'Too much Maths, too little History: The problem of Economics'

This is a recording of the debate hosted by the LSE Economic History Department, in collaboration with the LSESU Economic History Society and the LSESU Economics Society.

Speakers:
Proposition Team - Lord Robert Skidelsky & Dr. Ha-Joon Chang
Opposition Team - Prof. Steve Pisckhe & Prof. Francesco Caselli
Chair - Professor James Foreman-Peck

The LSE is currently the only institution to have a separate EH department. We want to encourage students and academics alike to rethink the methodologies used to explain how our world works.

Do we use the theoretical and econometrical method to create models with assumptions to distil the complexities of human nature and produce measurable results? Or do we use the historical process of considering all factors to provide a more holistic explanation? More importantly, which method should be adopted to better understand increasingly complex economic phenomena in the future?

We are striving to provide our students breadth that exceeds their current theoretical studies. Hence, whilst we recognise the importance of economic history in allowing us to become closer to the truth and produce more intricate portrayal of events, the significance of models and mathematics remains to be emphasised.

Indeed, we wish to have this controversially named debate in order to both highlight the tension between the two disciplines and to produce a more nuanced overview in defence of the future of Economics.

[Zara_Luna]

"The awareness of the past should make discipline less arrogant and more useful" Beautifully said!

[avroB]

Medicine and engineering wouldn't have made much progress without studying corpses and crashes. Economics needs to do the same.

[michaels]

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.

[阿陽-jw]

0:00 Robert Skidelsky
13:40 Francesco Caselli
29:00 Ha-Joon Chang
46:43 Steve Pisckhe

[AA-ecmg]

"How would studying history compensate for getting money" - how typical of a finance student

[cuttingbored]

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).

[nextyrannis]

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.

[annoloki]

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.

[s_de-xr]

Ha-Joon Chang's presentation was an absolute banger

[kilpatrickkirksimmons]

"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.'

[nicolasceronm.]

The reply to the question at 1:12:09 is simply superb.

[mcmxli-bytj]

Econ impressives non-economists when its propositions are delivered as formulae. Then they give you money. That's why it succeeds.

[aleyzeeo-aleyzee]

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.

[piewert]

1:26:02 that’s exactly what the entire study of economics SHOULD be. An unending discussion of what is wrong with the data.

[jacobshemka]

I think mathematical modeling is important, but we need history to as this guy said to get a reality check in the models themselves.

[FromTheHeart]

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

[nthperson]

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.

[DeanGransar]

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.

[jakesmaje]

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.

[writerightmathnation]

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.