Thursday, April 28, 2011

Good Riff from Krugman

Paull Krugman is now a joke(see this town hall meeting), but he's clearly a smart guy. I think he just decided that he could do more good shilling for Democrats by any means necessary, and if his intermediate target is helping Democrats, being more evenhanded, or even courteous, may or may not be optimal, it is too early to evaluate. In the long run, I think it hurts his intermediate objective, and more importantly think his long run objective is wrong so he's doomed anyway (in the same way I think those who believe in false Gods are wrong, they won't go where they think they are going).

Here he is in better days. This address he gave to the European Association for Evolutionary Political Economy in 1996 still reads pretty well:

Economics and evolutionary theory are surprisingly similar. It is often asserted that economic theory draws its inspiration from physics, and that it should become more like biology. If that's what you think, you should do two things. First, read a text on evoluationary theory, like John Maynard Smith's Evolutionary Genetics. You will be startled at how much it looks like a textbook on microeconomics. Second, try to explain a simple economic concept, like supply and demand, to a physicist. You will discover that our whole style of thinking, of building up aggregative stories from individual decisions, is not at all the way they think.

So there is a close affinity in method and indeed of intellectual style between economics and evolution. But there is another interesting parallel: both economics and evolution are model-oriented, algebra-heavy subjects that are the subject of intense interest from people who cannot stand algebra. And as a result in each case it is very important to distinguish between the field as it is perceived by outsiders (and portrayed in popular books) and what it is really like. We all know that economics is a field in which the most famous authors are often people who are regarded, with good reason, as not even worth arguing with by almost everyone in the profession. Do you remember that global best-seller The Coming Great Depression of 1990 by Ravi Batra? And I guess it is no secret that even John Kenneth Galbraith, still the public's idea of a great economist, looks to most serious economists like an intellectual dilettante who lacks the patience for hard thinking. Well, the same is true in evolution.

He makes a profound point, that evolutionists dismiss the small-step process of evolution and rather focus on the result. Local maxima are dismissed as simply a lack of imagination.


dmfdmf said...

The more profound point is that the connection between biology/evolution and society/economics is rooted in teleological measurement. Even though it is a cliche, it is true that "time is money" but on a level much deeper than most people suspect. Here is Ayn Rand's insightful comment on teleological measurement.

dmfdmf said...

Forgot to mention; physics and math envy ruined modern econ and turned most economists into morons. But they are very good at math.

Anonymous said...

Economists like Krugman look to most serious non-economists like people with an unjustifiably high regard for their competence, which is characteristic of fields which lack strong feedback.