in economics you get models that contains a bunch of wrong assumptions and doesn't reflect anything on the real world. This is why economists can't predict the 2008 financial crisis while engineers can build bridges that don't collapse and GPS that are so reliable.
A final comment. Some years ago I came across an introductory text on economics written (over several editions) in 1955 by Professor Harry Gunnison Brown, at the time teaching at the University of Missouri, I believe. His textbook contains not a single equation.
@@newaddress456why? What is the function of models? Do they have any explanatory power over real world phenomena? No. Do they produce proof for the existence of causal relationships? No. Do they have any forecasting power? No. At best models can be fitted into a specific data set, in which case all that happens is the characterization of this specific data set in the context of this specific model - nothing about the real world or the phenomena the model is supposed to represent.
Even in first year economics at university my professors were teaching us the models but telling us they were, in essence, worthless for any practical purposes. The models were more historical curiosities than functional.
so interesting.. I never thought about math playing such a fundamental role. While math is perfect, harmonious and beautiful, the reality of the market supply and demand is not. I like to mark this for later viewing, but the "watch later" is missing.
I feel like the point made by Francesco Caselli at 25:06 is the crux of the issue. While Caselli suggests maths and poor assumptions are different issues and so should be separated, if Maths is one of the key ways of checking the logic then it will only be as good as the assumptions input into the formula. However, if ethnography or historiography are used then it is easier to see if the assumptions are flawed.
Exactly, maths is literally just a language conveying logical processes that strive to quantify material reality. Economics can’t be expressed in math because the data is already outdated by the time it’s been analysed and mathematised, notwithstanding the fact that the function of maths is to divorce humans from their subjective perceptions of reality, which is the last thing you want to do in an economic system comprised of human actors.
I’m not an economist, but I think you have a point, Dr. Skidelski, good sir. Even in the mathematics curriculum, there’s not a commonly accepted inclusion of the history of mathematics and that is atrocious. In fact, this is true of most disciplines other than history itself and political science is, I think, almost as good as history itself. I could be not quite correct, as I’m not ah historian or a political scientist- perhaps historians and political scientists would disagree with me and suggest that even in their disciplines, there is not enough “history of history” or “history of political science” in the standard curricula of those disciplines either. In any case, many - far too many - members of society seem to view history as a useless discipline, so they aren’t willing to pay tuition for more history courses than a skeletal minimum for existence in a civil society. This contention of mine applies to students, parents, and accreditation agencies. I worked in Mathematical Logic for my PhD, and my views in that direction were heavily influenced by authors I never personally met, including especially Alan B. Slomson and John Lane Bell. When I was introduced to some of the work of John Bell, I was a student unfamiliar with economics, so it made an impression on me that Bell was listed as affiliated with the London School of Economics.
“The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design. To the naive mind that can conceive of order only as the product of deliberate arrangement, it may seem absurd that in complex conditions order, and adaptation to the unknown, can be achieved more effectively by decentralizing decisions and that a division of authority will actually extend the possibility of overall order. Yet that decentralization actually leads to more information being taken into account.” - F A Hayek
Personally, the key is,say, mathematics is still largely theoretical and more noticeably, quantitative with mechanism. Accordingly, such predominant methodology themed in Occidental world might not address a vast majority of concerns related to humanity, including both psychological and cognitive aspects. As increasingly acknowledged nowadays, such mentioned aspects are anyway indispensable in a whole-ranging socio-economic events. Such is the apparent consideration for history--- one of the most core humanity disciplines, to perform a growing function.
As opposed to an acupuncturist, I would introduce the analogy of the unorthodox boxer. In a boxing tournament, most boxers are right handed, and taught with an orthodox style. This means that on occasion, when they encounter an unorthodox boxer who is left perhaps, or maybe just one of the two, they also encounter extreme difficulty in predicting punches and fight technique. Hence the predictive powers of the orthodox boxer is equal to the normative enforcement of orthodox boxing. Even if the boxer is slightly less skilled, unorthodox style has such a paralysing effect on an orthodox boxers predictive capacity that the playing field is essentially equalled out. Therefore, an orthodox boxers predictive capacity is a self sustained, self regulating system predicated upon the normativity of boxing orthodoxy in a much wider system of predominantly orthodox boxers. A game theorist would say that the unorthodox boxer introduces an aspect of chaos into the system that checks the integrity of the wider system, usually getting very far and doing much damage before the rest of the system can recognise a pattern unique to that single actor. Similarly, rigorous mathematical modelling in economics works very well predictively in things like day trading because the vast majority of day traders are all running algorithmic networks that use the same maths and the same models to inform the same decision making. Every now and then, someone who isn’t doing this or who isn’t very mathematically literate, or even a billionaire shorting a particular market, causes all of these algorithms to be wildly flawed and people lose massive amounts of money. The system is again self sustaining and self regulated, predicated upon the normativity of the use of algorithms to assist day trading. It is also therefore equally subject to massive miscalculations as soon as even a single piece deviates from the set calculations, or even if a variable is at play that isn’t being accounted for, like a brewing international conflict that causes a country to raise its oil prices which then has enormous and fast acting knock on effects, etc., Maths in economics can only do so much, and the larger the scale (the more macro), the more subjective the human decision making becomes and the less maths has anything to do at all with economic occurrences.
Like most debates, this one is premised on a false dichotomy - ie, math OR history. If u want to understand the world, every tool is useful - ie math AND history. The key is just to avoid falling into the trap of valuing just one tool. In general, fields benefit from intellectual and methodological pluralism. Econometricians need to know a little more economic history and economic historians need to know some math. That said, many economists love maths a bit too much. But they don’t need less of it. They just need to appreciate that there are other awesome tools from academia and industry.
the more complex the technological, consumeristic, trade relations, etc. adds to the complexity of an economy, the more we need BOTH math and history, not to mention psychology, anthropology, philosophy, ecology, other hard sciences, and sociology to understand its mechanism AND to solve its problems. why is this not blatantly obvious? because economists are careerists with egos just like lawyers, doctors, officials, professors...and this CAREERISM (left brain reductionist fragmented thinking as well) has trumped "knowledge for the greater good", and this is why I write my own economic vision OUTSIDE of academia and career....I do it for the love of economics and the concern for its usefulness to helping humankind and mother earth
I would add: Too little philosophy. In particular, too little understanding of axiology -- ethics, harmony, and virtue (vis purely abstract beauty and aesthetics). From this it follows -- too little mindfulness of vital values and virtues -- fairness, goodness, kindness, justice, ecuanimity, sensitivity, decency, nobility... We could go deeper: Insufficient (if not null) understanding of basic biology, ecology, and other vital domains -- and their corresponding disciplines and arts (philosophy of~, history of~, art of~ ... and so on).
Thank god someone with a respectable, British accent said it. Economics isn't just math. Psychology and Sociology have outsized roles in determining where money goes, and what happens as a result. Our maths are undeveloped for economics, a system dramatically dependent on people's choices about things like status, survival, and the feel good drugs (Dopamine, Serotonin, Endorphins).
Interesting take but other ecconomists have argued that there isn't enough maths in ecconomics. In particular obsessions with equilibrium when the ecconomy doesn't seem to have a steady state.
there should be an equilibrium but look at MIT & CSE. Both schools use models with heavy math and still botch their predictions. It's prevalent they lack the rational/logic/reasoning in their underlying assumptions and framework which leads to data being over weighted.
Regarding Economics, history is the cornerstoned and central 'essence', mathematical and quantitative methods are most likely the vehicles to fully maximise such essence to contribute to the pragmatic aspects and issues at all levels.
Usage of numbers always adds credibility to one's argument economics is no exception. Only econometric's / statistics allow for data scrutiny and validation which probably would carry limited value unless it comes with empirical data findings. Chicken and egg situation here with any research expected to have numbers if only in a form of an appendixes. This level of detail demonstrates robustness of the social science of the economics where research plays a huge part in building a case for one's argument or helps to answer pertinent project related questions.
And knowing history would tell you about the movements against lending money into circulation in the first place. The Greenbackers and the Chicago school during the 1930s advocated having government issue all money and having banks only lend from term deposits. Even the ancient Roman Republic spent fiat currency into circulation for domestic spending (the nomisma) and used the silver dinar mostly for foreign trade. Yet our knowledge of monetary history is so sketchy that we often have superficial notions that are far from the truth.
I am an econs student and i have been reading history and political science as a side hobby for yeaes now, i also hold a Logistics diploma and worked in hospitality for nearly 4years, so i dont have much of a say in this debate What i can say is that if one takes Economics for Financial purposes or Math for Data Science purposes, one spoils a genuinely good social science course. The actual study of Econonics comes with true appreciation of History, Geograohy, Political Science, Religon, Logistics and so many other subjects. History alone does not solely assist with the study of Econonics, Geography and Politics tend to explain Economics just as efficiently as History, Logistics is the foundation of Supply and Demand of Theory and Religon is the foundation of European History and modern Political thought. Economics will always be the study of things that dosent seem to make sense unless one is well versed in other subjects 🙃 Lastly, Singapore Corruption is low 🤭🤭🤭🤭🤭🤔🤔🤔🤔🤔🤭🤭🤭🤭🤭 I think corruption is either covered up properly on blatantly obvious, Singapore just keeps it in lock and key From a Singaporean 🙃
There is nothing wrong with identifying strong correlation, either. Correlation can be a good predictor, even if a causal mechanism can not be established. In that case we are simply talking about proxy variables.
Late Ronald McKinnon led a team of researchers into the Asian financial crisis of the late 1990s and relied on history to explain it after gathering numerical data.
People don't generally study economics to "understand how economies work". They generally begin the study in order to figure out how to make a living and be successful in business. Academics make a false presumption because economists as they are, generally are hired by governments, which further biases the field because academics pander to support one party or another in order to gain funding in an educational system that has substantially been nationalized.
Begin to get economic materials into classrooms beginning in kindergarten. Teach marketing, making change, effect of interest, taxes, (what and why). Build a foundation of knowledge, ground up.
@@dennisfarris4729 Yes, "Economics is the theory of scarcity.". That's it. It tries to explore what effects the finiteness of energy, matter and labor have on human decision making. That's it. No need to be confused about this. ;-)
@@dennisfarris4729 That's trite. Education is always the starting point for anything. You couldn't even read and write without education. At least you got to that point. Not much further, though.
43:50 From 1991 to 2001 there was an excess death (base 1991) in Russia, for the adult population, estimated between 2.5 and 3 million. The population or Rome, Italy, is currently around 2.8 million people. To be fair, we can't attribute all that excess deat to economists - only a large majority.
"The courage to engage the whole breadth of reason, and not the denial of its grandeur - this is the programme with which a theology grounded in Biblical faith enters into the debates of our time...It is to this great logos, to this breadth of reason, that we invite our partners in the dialogue of cultures. To rediscover it constantly is the great task of the university." ~ Benedict XVI
Prof. Skidelsky made a very good observation at the end: the belief that economic systems can be explained e predicted by simple mecanistic models is wrong.
Economists are scientists. They don't hold beliefs. Every time you meet an "economist" with a belief system (like the folks of the Austrian school), you have simply met a conman. ;-)
its simple use the economic model to generate the most profit and growth applicable to the historical period and country. Thus, increasing the power of the elite.
by idea i meant for example: if i have bread more and the other person have more milk ...i can exchange some bread for milk and vice versa...and maths help to measure it at an optimum manner so that all are are satisfied...
Am I the only one who is the least bit perturbed by the lack of subtitle availability? I feel like although I found the debate interesting and insightful I would have gotten a lot more out of it if I had access to some kind of tool to help me follow along with what they were saying, be it subtitling or even a transcript. There is no education without access.
while my own undergraduate experience was a little like the one described, and I was frustrated by the level of maths I soon began to realise my frustration was born out of my expectations of what I thought economics was or should be, compared to the obvious reality of what it IS. our use of economics and dependency on it as a sole measurement for policy is imo the issue. our expectation of its power is a problem. I feel we have to let economists do economics. let historians do history. sociologists do sociology. psychologists do psychology. it is then with the policy makers to use ALL aspects of social science to draw conclusions. maybe economics is a good "base" or starting point for assumptions, analsysis and implications on policy, but should then evolve through the social sciences for almost like a "validity check". only once it passes through this system should it be introduced as "Policy". we need to drop the one size fits all mentality, the idea an individual discipline can capture the complete complexities we call life, and work together, rather than argue about who is more "academically sound", we should be more concerned about the effect on reality.
Agreed, this is why economics should focus on economic models (that may or may not use math), and historians should study the history of economic thought, along with other social and political aspects of history.
Business Schools teach economics for overspecilization and frame students deliberately NOT to represent the "pluralism".. . Instead we have to be in need of other logics to economics...
Evertime we reduce the chaos of human endeavour to mathematical symbols we must necessarily assume that the extremes are irrelevant, and for every symbol those irrelevancies necessarily multipy.
@@sandworm9528 Pretty much every statistician, economist and mathematician in the last 300 years who works from data acknowleges the point - the maths reflects reality not the other way around, the only Q is to what degree is the maths an accurate reflection.
@@carnivaltym they pay lip service to it and then continue on their merry way doing the exact same thing. Behavioural economics excluded and obviously the work on asymmetric information by Joseph stiglitz. But speaking broadly neoclassical economics works with models necessarily divorced from reality
Morten Jerven has done stunning work on how econometrics got Africa wrong. Yes, the whole continent. People like Paul Collier - who's been wrong about this bc he uses corrupted primary data for calculations, yet dropped all calculations whatsoever when fearmongering about migration - have been "done" by Jerven most thoroughly.
No, we also have sufficient statistics, which is also maths, but have nothing to do with proofs and truths, but everything to do with that complex society and its complex human beings.
![Chris Langan - The Interview THEY Didn't Want You To See - CTMU [Full Version; Timestamps]](http://i.ytimg.com/vi/9miVG2xT5jY/mqdefault.jpg)
"The awareness of the past should make discipline less arrogant and more useful" Beautifully said!
Totally agree with that
And yet somehow economists are less useful and more opinionated with every passing year
Absolutely right ✅️
Medicine and engineering wouldn't have made much progress without studying corpses and crashes. Economics needs to do the same.
I think we are accumulating quite a bit of crash data. We'll probably have to see for another 20 years. In the end, we probably don't want crashes.
useless comment
avor I agree.
Recessions and depressions average about every 7 years in capitalism
Nah this is just plain machiavelism.
When the physicists at Santa Fe Institute were developing complexity theory, they invited some economists to offer their input. The physicists were impressed with the economists' mathematical sophistication, but they also observed that they were very ideological and divorced from empiricism when compared to the approach that physicists were accustomed to.
The "assumptions" of neoclassical models they teach in undergrad all predicate normative attitudes.
@@thomashubbard288 that is largely the burden of the individual professor and faculty.
Do you have a source for this?
Source link please
@@thomashubbard288 no they don't
0:00 Robert Skidelsky
13:40 Francesco Caselli
29:00 Ha-Joon Chang
46:43 Steve Pisckhe
pinkie pie likes econ heh
The question on epistemology was telling, and similar to my experiences with economists. They love using maths to add 'complexity' to their analyses, but shy away from epistemological complexity because it's too hard, or would take too long ("we could spend hours and hours discussing all the things that are wrong with the data... I don't have the patience" - well, that's not really an answer).
Very true and puzzeling. A very strong self-entrenching belief of measurement without theory is a reflection, as pointed out by this last woman.
Ha-Joon Chang's presentation was an absolute banger
The reply to the question at 1:12:09 is simply superb.
4:35 "The role of history is that of a reality check." Exactly! Over the years, I've become increasingly disenchanted with theory. I'm sick of hearing what SHOULD be, or what WOULD be if only, . . . I want to know whether socio-political theories like socialism, or economic theories like Keynesianism or Classical Economics, or even the predictions of the Austrian school, actually work as claimed.
Pretty sure the Austrians are doing well for some time now.
the pet rock perfect example of the creation of demand for a given supply now if peace sells any demand also a rare disease creates a demand for a specialty drug for only a handful hoping for more victims and more demand this is where economics is being misused in that healthcare costs are not in administrated costs but in research in otherwords of flesh and bone oh yea lots of blood a small if not deadend demand that has been suppied even against political stance death metal should have died by now it yet lives still will never be a money maker like rap and country pop but suppies a very small demand because death is certain life is not oh yea taxes too
ruclips.net/video/V-RlmbIzdA4/видео.html
@@VincentFink it's not doing well, it's doing well at fooling people into believing it's true.
You would love Morten Jerven.
Econ impressives non-economists when its propositions are delivered as formulae. Then they give you money. That's why it succeeds.
In Iran we study a lot of math and a lot of history. Indeed all institutionalist schools of economics study math, history, history of economic thoughts, economic systems and etc.. a lot. because of the nature of the idea that u should know about the past to determine around the future. Professor Derakhshan, an ex-professor of LSE teaches such stuff in Iran now. And he is not alone, or the instituter.
Can you provide the full name of this professor? I think I read a paper written by him. His understanding of things is really holistic and goes around different perspectives.
Maths is important for theory, which is useful for figuring out how to make the best of the bad situation you've got, but unfortunately it's also useful as a means of propaganda for explaining why problems we face are technical, ignoring the majority of consequential wealth transfer which does not take place in an economy, but rather through use of deception and force... eg, using economics to explain the 07-08 crash will mislead as systemic fraud isn't an economics issue, it's a problem of corruption and lack of law enforcement. Physics works because the universe enforces its laws and doesn't accept bribes to create loopholes or look the other way. When 90% of mortgages are fraudulent, 90% of the data regarding them is corrupt, there's no longer any point plugging that data into a model.
Excellent explaination!!
I think that while your comment has its merits, it is based on the flawed assumption that social phenomena such as corruption and fraud are not part of economics proper.
Regardless of what method you use, be it mathematical modeling or historical analysis, as long as we continue to view the economy as a distinct sphere within society, we will always end up with a myopic, flawed understanding of economic phenomena.
@@ΧάρηςΚαζάκηςindeed...
Basically, the transition from political economy to economics was a mistake.
@@wirtokyep
"How would studying history compensate for getting money" - how typical of a finance student
Economics is not about money , thats the stand point any economist realises , Its a mandate towards achieving the epitone of human endeavour through maximum utilisation of its resources
@@vibhuvikramaditya4576 if you want to study Money there is financial only careers, and business careers. but in my opinion these can be substituted by computers.
@@vibhuvikramaditya4576 Economics is about making the most amount of money for the rich, this is why Milton Friedman called Chile a success even though his policies led to 44% of the people living under the poverty line in 1985 and Chile became one of the most unequal countries on the planet, but hey, the GDP was going up so it a "success".
Fast forward to 2019 and one of the biggest mass protests ever over the Neoliberal failed regime.
@@1997lordofdoom You are under ideological possession mate, to top that its obvious you aren't a student of economics, SO WE CANT A DISCOURSE OF WHY ECONOMICS IS NOT WHAT YOU SAID, BECAUSE IN THE END , YOU WON'T BUDGE NO MATTER WHAT BECAUSE YOU ARE NOT STUDYING ECONOMICS, AND ARE NOT AWARE OF THE LOGICAL ARGUMEMTATIVE FRAME-WORK THAT I WOULD VENTURE OUT FOR AN EXTRAPOLATION OF MY WORLD VIEW, Your usage of the word as neo-liberal are a testament to my proposition, WE DONT USE WORD LIKE NEOLIBERAL , WE HAVE THEORY AND EMPERICAL EVIDENCE TO WHAT IS SUGGESTED AS POLICY RECOMMENDATIONS, ECONOMICS STUDIES PARTICIANTS IN AN ECONOMY, BASED IN A SOCIAL ENVIRONMENT, THUS MANY OF TIMES, WE GET CONFLICTING VIEWS ON A NUMBER OF THINGS, IF NEO-LIBERAL MEANS FREE TRADE TO YOU WE HAVE PLEANTY OF EVIDENCE SUCH SOUTH KOREA, SINGAPORE AND INDIA, HOW DECENTRALIZATION AND FREE TRADE LEAD TO ECONOMIC MIRACLES IN ALL OF THEM, THE ROLE OF ECONOMICS IS TO REMAIN OBJECTIVE, WE DONT STUDY IDEOLOGY, WE DONT BELIEVE IN IDEOLOGIES, WE ARE IN SOLE PURSUIT OF TRUTH, THUS IT HAS BEEN FOUND A NUMBER OF TIMES THAT MOST ECONOMISTS HAVE CHANGED THEIR MINDS ON SOME OR OTHER ECONOMIC PHENOMENOM OVER THE YEARS WHEN THEY ARE PRESENTED WITH LOGICAL ARUGMETNS AND EVIDENCE FOR IT
@@1997lordofdoom economics about making money for the rich? Bro, shut up and go read a book.
In other words: we have been participating in the production of tremendous abundance ( forget how badly distributed for now) and we have no idea how it really happened. That's encouraging!!!!!...
"Physics envy." So true. Being a huge nerd in the areas of politics and history, the transparently bullshit denial of economics' inherently political and social nature has always irked me. Idk how many times I've read something like "[famous economist]'s ideological disposition might've been awful but I *really* admire their subtle work in econometrics so all and all he was a great economist." Fuck that. The airy and (largely) useless mathematics obsession is fine, just don't pretend it alone gives anyone any insight into the complex construct we call 'the economy.'
Let me put it in a different way. Physics also suffered from this too much "math". Several books are written in criticism of it. "Lost in Beauty" is a title of one. Math seem to give people a simple world of either right or wrong. They are all wrong. Mathematics are not about the calculations and results. It is about the questionings, thinkings and inferings of those calculations. Many economists only did the inferring.
exactly! I study econ when I was a student in NY, fucking NY, which I thought supposed to be down to earth when it comes to econ and finance, but I think it is not math, it is actually statistics. Boy, statistics is subject of scam!. the whole idea of p value and t value, if u took that idea to a real mathematician, or even a math college student, he will tell u thats basically bull shit! logical fallacies. Meanwhile, econ world took that as if they got some gold to prove their hypo.
Calling mathematics, the single most useful tool in economics, to be a "useless obsession" is absurd though it's role is certainly overextended at the moment.
You should read Marx lol, I think you’d appreciate it
@@Account.for.Comment Generally speaking that's not true. A theory has to be proven either experimentally or observationally for the physics community to accept it as a universal law. This is why Stephen Hawking never got the Nobel prize and string theory remains a hypothesis. Equations in physics are nigh infallible unless there's something wrong with the theory, whereas in economics you get models that contains a bunch of wrong assumptions and doesn't reflect anything on the real world. This is why economists can't predict the 2008 financial crisis while engineers can build bridges that don't collapse and GPS that are so reliable.
A final comment. Some years ago I came across an introductory text on economics written (over several editions) in 1955 by Professor Harry Gunnison Brown, at the time teaching at the University of Missouri, I believe. His textbook contains not a single equation.
there is only one single equation in Schumpeter's The Theory of Economic Development
I think mathematical modeling is important, but we need history to as this guy said to get a reality check in the models themselves.
We need both.
And philosophy. And common sense. And love.
@@newaddress456why? What is the function of models? Do they have any explanatory power over real world phenomena? No. Do they produce proof for the existence of causal relationships? No. Do they have any forecasting power? No.
At best models can be fitted into a specific data set, in which case all that happens is the characterization of this specific data set in the context of this specific model - nothing about the real world or the phenomena the model is supposed to represent.
@@ΧάρηςΚαζάκης prediction is forever better than nothing
Even in first year economics at university my professors were teaching us the models but telling us they were, in essence, worthless for any practical purposes. The models were more historical curiosities than functional.
1:26:02 that’s exactly what the entire study of economics SHOULD be. An unending discussion of what is wrong with the data.
On evidence and not on who has the strongest convictions. The lady made her strong point!👍
so interesting.. I never thought about math playing such a fundamental role. While math is perfect, harmonious and beautiful, the reality of the market supply and demand is not. I like to mark this for later viewing, but the "watch later" is missing.
The LSE is finally arrived at what the Austrian School said a long time ago.
I feel like the point made by Francesco Caselli at 25:06 is the crux of the issue. While Caselli suggests maths and poor assumptions are different issues and so should be separated, if Maths is one of the key ways of checking the logic then it will only be as good as the assumptions input into the formula. However, if ethnography or historiography are used then it is easier to see if the assumptions are flawed.
Exactly, maths is literally just a language conveying logical processes that strive to quantify material reality. Economics can’t be expressed in math because the data is already outdated by the time it’s been analysed and mathematised, notwithstanding the fact that the function of maths is to divorce humans from their subjective perceptions of reality, which is the last thing you want to do in an economic system comprised of human actors.
very powerful opening statement
I’m not an economist, but I think you have a point, Dr. Skidelski, good sir. Even in the mathematics curriculum, there’s not a commonly accepted inclusion of the history of mathematics and that is atrocious.
In fact, this is true of most disciplines other than history itself and political science is, I think, almost as good as history itself. I could be not quite correct, as I’m not ah historian or a political scientist- perhaps historians and political scientists would disagree with me and suggest that even in their disciplines, there is not enough “history of history” or “history of political science” in the standard curricula of those disciplines either.
In any case, many - far too many - members of society seem to view history as a useless discipline, so they aren’t willing to pay tuition for more history courses than a skeletal minimum for existence in a civil society. This contention of mine applies to students, parents, and accreditation agencies.
I worked in Mathematical Logic for my PhD, and my views in that direction were heavily influenced by authors I never personally met, including especially Alan B. Slomson and John Lane Bell. When I was introduced to some of the work of John Bell, I was a student unfamiliar with economics, so it made an impression on me that Bell was listed as affiliated with the London School of Economics.
Guess that's a valid reason to apply to economic history :)
“The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design. To the naive mind that can conceive of order only as the product of deliberate arrangement, it may seem absurd that in complex conditions order, and adaptation to the unknown, can be achieved more effectively by decentralizing decisions and that a division of authority will actually extend the possibility of overall order. Yet that decentralization actually leads to more information being taken into account.” - F A Hayek
Great talk, but I wouldnt call an introduction to statistics and a course on convex optimization "too much maths".
Ha Joon Chang is one of the greatest minds on the planet right now
Me too
Ha Joon change is awesome
No he isn't.
Too few ethics. Economics should not be separated from the needs of families.
Personally, the key is,say, mathematics is still largely theoretical and more noticeably, quantitative with mechanism. Accordingly, such predominant methodology themed in Occidental world might not address a vast majority of concerns related to humanity, including both psychological and cognitive aspects. As increasingly acknowledged nowadays, such mentioned aspects are anyway indispensable in a whole-ranging socio-economic events. Such is the apparent consideration for history--- one of the most core humanity disciplines, to perform a growing function.
As opposed to an acupuncturist, I would introduce the analogy of the unorthodox boxer. In a boxing tournament, most boxers are right handed, and taught with an orthodox style. This means that on occasion, when they encounter an unorthodox boxer who is left perhaps, or maybe just one of the two, they also encounter extreme difficulty in predicting punches and fight technique. Hence the predictive powers of the orthodox boxer is equal to the normative enforcement of orthodox boxing. Even if the boxer is slightly less skilled, unorthodox style has such a paralysing effect on an orthodox boxers predictive capacity that the playing field is essentially equalled out. Therefore, an orthodox boxers predictive capacity is a self sustained, self regulating system predicated upon the normativity of boxing orthodoxy in a much wider system of predominantly orthodox boxers. A game theorist would say that the unorthodox boxer introduces an aspect of chaos into the system that checks the integrity of the wider system, usually getting very far and doing much damage before the rest of the system can recognise a pattern unique to that single actor. Similarly, rigorous mathematical modelling in economics works very well predictively in things like day trading because the vast majority of day traders are all running algorithmic networks that use the same maths and the same models to inform the same decision making. Every now and then, someone who isn’t doing this or who isn’t very mathematically literate, or even a billionaire shorting a particular market, causes all of these algorithms to be wildly flawed and people lose massive amounts of money. The system is again self sustaining and self regulated, predicated upon the normativity of the use of algorithms to assist day trading. It is also therefore equally subject to massive miscalculations as soon as even a single piece deviates from the set calculations, or even if a variable is at play that isn’t being accounted for, like a brewing international conflict that causes a country to raise its oil prices which then has enormous and fast acting knock on effects, etc., Maths in economics can only do so much, and the larger the scale (the more macro), the more subjective the human decision making becomes and the less maths has anything to do at all with economic occurrences.
This was crucial. Thank you.
Like most debates, this one is premised on a false dichotomy - ie, math OR history. If u want to understand the world, every tool is useful - ie math AND history. The key is just to avoid falling into the trap of valuing just one tool. In general, fields benefit from intellectual and methodological pluralism. Econometricians need to know a little more economic history and economic historians need to know some math. That said, many economists love maths a bit too much. But they don’t need less of it. They just need to appreciate that there are other awesome tools from academia and industry.
the more complex the technological, consumeristic, trade relations, etc. adds to the complexity of an economy, the more we need BOTH math and history, not to mention psychology, anthropology, philosophy, ecology, other hard sciences, and sociology to understand its mechanism AND to solve its problems. why is this not blatantly obvious? because economists are careerists with egos just like lawyers, doctors, officials, professors...and this CAREERISM (left brain reductionist fragmented thinking as well) has trumped "knowledge for the greater good", and this is why I write my own economic vision OUTSIDE of academia and career....I do it for the love of economics and the concern for its usefulness to helping humankind and mother earth
I would add: Too little philosophy. In particular, too little understanding of axiology -- ethics, harmony, and virtue (vis purely abstract beauty and aesthetics).
From this it follows -- too little mindfulness of vital values and virtues -- fairness, goodness, kindness, justice, ecuanimity, sensitivity, decency, nobility...
We could go deeper: Insufficient (if not null) understanding of basic biology, ecology, and other vital domains -- and their corresponding disciplines and arts (philosophy of~, history of~, art of~ ... and so on).
Thank god someone with a respectable, British accent said it. Economics isn't just math. Psychology and Sociology have outsized roles in determining where money goes, and what happens as a result. Our maths are undeveloped for economics, a system dramatically dependent on people's choices about things like status, survival, and the feel good drugs (Dopamine, Serotonin, Endorphins).
Wonderful discussion
Interesting take but other ecconomists have argued that there isn't enough maths in ecconomics. In particular obsessions with equilibrium when the ecconomy doesn't seem to have a steady state.
there should be an equilibrium but look at MIT & CSE. Both schools use models with heavy math and still botch their predictions. It's prevalent they lack the rational/logic/reasoning in their underlying assumptions and framework which leads to data being over weighted.
True, in either case one must prioritize function and pragmatism, which current mathematical approaches lack
You can prove anything you want with math and still be dead wrong because your model / initial assumptions are completely divorced from reality.
thank you so much for the presentation. so refreshing.
Regarding Economics, history is the cornerstoned and central 'essence', mathematical and quantitative methods are most likely the vehicles to fully maximise such essence to contribute to the pragmatic aspects and issues at all levels.
History, no doubt is important, Economics without mathematics would be like a princess without a crown. Mathematics adds beauty to Economic theory.
Maybe, but to physics it adds function. Maybe now you see the problem
So good. Thanks for sharing 🙏
So what was the rough split of the vote at the end?
+BeGunNer Hi, the votes were not counted but the split was roughly 60-40 in favour of the motion.
Great presentation!
Usage of numbers always adds credibility to one's argument economics is no exception. Only econometric's / statistics allow for data scrutiny and validation which probably would carry limited value unless it comes with empirical data findings. Chicken and egg situation here with any research expected to have numbers if only in a form of an appendixes. This level of detail demonstrates robustness of the social science of the economics where research plays a huge part in building a case for one's argument or helps to answer pertinent project related questions.
Ha-Joon Chang just melted my face 😮
1:22:00, the acupuncture argument nicely dismantled by the two maths guys. says it all
Never thought about Singapore like this...
Absolutely brilliant!!!!
What an awesome session!
Brilliant first lecture.
Excellent analysis sir thanks
That first question about interest rates was typical of a modern economics student. Cringe-worthy
And knowing history would tell you about the movements against lending money into circulation in the first place. The Greenbackers and the Chicago school during the 1930s advocated having government issue all money and having banks only lend from term deposits. Even the ancient Roman Republic spent fiat currency into circulation for domestic spending (the nomisma) and used the silver dinar mostly for foreign trade. Yet our knowledge of monetary history is so sketchy that we often have superficial notions that are far from the truth.
@@dansullivan0 bingo
now let's do one on philosophy.
I am an econs student and i have been reading history and political science as a side hobby for yeaes now, i also hold a Logistics diploma and worked in hospitality for nearly 4years, so i dont have much of a say in this debate
What i can say is that if one takes Economics for Financial purposes or Math for Data Science purposes, one spoils a genuinely good social science course.
The actual study of Econonics comes with true appreciation of History, Geograohy, Political Science, Religon, Logistics and so many other subjects. History alone does not solely assist with the study of Econonics, Geography and Politics tend to explain Economics just as efficiently as History, Logistics is the foundation of Supply and Demand of Theory and Religon is the foundation of European History and modern Political thought. Economics will always be the study of things that dosent seem to make sense unless one is well versed in other subjects 🙃
Lastly, Singapore Corruption is low 🤭🤭🤭🤭🤭🤔🤔🤔🤔🤔🤭🤭🤭🤭🤭
I think corruption is either covered up properly on blatantly obvious, Singapore just keeps it in lock and key
From a Singaporean 🙃
Nicely said
Not too much maths, but too much econometrics. Many researchers just find two variables and regress them, this is the best way for quick publications,
There is nothing wrong with identifying strong correlation, either. Correlation can be a good predictor, even if a causal mechanism can not be established. In that case we are simply talking about proxy variables.
So it seems that the students voted against the proposition at the end? If so, we are doomed…
Recruitment went wrong.
Spitting BARS!
Late Ronald McKinnon led a team of researchers into the Asian financial crisis of the late 1990s and relied on history to explain it after gathering numerical data.
So he was basically just bullshitting. ;-)
Simply Brilliant!
People don't generally study economics to "understand how economies work". They generally begin the study in order to figure out how to make a living and be successful in business.
Academics make a false presumption because economists as they are, generally are hired by governments, which further biases the field because academics pander to support one party or another in order to gain funding in an educational system that has substantially been nationalized.
can we get the presentation slides of this lecture ???
The capital and labour cannot be separated.
The social system is not "too complex for reliable proofs", but rather prescientific, awaiting a paradigm breakthrough.
32:50 See the book Schumpeterian Analysis of Economic Catch-up by Kuen Lee for an interesting scholarly exposition on that joke
And too little questioning about the assumptions on which maths applied to economics are based.
Begin to get economic materials into classrooms beginning in kindergarten.
Teach marketing, making change, effect of interest, taxes, (what and why).
Build a foundation of knowledge, ground up.
None of that has anything to do with economics. Economics is the theory of scarcity.
@@schmetterling4477 duhhhhhhh, I was thinking about the actual action as it effects reality.
The study of you see.
@@dennisfarris4729 Yes, "Economics is the theory of scarcity.". That's it. It tries to explore what effects the finiteness of energy, matter and labor have on human decision making. That's it. No need to be confused about this. ;-)
@@schmetterling4477 seems a shocking lack of ability to read here ...
My point on how education could advance the study ...
@@dennisfarris4729 That's trite. Education is always the starting point for anything. You couldn't even read and write without education. At least you got to that point. Not much further, though.
Very informative fight
I didn't watch much yet, but I already think he's brilliant!
Already, a great first 8 minutes.
Let them have a discussion between each other for gods sake. The moderator keeps on stopping them from doing so.
43:50 From 1991 to 2001 there was an excess death (base 1991) in Russia, for the adult population, estimated between 2.5 and 3 million. The population or Rome, Italy, is currently around 2.8 million people. To be fair, we can't attribute all that excess deat to economists - only a large majority.
"The courage to engage the whole breadth of reason, and not the denial of its grandeur - this is the programme with which a theology grounded in Biblical faith enters into the debates of our time...It is to this great logos, to this breadth of reason, that we invite our partners in the dialogue of cultures.
To rediscover it constantly is the great task of the university." ~ Benedict XVI
How about economists hindering the development of a country? I'm talking about international trade and the concept of "better off"?
Prof. Skidelsky made a very good observation at the end: the belief that economic systems can be explained e predicted by simple mecanistic models is wrong.
Economists are scientists. They don't hold beliefs. Every time you meet an "economist" with a belief system (like the folks of the Austrian school), you have simply met a conman. ;-)
Fantastic 👏
if wages go up people choose leisure- why are they saying this as if its a negative. Any other field would view this as a quality of life improvement.
Iam fucked up with calculus and optimizations but it's genuinely important for 4 model data
its simple use the economic model to generate the most profit and growth applicable to the historical period and country. Thus, increasing the power of the elite.
does anyone have notes for this?
by idea i meant for example: if i have bread more and the other person have more milk ...i can exchange some bread for milk and vice versa...and maths help to measure it at an optimum manner so that all are are satisfied...
Or yes there is mathematical manipulations
The host of show needs to let these professors debate, and control the debates, not be dismissive.
Many things define economy two of them are political decisions and society if one of this change the rest also change
Majestic!
Am I the only one who is the least bit perturbed by the lack of subtitle availability? I feel like although I found the debate interesting and insightful I would have gotten a lot more out of it if I had access to some kind of tool to help me follow along with what they were saying, be it subtitling or even a transcript. There is no education without access.
while my own undergraduate experience was a little like the one described, and I was frustrated by the level of maths I soon began to realise my frustration was born out of my expectations of what I thought economics was or should be, compared to the obvious reality of what it IS.
our use of economics and dependency on it as a sole measurement for policy is imo the issue. our expectation of its power is a problem.
I feel we have to let economists do economics. let historians do history. sociologists do sociology. psychologists do psychology. it is then with the policy makers to use ALL aspects of social science to draw conclusions. maybe economics is a good "base" or starting point for assumptions, analsysis and implications on policy, but should then evolve through the social sciences for almost like a "validity check".
only once it passes through this system should it be introduced as "Policy".
we need to drop the one size fits all mentality, the idea an individual discipline can capture the complete complexities we call life, and work together, rather than argue about who is more "academically sound", we should be more concerned about the effect on reality.
Agreed, this is why economics should focus on economic models (that may or may not use math), and historians should study the history of economic thought, along with other social and political aspects of history.
Business Schools teach economics for overspecilization and frame students deliberately NOT to represent the "pluralism".. . Instead we have to be in need of other logics to economics...
too little emphasis on the effects of financing the economy. understanding credit is not well presented and thus misleading.
I heard a finance expert explain that once he saw the biological enviromental reality of finance he now calls it energy laundering
I wish there should be subtitles added by default.
Brilliant
Evertime we reduce the chaos of human endeavour to mathematical symbols we must necessarily assume that the extremes are irrelevant, and for every symbol those irrelevancies necessarily multipy.
Who said that
@@sandworm9528 Pretty much every statistician, economist and mathematician in the last 300 years who works from data acknowleges the point - the maths reflects reality not the other way around, the only Q is to what degree is the maths an accurate reflection.
@@carnivaltym they pay lip service to it and then continue on their merry way doing the exact same thing. Behavioural economics excluded and obviously the work on asymmetric information by Joseph stiglitz. But speaking broadly neoclassical economics works with models necessarily divorced from reality
Morten Jerven has done stunning work on how econometrics got Africa wrong. Yes, the whole continent. People like Paul Collier - who's been wrong about this bc he uses corrupted primary data for calculations, yet dropped all calculations whatsoever when fearmongering about migration - have been "done" by Jerven most thoroughly.
Continuing the tradition of economist disagreement
The same could be said of public education
Who won??
I have a feeling that no economist has sofar property understood how economies work and why change.
1:22:24 Red Herring and Ad Hominem.
There can never be = in the real economic world
No, we also have sufficient statistics, which is also maths, but have nothing to do with proofs and truths, but everything to do with that complex society and its complex human beings.