Saturday, May 09, 2015

Economists don't have "physics envy"



I hear all the time that economists have "physics envy". This doesn't seem even remotely true. I'm not sure whether "physics envy" means that economists envy physicists, or that economists want to make physics-style theories, or that economists wish their theories worked as well as those of physicists. But none of these are true.

Reasons why economists don't have physics envy include:

1. Economists make a lot more money than physicists.

2. Economists are treated as experts on practically anything. An economist can talk about why hipsters have moustaches, and get taken seriously. An economist can talk about which restaurants are the best, and get taken seriously (Update: NO, I'm not saying Tyler's book is bad, I haven't even read it, so HUSH). An economist can talk about politics, marriage, popular music, sex, race, or sports and get taken as seriously as any expert in those fields. An economist can talk about how much progress physicists are likely to make, and get taken seriously. Physicists get taken seriously when they invent quantitative rules for things, but otherwise are treated as just one more tribe of crazy nerds with their heads in the aether.

3. Economic theorists, traditionally, have been free from the constraints of empirical validation. Econ didn't start out with any data to speak of, so it developed a culture where data wasn't the measure of a good theory. That culture has been slowly changing, as IT and statistics allow us to do much more empirics. The wild econ theorist is being slowly tamed, though they occasionally buck against their new constraints. But economics is still nowhere near as enslaved to empirics as physics is. Ed Witten, a brilliant physicist who invented superstring theory and won a Fields Medal, will probably never get a Nobel prize, since no one has yet figured out a way to test superstring theory. In econ, though, un-validated theories - even empirically unsuccessful theories - do sometimes get Nobel prizes, especially in macro.

4. Economists and physicists have totally different reasons for thinking their theories are beautiful. Physicists tend to appreciate the symmetry of their theories, or their connection to geometry. Economists tend to appreciate the fact that their theories can be derived from axioms of human behavior. Economists don't usually see themselves as a high-up floor on the tower of science that begins with math and progresses through physics to chem, then bio, then psych. They tend to see their own field as part of an entirely different tower, unsupported by the other sciences, built on the foundation of axioms - not empirical laws or derived properties - of human behavior.

(Note for physics/math people: what economists call "axioms" are what physicists call "postulates".)

5. Economics theories aren't really much like physics theories in the first place. In particular, the word "equilibrium" means totally different things in the two fields. In econ, the word "equilibrium" is incredibly general - it just means the solution of any system of equations in an economics model, really. A few economic equilibria are similar to equilibria in physics models, but not most. A lot of people outside econ don't seem to understand how economists use the word.


So economists don't have physics envy. But there is a related field that absolutely does have physics envy: Financial engineering.

Financial engineering doesn't use the axiomatic stuff econ uses - instead it fits curves, like applied math. Often, the math is very similar to that used by physicists, and this is why physicists often go into financial engineering. But financial engineering doesn't work nearly as well as physics, which definitely leads financial engineers to wish that it did work as well.

So if you want to tease anyone for having "physics envy," tease financial engineers, not economists. The only way economists are ever going to envy physicists is if they find out how much physicists...well, never mind.

78 comments:

  1. Anonymous12:04 PM

    Physics envy definitely is about the issue that economics theories look like physics. A big part of the physics envy allegation is the emphasis of finding equilibria. The concept of an equilibrium in economics was directly imported from Physics, even though it is not really a good fit in the space of economics.

    On this basis, your first and second points are irrelevant. The third point is a non sequitur, since there are plenty of theoretical physicists which don't care about empircal support either. And the fourth point is not really an accurate formulation of how most economic theorists think. Some care as much about symmetry, etc., as physicists. And the derivation from "axioms" of human behavior to predictions is completely problematic. Some economic theorists spend their careers challenging these axioms. For those that don't, but instead do this kind of derivation from the axiom to the specific, that entire process was invented in Physics. So, that is Physics envy as well.

    A somewhat outdated but still valuable resource on economists' Physics envy is the book More Heat than Light. http://www.amazon.com/More-Heat-than-Light-Perspectives/dp/0521426898/ref=sr_1_1?ie=UTF8&qid=1431187425&sr=8-1&keywords=more+heat+than+light

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    1. See #5, which I added. Economists use the word "equilibrium", but it doesn't mean what it means in physics.

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    2. Anonymous12:19 PM

      This is not convincing. Every equilibrium model in economics is an abstracted form of a dynamic model which looks just like physics dynamics with the same concept of an equilibrium. The most common example is for supply demand, which is abstracted from a cobweb model, where the equilibrium for the dynamics look just like a physics equilibrium

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    3. Every equilibrium model in economics is an abstracted form of a dynamic model which looks just like physics dynamics with the same concept of an equilibrium.

      Completely wrong! First of all, there are many static equilibria (for example, static Nash equilibria are ubiquitous). Second, economists will label an entire dynamic path an "equilibrium", not just a steady state.

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    4. Anonymous12:26 PM

      Do you know what a stationary path is in calculus of variations? Now where was that developed, hmmmm....

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    5. Sure. Does physics call that an "equilibrium"? No. But econ does. Would physicists call a free particle being flung around by turbulent fields a particle in "equilibrium"? No, they would not. But economists would.

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    6. Anonymous1:06 PM

      You're arguing semantics. It's the exact same concept.

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    7. It's not semantics, because when econ critics say "Economists assume economies are in equilibrium, but they're NOT, bruh!", they're just showing that they don't know how economists use the term.

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    8. Also note that most types of equilibrium you find in econ have no analog whatsoever in physics. Competitive equilibrium. Nash equilibrium. Etc. To say it's a knockoff of physics is to demonstrate absurd ignorance.

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    9. Anonymous3:09 PM

      Wow, this is ridiculous. You gave an example of an equilibrium which clearly comes directly from Physics. You were wrong in saying it had no source from Physics. Nash equilibrium is different. Its behavior relies on a discrete state space, while most other examples are in a continuous one.

      But I never claimed that for every concept of equilibrium in Economics, there exists a direct analogue in Physics. That was your misreading. What I was saying, and say now, is that in the history of economic thought, the concept of equilibrium was imported directly from Physics. I would have though you were familiar with these basics of economic history, but I was wrong.

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    10. Wow, this is ridiculous. You gave an example of an equilibrium which clearly comes directly from Physics.

      First of all, why do you capitalize "physics"? That's weird. Where are you from?

      Nash equilibrium is different. Its behavior relies on a discrete state space, while most other examples are in a continuous one.

      Wrong, Nash equilibrium often has a continuous state space.

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    11. Three wrong assertions amidst a trend of increasing convictions? Anonymous has got to be an economist.

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    12. Neither quite has this. Alfred J. Lotka discussed this back in 1925, listing various definitions of equilibrium within physics and how they relate to ones in economics. Bottom line is that some do and some do not, but there was indeed historically considerable borrowing from physics by economists of concepts of equilibrium. As indeed Mirowski laid out, Samuelson was a key player in all this, heavily influenced by Lotka, as a matter of often forgotten fact, and his Foundations of Economic Analysis is indeed substantially a giant transfer from physics. Of course, it was Mirowski who largely popularized the term "physics envy," although I doubt he coined it.

      Barkley Rosser

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    13. BTW, are you posting this to explain/justify your own shift from physics to economics, Noah?

      JBR

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    14. "Physics envy definitely is about the issue that economics theories look like physics."

      There's nothing wrong with drawing inspirations or tools from physics to further the study of economics. You don't accuse behavioral economists of psych-envy, do you?

      The real problem - and with all due respect, I disagree with Noah's interpretation - is blindly applying concepts from physics to economics. These days, I think most economists have learned to appreciate the more subtle differences between the two fields. Its why raw empirics in the style of the natural sciences probably won't be productive in the social sciences (or e.g. in computer science). Its also why econophysicists and many natural-science-types are sometimes irritating, because they don't realize that there's an economic intuition that's analogous to but different from physical intuition or intuitions in the various subfields of math.

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    15. blindly applying concepts from physics to economics

      I've never seen even one single instance of that.

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    16. Anonymous12:36 PM

      It's not strictly physics, but I've heard the early excitement around chaos theory cited as an example.

      Maybe "problem" was the wrong word. I'm sure Walras and Pareto and Marshall were all influenced by physics, productively.

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    17. On money, physicists can generally get HF jobs if they want them.

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    18. On money, physicists can generally get HF jobs if they want them.

      Yeah, but it's a lot harder than it used to be, and you have to give up physics.

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    19. Anonymous12:38 AM

      70-80% of physicists eventually have to give up physics to find paying work. They use to go into HF stuff, now they go into data science. Wherever there is demand.

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    20. Yep. In econ you actually get to find work doing econ forever, if you want.

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  2. I agree with the previous commenter. Julie Nelson for example talks a lot about the physics envy and its history in economic thought.

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    1. Well, maybe they had physics envy in the past. Physics had incredibly high status in the 50s, 60s, and 70s. Before that, people tell me that chem was the most respected of the sciences.

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    2. Anonymous2:29 PM

      Julie Nelson might say it, and I'm sure it's politically beneficial for her to try to convince you of that fact, but that doesn't make it true.

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    3. I think I had a crush on a girl named Julie Nelson in junior high.

      I might be making that up, though.

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  3. Anonymous12:45 PM

    Economists never envy physicists for their ability to say things about the world that are actually right?

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    1. No. Economists tend to think that the things they say about the world *are* right, even if the data isn't there.

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  4. 'Economists are treated as experts on everything.'

    At best that might be true in a 'jack of all trades, master of none' sense, but rarely is an economist's opinion on a non-Econ subject taken more seriously than a full-timer. Also there are plenty of non-economists whose economic opinions are treated seriously.

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    1. Also there are plenty of non-economists whose economic opinions are treated seriously.

      That's very true, in fact I'd argue that the economy is one of the areas where economists are taken *least* seriously.

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  5. Damn, wasn't finished. Economics has models for all sorts of things but weak over-arching theory like relativity or quantum mechanics.

    The early Nobel prizes went to people trained in physics (Tinbergen -> Ehrenfest, Samuelson -> Gibbs) precisely because they saw the relationships and were able to quantify economics.

    Most of your comments are true, but if economists don't have physics envy I believe they should try to unify the subject.

    Great post, like uber but for trolling

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    1. Plus, empirical verification gives discipline. Choose different axioms, get different results, form a school that only meets other schools in the comment section of you blog. Econ needs an Occam.

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    2. There's also this though, re "stamp collecting":
      http://xkcd.com/1520/

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    3. Anonymous6:27 AM

      They shouldn't try to unify the subject. If they do, they will turn it into a religion. consensus is a symptom of successful science, but a field which consciously aims for consensus is called a religion.

      And before empirical verification, economists need to decide whether they really want to be scientists or not. One point that is not made in the article is that physicists are conscious that there is a distinction between physics and engineering, between describing how the world (doesn't) work and finding ways to grant people's wishes. On the other hand economists are extremely reluctant to ackowledge that policy design is not a scientific activity, and should be considered as part of an entirely different discipline in the first place : politics.

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  6. Witten is not a physicist. He is a brilliant mathematician. He is as much a physicist as Hilbert was an Einstein.

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    1. Theoretical physicists are just mathematicians who focus on physics math. Einstein and Witten both have great physical intuition, which is really important. Hilbert not so much, but he helped Einstein a lot with GR.

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    2. Anonymous5:21 PM

      Yoichiro Nambu can be said to be one of the founders of superstring theory, and he got a nobel prize

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    3. Anonymous5:36 PM

      It's debatable how brilliant a mathematician Witten is, he got a fields metal without actually prove the theorem, his specialty seems to be finding physical interpretation for pure mathematics, although consider how abstract superstring theory is, maybe he is actually just finding equivalency between different mathematical theories

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    4. Nambu got the prize for something else (spontaneous symmetry breaking), which definitely does have experimental support. If he had only worked on string theory, he would not have gotten the prize. The other main inventors of string theory - Leonard Susskind, etc. - also won't get Nobels unless string theory gets experimental support.

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    5. It's true that there are lots of mathematicians, who focus on physics, yet historically, their contribution to physics has been minimal, with all due respect to Von Neumann.
      Witten has lots of insight into symmetries of certain mathematical objects, it's not clear that those symmetries have anything to do with
      physics. Actually, scratch that, it's pretty clear by now that they don't.

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    6. This isn't true at all, in fact, in the old days physicists were actually *called* "mathematicians".

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    7. What they were called is immaterial. What matters is what kinds of insights move things forward. Here, physical intuition trumps formalism every time:
      E.g. Dirac >> von Neumann

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  7. Economics is about mental interactions between human beings. Which is why it's amazing how long psychology was ignored in the economics.

    Physics is about, well, physical interactions in nature (including human physical interactions).

    In this sense, there would be no reason for one to "envy" the other, as they are very separate endeavors.

    I can understand envying the beauty of physical laws and repeatability of physical experiments, but any person understands that is not the goal of economics, so this is like saying a human evnvies the way a bird flies. We know we can't flt in the same way.

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  8. If there's no envy there should be. Physicists don't have a professional culture that takes pride in not having been good enough at math to be a real mathematicians but maintaining the self regard to base a career on publishing math with no mathematical importance nor relationship to the real world. In other words, they should be envious because no physicist is making a living off of (and gaining professional renown for) simple ideological masturbation dressed up as science with mediocre math.

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  9. Chem has not been ahead of physics in prestige since at least the time of Newton.

    The hierarchy for some time has been based on mathiness, with the basic issue being perceived IQ, with more math meaning higher IQ. So, math on top, then physics, then econ, with chem and others trailing. I think this still holds, even as econ increasingly imitates physics in being dominated by empiricism, although bringing in Witten and string theory recognizes that parts of physics are moving in the opposite direction towards econ, with these theories that are very hard to empirically test.

    BTW, while it is certainly true that economists make more money than physicists, this is not the key to prestige, which is what all that envy is about. Heck, plenty of more boring business types make more money than economists, financial engineers for sure, but even poops like accounting, management, and even, yuck, marketing types.

    And while one can sneer at mere empiricism, part of what gives physicists their prestige, even if some of this has faded and is passe, their beautiful and esoteric theories have in some cases resulted in some pretty impressive things in the world, some of them not all that necessarily great either, such as atomic bombs killing thousands of people. The best economists can claim is to possibly have brought about mass unemployment by botching their analyses (although one can argue that WW II came about as a result of the Great Depression, Hitler coming to power on the tide of German unemployment, blah blah).

    Barkley Rosser

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  10. Anonymous1:18 AM

    "Economists don't have physics envy"

    Honestly.

    Just one word:

    DSGE

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    1. More of an abbreviation of 4 words, really...

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  11. Anonymous3:08 AM

    Yes, right on about financial engineering. Although there's a lot of mathematician envy there too. It's entertaining how a routine fact of linear algebra becomes 'fundamental theorem of no arbitrage pricing.' Of course the real achievement is not in the proof, but in the formulation. So why is it a THEOREM and not the THEORY of no arbitrage pricing that gets the plug? It's bewildering. But that's something that econ has in common with finance (e.g. welfare theorems; I gather paul samuelson is largely responsible for the popularity of calling results 'theorems'.)

    (oh, and nerd quibble: ed witten didn't invent superstring theory, although he was an early proponent and was at the center of the explosion of new ideas about it in the 90s. It stretches back to Ramond and Neveu in the 70s and Schwarz and Green were the ones who got the ball rolling on it being a promising theory of quantum gravity in the 80s)

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    1. Quibble accepted. :-)

      But I wanted to use Witten to make the point because there's no question he's an incredibly brilliant guy who has made real, significant discoveries.

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  12. but there is a light in tunnel - econophysics - interdisciplinary approach (in my opinion psychology and sociology MUST be also involved) - clue is all economic theories MUST be verified at least to some degree before implementation otherwise humanity will continue to be guinea pig herd in politicians hands supported by economists with ad hoc made theories. Generally according to Thomas Kuhn classification of science - economy, psychology, sociology are not sciences per se - fortunately for last thirty years it is changing and let's hope we will witness interdisciplinar fusion of sciences supporting each other to solve complex issues which economy of course is

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    1. Econophysics is something done by physicists primarily, applying actual current physics models to economic and financial data. There is a long history of this, although the term was only cooked up about 20 years ago by Gene Stanley and Rosario Mantegna, both practicing physicists, and the former the editor of Physica A, a major outlet for this stuff. Some economists have occasionally been involved with this as coauthors, myself included, but it is very controversial, with many economists criticizing what goes on in this for its lack of coherent theory, occasionally baseless claims of universal findings, and sometimes loose and slipshod empirical techniques, with some of the econonphysicists basically just saying "Look, I found a coefficient for the slope of this log-log relationship, and it holds everywhere and always!" Curious that sometimes the economists end up being the defenders of the use of more rigorous statistical methods, which may have come about partly because our data tends to be much messier than what physicists usually encounter, so we have developed more elaborate torture chambers in which to elicit possible truth out data.

      BTW, I think that when chemistry was last more prestigious than physics was when it was still called "alchemy." Heck, they claimed to be able to make gold, and the physicists were a long way from the Manhattan Project.

      Barkley Rosser

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    2. Anonymous6:43 PM

      Jacek, "verifying economic theories" has nothing to do with the pure mess that is econophysics, and existed long before it (and numerously outside of it). It's lovely you feel that you have enough knowledge to make a comment, though!

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    3. Anonymous (I cannot tell you how little respect I have for all you jerks coming on here as "Anonymous"),

      Well, A., I said not a word about "verifiying economic theories," but I guess I should be grateful that someone who reads as well as you do as well as feeling the need to hide his identity thinks that "it is lovely" that I "feel" that I "have enough knowledge to make a comment." Gosh, thanks. In the meantime, you can go read the entry in the Revised New Palgrave Dictionary of Economics on econophysics and be sure to see who wrote it.

      JBR

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    4. I aplogize to Anonymous. See he was addressing Jacek, not me. I am the one not reading accurately and getting pompous about it.I am eating the egg all over my face, :-).

      BTW, regarding Witten, he was studying econ and not doing very well at it before he switched to physics, a rare case of someone going in that direction. And, of course, there is Max Planck's old line that he would not study econ because it was "too hard.'

      JBR

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  13. What are the "axioms of human behavior"? That humans are self-interested, except when they're not?

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  14. Anonymous11:13 AM

    The economist doth protest too much, methinks.

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  15. Anonymous11:41 AM

    nRT = PV
    amount of stuff * constant * average movement of stuff = effect of stuff / unit * total units

    MV = Py
    amount of stuff * average movement of stuff we pretend is a constant = effect of stuff / unit * total units

    Coincidence? I think not!

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    1. Those are accounting identities but not theories...

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    2. PV/RT = const. is a theory, not an accounting identity.

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  16. Well, the arguments don't say why economists don't have physics envy. They only say why economists shouldn't have physics envy - yet, they do. The problem is this: economists say they specialize in predicting human behavior. And the main purpose of economists is to predict the future, that's what the policy recommendations are there for. That's why central banks set interest rates, and so on. Economists wished they could accurately predict human behaviour perfectly - the determinism of human behaviour, so to say. Cause and effect are connected by an infinitely stable relationship. If that was possible, and the equations imply that it is, then economics would achieve the precision of physics. But that has never been the case.
    The equilibrium is one of these concepts. But while in physics, matter and energy are interchangeable under some circumstances, human beings suffer from mortaility. A dead man cannot buy stuff or work. And while a rock does not have a mind of its own to change its trajectory, human beings do. The unconscious may be a parallel to the brownian motion, except that unconscious human behaviour is at the core of the whole idea of doing economics. I wish that precision was possible, I am fascinated by the idea, for example, portrayed as psychohistory by Isaac Asimov, but it's probably not possible.

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  17. Anonymous4:47 PM

    The idea of physics envy is not that economist are jealous of physics as a profession (arguments 1 and 2) or that they directly appropriate physics models (most of arguments 3-5).

    The issue comes down to the competition for the field to have prestige in (a) this is difficult, and (b) this is a source of useful, accurate knowledge. The common debates about whether economics is or is not a "science" are closely related to this. Argument 3, if anything, is true of all social science disciplines; the "hard sciences" are incredibly empirical, so to be taken seriously as a "science" you also have to play that game.

    More directly though the claim usually is built around two things - what are the ambitions of the field and how are theories constructed/presented?

    You claim that physics is not axiomatic, but I disagree. Physics may have a different basis for choosing its axioms, but ultimately "Quarks behave in this way, and thus (after further algebra/proofs) quantum mechanics" is not that different from "People have preferences like this, and thus (after further algebra/proofs) general equilibrium". In fact, the laws of motion as presented by Newton were derived from first principles (later tested and empirically validated). Just as in economics, there is a theory and searches for "deep" parameters implied by this theory (think finding the gravitational constant). In particular, people seem upset that economists, when presenting a model, do not treat people as people, but as curious billiard balls following peculiar rules dancing through a set of equations. Surely people cannot be pinned down so easily. Plus, you must be misguided because the equation says X but the world looks (to me) like Y, yet you insist on your machinery. To most other disciplines, the mere fact that a model's mathematical elegance is even considered is similarity though (despite the distinctions you note).

    In addition, physics sees itself (or is understood to see itself) as dealing with the most fundamental properties, and all other pursuits are special cases (i.e. a chemical reaction is just an implementation of physical laws in a particular context; think statistical thermodynamics). If anything physicists are more circumspect and acknowledge that, while deep-down true, chemistry and biology get complicated quickly and subject matter experts can be trusted to take care of their fields. Economists, on the other hand, look down on other disciplines as "too hand-wavy" or "soft" and claim that the economists' axioms and (highly mathematical) methods can build better models.

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    1. You claim that physics is not axiomatic, but I disagree.

      Oh sure, you can derive physics theories from postulates. People do it all the time. What I'm saying is that econ theorists generally use a different set of postulates (or "axioms"). They don't think econ comes from aggregated physics.

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  18. I suspect some of it has to do with popular perceptions of physicists' and economists' ability to handle complex mathematical machinery carefully, since this is usually the proxy that people who aren't familiar with the two subjects' goals use to evaluate relative difficulty. Also, counter-intuitive stuff in physics has a much more visceral appeal to Joe six-pack (sorry, couldn't resist) than counter-intuitive stuff in econ. Quantum tunneling vs. the paradox of thrift. )Truth be told, Joe six-pack probably couldn't care less about either, but never mind that....)

    Which isn't to suggest that economists have physics envy; only that many people who know a little about math but not enough about the two subjects (or math) might feel that way. There are several threads on the interwebs, for example, asking whether all physicists can do economics. And they cite the bigwigs that made the transition (Barro, Stiglitz, Woodford) , the implication of course being that they left physics to seek refuge in the lavender-scented bosom of economic theory.

    Also, for what it's worth, Barro's cited reason for leaving physics and entering economics was that he "wouldn't be close to the top in those fields". I assume those is physics/math, or sub-fields of physics. I learned that while typing this up.

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  19. Bill Ellis10:41 PM

    Noah,
    I always thought that "physics envy" referred to the fact that physics is testable and that experiments produce conclusive results. In contrast economists have to win epic political battles just to get their ideas put in to policy and then because it is impossible in the real wold to achieve "Ceteris paribus " the" results" remain forever in dispute.

    What's not for a scientist to envy?

    But I guess I was wrong. According to you what "physics envy" really refers to is a myth that economists envy the lives that physicists live, and the style of thinking they employ.

    thanks for correcting my misconception..... I try to Learn something new everyday.

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    1. I always thought that "physics envy" referred to the fact that physics is testable and that experiments produce conclusive results. In contrast economists have to win epic political battles just to get their ideas put in to policy and then because it is impossible in the real wold to achieve "Ceteris paribus " the" results" remain forever in dispute.

      While this is true, it's not a cause for envy, because in practice it means economists often get to claim whatever they want without fear of being debunked! :-)

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  20. Surely you're joking, Mr. Smith? You can't possibly be saying the public takes economists as seriously as they take physicists?

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    1. Anonymous9:53 AM

      I can not agree more Bob. I'm pretty amazed that somebody can think that. I'm also not a fan of this kind of humor.

      StojanD

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    2. More so. Economists are treated as all-purpose sages. Could a physicist write a series of books purporting to explain the lifestyles of drug dealers, cheating on tests, the decline of the KKK, and geoengineering and have that series be a bestseller? Maybe, but seems unlikely. But an economist in fact did do this!

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    3. They are not treated as sages. They are treated as entertainers.

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    4. Interesting hypothesis...intellectual rock-em-sock-em robots?

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  21. I can't remember the exact details but I believe there's a myth where there was a debate about who enjoys the act of lovemaking-I'm trying to be tasteful here-more, men or women?

    When someone who had been both at one point tried to give an answer the Furies killed him/her.

    As you have the background in both physics and economics Noah, you should know which is really the plum gig.

    Judging by this piece have you decided economists have more fun?

    I for one admire the ability of economists to always think they're right no matter what happens. It must be cool for empirical developments to in no way take away your rightness.

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    1. Bill Ellis11:14 AM

      Giggles. :-)

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  22. Actually the axioms are derived from the theories. You need axioms of behavior when you don't know why the fuck people behave the way they do. And the axioms are going away, as we speak.

    But do go on.

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    1. I can't tell what that means, but it sounds aggressive, so I like it.

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    2. It means the theories are self-justifying. There is no progress from A to B. A is B. Cheers.

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  23. Noah, (MaxSpeak)

    I'll try to clarify MaxSpeak's point:

    Physicists do not know the first principles of the physical world, but they can usually construct operational proofs using mathematics - just as we can in mathematics construct proofs that at least test their hypothesis. This is because the universe can't 'choose' to remain out of balance.

    Even such, scientists still write in in operational language, with operational definitions, to illustrate that they are not adding information (bias) into their arguments.

    But in economics, not only is the purpose of human though expressly to place the world out of balance so that we can capture the difference for our use, we DO know the first principles of human behavior - and each of us is an excellent subjective and sympathetic test of each and every rational decision in a transformational sequence.

    Yet we do not demand 'proofs' in economics as we do in the physical sciences, mathematics or logic. A proof is not a justification. It is a form of criticism. It tells us that something *can* be operationally constructed, and therefore can exist.

    If one cannot construct a bottom up (operational) proof, one cannot prove one's phenomenon is existentially possible, and free of subjectively added information (bias).

    The operational movements were successful in physics (Bridgman/Operationalism), mathematics (Hilbert and Brouwer/Intuitionism), and in psychology (various/Operationism). But in economics this movement failed (Mises/Praxeology).

    One cannot warranty that an economic theory is true if one has not warrantied that it is operationally possible for humans to perform.

    As such the sequence of theories (at least at the macro level) are self justifying, rather than critical (scientific) and well criticized.

    At some point in the future Hayek's prediction that the 20th century would be remembered as an era of mysticism (pseudoscience) in the social sciences will be common knowledge.

    These subjects are non trivial, but MaxSpeak has touched on the central problem: once you assume the virtue of full employment the rest is just justification.

    Curt Doolittle
    The Propertarian Institute
    Kiev Ukraine


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