ACA Repeal/Replace: Progressives Face Moral Dilemma

[David Horn]

(09-09-2017, 09:02 PM)Warren Dew Wrote: If you're going to understand the quantitative aspects of economics and understand how the economy actually works, you have to use algebra, and in the case of understanding Georgist land taxes, an understanding of calculus is pretty necessary as well.  If you don't think of economics in mathematical terms, you're not really using economics at all; you're just making political arguments couched in misused economic terminology.  I do understand that the left is often happy to misuse economics in this way, but the truth is, economics without math is as worthless as physics without math.

This is an incredible statement.  Yes, economic models need some level of math to create and use them, but the most complex models tend to fail more often that their more simplistic cousins, because they assume a level of precision impossible to obtain in a social science.  Humans act rationally and irrationally, but most importantly, without an easily quantifiable pattern.  Chaos Theory is a much better tool to deal with economics: precision decays as the predicted future becomes more distant from the present.

And fwiw, the most successful modeling exercises in the post 2008 period have been old IS-LM models used by the classical Keynesians.  They focus on trends rather than specific conclusions.  Along with most of the freshwater economic schools, neo-Keynesians tried the higher precision route too.  It lead them astray.  Behavioral economics finally broke the rational-actor bubble, that held firmly to the idea that people act rationally in economic matters.  They don't, so markets don't either.