Quote of the day

For all the physical and life scientists who think they know more economics than economists ... and all the economists who think they know more [X] than [X]-ologists:

The general rule to remember is that if some discipline seems less developed than your own, it’s probably not because the researchers aren’t as smart as you are, it’s because the subject is harder.

-- Paul Krugman

Comments

[tidal]

I don't know... I came to economics with a physics background. Krugman is obviously correct about any number of disciplines talking past each other. But I must say that it is more often economics types that just seem to wave away whole physical realities. E.g., Robert Solow:"If it is very easy to substitute other factors for natural resources, then there is, in principle, no problem. The world can, in effect, get along without natural resources." Yeah, we know what he is alluding to, but it is such a bizarre and absurd abstraction - is it any wonder that earth sciences types get exasperated?

By the way, just out of curiousity's sake, does anyone know if anyone has attempted/published a formal response to Herman Daly's 5 questions of neoclassical economics in 1997?:
1. Do you believe that economic activities must satisfy mass balance?
2. Why is it that neoclassical production functions do not satisfy the condition of mass balance?
3. Do you believe that Georgescu-Roegen’s interpretation of production as physical transformation is correct?
4. Do you agree that the economic system is embedded in the larger environmental system, and totally dependent on it as both source and sink for the matter/energy transformed by economic activity?
5. Do you believe that the matter/energy transformations required by economic activity are constrained by the entropy law?

[joshua corning]

The general rule to remember is that if some discipline seems less developed than your own, it’s probably not because the researchers aren’t as smart as you are, it’s because the subject is harder.

I like how it is a given that research is allowed to develop over time but if the market does not produce instant results that Paul likes it is a failure.

[joshua corning]

By the way, just out of curiousity's sake, does anyone know if anyone has attempted/published a formal response to Herman Daly's 5 questions of neoclassical economics in 1997?:
1. Do you believe that economic activities must satisfy mass balance?
2. Why is it that neoclassical production functions do not satisfy the condition of mass balance?
3. Do you believe that Georgescu-Roegen’s interpretation of production as physical transformation is correct?
4. Do you agree that the economic system is embedded in the larger environmental system, and totally dependent on it as both source and sink for the matter/energy transformed by economic activity?
5. Do you believe that the matter/energy transformations required by economic activity are constrained by the entropy law?

If matter and energy cannot be destroyed then it is impossible to use them up....we can only change them. It is my understanding that science in principle does not make aesthetic or moralistic judgments as to the state of things. It seems that Daly's criticism of neoclassical economics is that like physics it makes no moral or aesthetic judgment on how matter or energy is changed...which seems a bit hypocritical does it not?

Oh wait I forgot he is a physicist and therefor he has better judgment in the aesthetics of the world and a far greater moralist then any economist could be.

[tidal]

If matter and energy cannot be destroyed then it is impossible to use them up....we can only change them. It is my understanding that science in principle does not make aesthetic or moralistic judgments as to the state of things. It seems that Daly's criticism of neoclassical economics is that like physics it makes no moral or aesthetic judgment on how matter or energy is changed...which seems a bit hypocritical does it not?

Oh wait I forgot he is a physicist and therefor he has better judgment in the aesthetics of the world and a far greater moralist then any economist could be.

joshua, without getting into it in much depth, I think you are actually buttressing my point. Physicists particularly, and earth sciences scientists in general, would recognize that not only are matter matter and energy not created or destroyed - but only changed... as you put it... but that the energy and matter is changed such that, net, it is degraded... moved from a low entropy state to an increasingly less-"useful" high entropy state... That reality is well-established, somewhat colloquially recognized in "resource economics" as the "best first"-principle, and perhaps loudly manifesting itself in the current commodity price dislocations... "Science in principle" may not, as you say, "make aesthetic or moralistic judgments as to the state of things" but it certainly DOES make empirical judgements of such things... "Business-as-usual" economic explanations, on the other hand, would see these inexorable entropic transformations, as, well, business-as-usual... without ever actually referencing back to the 1st and 2nd laws of thermodynamics which are driving the process. Irrespective of what "economics" thinks or assumes or presumes or ignores, it obeys thermodynamics, and there is NOTHING "it" (economics) can do about that.. A model of reality that generally fails to acknowledge this is at least open to serious criticism/challenge similar to Daly's simple inquiry...

Daly, by the way and for what it is worth, is an economist.

I am not tossing economics out the window, but I would tell you what horse I would bet on here if forced to choose, having been in both paddocks...

This was not really the gist of Krugman's original post, but I will say that josh's example here of a quick dismissal of Daly's points by simply waving "economics uber physics", despite having an apparently weak grasp of the other discipline, is exactly the kind of behaviour that Krugman is decrying...

[joshua corning]

tidal you are right...we are all in fact dead from starvation and Malthus was right...physics proves it.

[tidal]

bravo joshua... good comeback. predictably substantive as all get out.

[Don]

John: A clever irony by Solow rather than a "bizarre and absurd abstraction." Do note the "If..."

"If it is very easy to substitute other factors for natural resources, then there is, in principle, no problem. The world can, in effect, get along without natural resources."