To pull a line of Doug Hagler’s again which I quoted below:
Everyone treats economics as a science, which in our culture, means a truth-discerning and truth-telling method, when it is in fact a value system of subjective measurement.
This is all the truer because of the nature of the math underlying economics, as the UK’s John Adams points out:
The mathematically trained “rocket scientists” in the City and Wall Street have been engaged in a financial arms race. They have been extravagantly rewarded for devising the clever financial “instruments” that are so clever that no one, themselves included, understands them.Almost 20 years ago, in Does God Play Dice?—The Mathematics of Chaos, Ian Stewart observed: “because we are part of the universe, our effort to predict it may interfere with what it was going to do. This kind of problem gets very hairy and I don’t want to pursue what may well be an infinite regress: I don’t know how a computer would function if its constituent atoms were affected by the results of its own computations.”The bubble of bad debt now distributed globally presents precisely the problem that Stewart does not wish to pursue. The rocket scientists are still absurdly well rewarded for playing war games with other rocket scientists – with other people’s money. But they are the constituent atoms in Stewart’s infinite regress. They have all become day traders trying to second-guess each other over the next move up or down of whatever it is they are betting on.The current bubble may prove to be the biggest ever. But maths courses, as Simon Jenkins has observed, don’t do history.
As someone trained in history, I might be biased, but I’d say that’s half the problem right there.