I just took a couple hours to work my way through this talk by Eric R. Weinstein on Gauge Theory in Economics. It’s a really good talk; however, it is a math talk, so if you aren’t comfortable with vector spaces being the simplest object in view, I’m not sure how much you’d enjoy it. If you do, though, check it out! A phrase for temptation purposes: “A Rosetta Stone for economics, physics, and geometry.”
But even if you’re not into advanced mathematical brain fry, the underlying point of the talk is very important. According to Weinstein, there is an obviously incorrect economic assumption about human behavior, expressed in this quote:
“…tastes neither change capriciously nor differ importantly between people. On this interpretation one does not argue over tastes for the same reason that one does not argue over the Rocky Mountains—both are there, will be there next year, too, and are the same to all men.”
—Gary Becker and George Stigler, 1977, De Gustibus Non Est Disputandum
…and that wrong assumption has affected the discipline of economics as described in this quote:
“That the problems [of changes of taste] have remained central and largely unresolved for twenty-five hndred years no doubt makes some economists think it wise to define them out of the discipline, at whatever cost in realism and relevance.”
M.S. McPherson, ‘Changes in tastes’, entry in The New Palgrave: A dictionary of Economics, 1987, pp 401-403.
In short, economics uses, as a fundamental axiom, the obviously wrong idea that we all prefer the same things to the same degree for our entire lives.
However, I sort of can’t blame any economist who would hope like hell this assumption, while obviously incorrect, would be unimportant. I can’t blame them because, when you assume the obviously wrong idea is in fact wrong, the mathematics behind fundamentally important and useful economic concepts become, to use a technical phrase, really fucking hard. I have compassion for anyone who doesn’t want to go anywhere near an infinite-dimensional function space bundle!
But, still. A crazily wrong axiom has to go. Suddenly, there’s all kinds of low-hanging theorems just waiting to be picked up by mathematicians and physicists and anyone else who is willing to touch a fiber bundle. So, who’s with me?
[ETA: There's a whole interesting undercurrent of the extension of that idea of 'the unreasonable effectiveness of mathematics', and I think that's really interesting from a calculus education standpoint, too. I got too excited about the economics part to mention it!]Tags: axioms, economics, gauge theory