29
Dec
2011
The Laureates Need to Give More After-Dinner Talks
Tony sends this astounding video. Thinking that maybe the person who cut it up was being unfair to recent economic Nobel (Memorial) laureates Christopher Sims and/or Thomas Sargent, I watched the second video, which isolates Sargent’s full reply. (I didn’t see a link for Sims’ full response.) Uh, it’s not pretty.
Let me repeat: Every economist needs to start coming up with his alibi, so that when the government collapses and angry mobs begin stringing people up, he can say, “Huh? I’m not an economist. I’ve been cutting hair for the last three years, since I got laid off from GM. You wanna see my setup in the garage?”
These two are mathematicians, not economists.
What they concluded follows exactly from their assumptions. But they’re not doing economics.
And by that logic, Mises was a great writer of German and English language fiction from which he then drew parallels to the real world.
Just because you can’t do that kind of math does not mean that people who can are not great economists.
By that logic? What logic did you think I was using? Whoever I don’t agree with I’ll just say they’re not economists?
Mises was an economist.
Your logic doesn’t follow.
The use of math does not a mathematician make. You’re confusing method and subject.
Mises was an economist because of the questions he asked, not because of the language he used. Likewise Sargent and Sims are economists.
Sure not everything can be captured through the use of math, the same however holds for all forms of logic at least since Wittgenstein II.
Mises was a mathematician.
His brother, a hoaxer.
The use of math does not a mathematician make. You’re confusing method and subject.
No, you misunderstand. I did not say that they are mathematicians merely because they use math.
I didn’t say it before, but I’ll say it now: It’s the fact that they THINK like mathematicians, and not like economists, that makes me conclude that they are mathematicians and not economists.
Their use of mathematics is incidental to the way they think.
Mises was an economist because of the questions he asked, not because of the language he used. Likewise Sargent and Sims are economists.
That can’t be right, because by that logic, creationist priests would be evolutionary biologists. No, it’s more than just asking questions.
Sure not everything can be captured through the use of math, the same however holds for all forms of logic at least since Wittgenstein II.
This may interest you:
http://mises.org/journals/scholar/long.pdf
They think like mathematicians? I thought that there was no distinction when it comes to logic? Don’t all human beings recognize the same logic?
Surely your criterion to distinguish between the sciences is not going to be based on polylogism ;).
Nor do I think that status is the appropriate demarcation criterion, by that logic the Austrians would be the creationist priests to the evolutionary biologists ie. mainstream economists.
It is about the questions you ask that determines your field. That you do not have a very high status as a creationist priest in the field of biology and you’re not taken particularly serious does not change that fact.
They think like mathematicians? I thought that there was no distinction when it comes to logic? Don’t all human beings recognize the same logic?
I also wasn’t referring to one logic everyone uses when I said they think like mathematicians.
Nor do I think that status is the appropriate demarcation criterion, by that logic the Austrians would be the creationist priests to the evolutionary biologists ie. mainstream economists.
No, even if we adopted the logic you said I was using, that still wouldn’t follow.
I think you’re confused because you’re a little angry that someone would dare suggest that two economists who received an award from a central bank are really mathematicians.
It is about the questions you ask that determines your field.
No, it isn’t the mere questions you ask, because by that criterion, as I said, creationist priests would have to be considered evolutionary biologists, since the questions they ask are the same (Where do we come from? etc)
That you do not have a very high status as a creationist priest in the field of biology and you’re not taken particularly serious does not change that fact.
It does if the method by which you find the answers depends on using faith rather than science.
Hi Robert,
You’re a little late to this party:
How to silence a Nobel Prize economist: Ask about the economy (Peter Schiff Show) – Oct 16, 2011
http://www.reddit.com/r/austrian_economics/comments/leogb/how_to_silence_a_nobel_prize_economist_ask_about/
If you follow the Austrian economics Reddit, that won’t happen again: http://www.reddit.com/r/austrian_economics/ . Just a little friendly advertisement 🙂 Danny Sanchez is the backup moderator there by-the-way.
Way late to the party.
http://blog.mises.org/18740/how-to-silence-a-nobel-prize-winning-economist-ask-him-about-the-economy/
Marc you’re way late. Somebody else already told me that.
So, Sargent isn’t going to be running the ‘Catalina Wine Mixer’ this year? Darnit! Well, I guess that I lost that bet…..
I don’t really see what the fuss is about? Could someone care to explain this to me?
What I am hearing them say is:
1. That you need a lot of data to predict, so asking for predictions is pointless as they are not going to be able to give answers from the top of their head.
2. That there is a distinction between what is sustainable and what can be predicted the latter due to uncertainty.
3. That the government budget constraint, the fiscal + the monetary authority, means that the current course of action is ‘sustainable’. It will ‘just’ involve the shifting of resources.
4. Because it will involve the shifting of resources that were not foreseen at the time the promise was made, it is uncertain whether these promises will actually be kept. This makes prediction difficult.
Martin, I thought the guy basically asked if the government had been doing the right things so far in the crisis, and what other policies it might try to fix it. Sims basically said “I have no idea” and Sargent gave a fairly vague answer to a completely different question.
Ok thanks.
I’m apparently more inclined to give it a bit more of a charitable interpretation. Sims – in my view – simply said that he did not want to speculate. And Sargent did not give an answer to that question, you’re right about it. What I see him doing however is basically thinking about the wording of that question, thinking it is a poorly worded question and then giving an answer to a related poorly worded question about the ‘sustainability’ of government policies. It’s understandable why he would consider that the same question.
Martin, no one asked anything about prediction. The question was whether the government’s actions were appropriate. You do not need data to evaluate this. We were all taught the typical blend of Keynes/Friedman in business school – you’ll find that once you learn actual economics your thoughts will become much clearer, and you will be able to answer basic questions like those asked in the video.
I think I’ll stick with the ‘actual’ economics I was taught, thank you very much. Economics is about the real world and not some fictitious world on a blackboard. Our understanding necessarily starts with logic and simple models, but it would be silly to believe that it stops there. You need data either to illustrate your model, to persuade your audience or to find out what’s missing.
I understand what you are saying but obviously disagree. Once we start looking at data we start studying economic history – not economics. Obviously quite a lot can be learned from studying history, but human actions are never constant. This is why only a priori models, not empirical models, have any use. Economics is based on the action of individuals, and this is why it should be treated as a social science and not a hard science like chemistry. – there are too many constantly changing variables. This is why Austrian economics generally has performed more successfully than other schools in prediction.
I have lots of respect for you however deciding to take on a board full of Austrians in a respectful manner. Sorry for being rude earlier.
Daniel,
Having read a bit of Austrian Economics, I am sympathetic towards it. I just do not think that a lot of the criticism towards what is considered the mainstream and what McCloskey calls ‘Samuelsonian’, is true.
Also all economists use a priori models, all of economics is always based on the logic of choice. The difference between the Samuelsonian’s and the Austrians is mainly that the former have a different equilibrium construct with a different relationship to reality from the latter. Sure the language is one of positivism, the practice? Not so much from what I gather.
With regard to changing constants, how much do constants have to change for them to be of little use for the future? Let’s not forget that in order to be able to act we have to be right in a way that on average it is profitable. The sole thing you do when you use the past as a guide for the future, is to engage in an activity that every human being does with every action with respect to its environment (including other humans) but you’re a bit more explicit about it.
Where did (3) come from? You may believe (3), but it’s certainly not what Sargent says. Sargent says money promises will be broken.
While I agree that Sargent’s answer was vague, it seems as if he concedes that to some degree the United States has not been doing the “right” things. He mentions that government spending is limited by budget constraints, and then says that a lot of the entitlements (“promises”) the United States’ government has been making will not be fulfilled. This suggests that,
1. The government will not be able to pay for all of these long-term expenditures.
2. The United States would be better off not making these promises, at all.
Jonathan, Paul Krugman thinks the same thing for (1), and given that, presumably for (2) as well. So Sargent’s answer was pretty vague indeed, if you’re trying to get “he opposed the Obama stimulus” from it.
I can see how one could suppose he could be arguing for the stimulus. I don’t think anything he says suggests that fiscal stimulus is good/bad — fiscal stimulus in terms of short-term expenditures could be “better” than fiscal stimulus in terms of long-term entitlements.
Krugman differentiates between short-term and long-term, as well, if I remember correctly.
Argh! No, Jonathan, I’m not saying he’s arguing for the stimulus. I’m pretty sure Sargent was against it. What I’m saying is, his answer had nothing to do with the government’s response to the crisis, which is what the guy was asking about.
Bob,
That’s what I was assuming all along. You said Krugman agrees with my two conditions, but doesn’t get that they are against stimulus. I said, basically, “yea, I guess I could see where Krugman is coming from.”
all i got from this is that they’re bad public speakers, not bad economists…
Wow. All I could think of after watching the second clip was this:
http://www.youtube.com/watch?v=5hfYJsQAhl0
LOL! Awesome.
They’re far brighter than you Bob. At least they know they don’t know.
There is a certain degree to which they might have been holding themselves to that Kantian dictum “If you can’t say something nice, don’t say anything at all”
Remember the WSJ quickly declared their award “the anti-Keynes award”; they have been trying to avoid that image ever since.
The problem is that you don’t really need any background in economics to answer a question in this manner; it kindof reminds me of the answer’s I’d give on a pop quiz if I hadn’t done the reading the night before.
For instance, I have no background in medical training whatsoever, but if asked to give someone a diagnosis, I could say something like “Oh well that will require great amounts of research and testing, there’s no simple answers to a question as complex as this, blah blah blah”
There really wasn’t anything particularly damning there. They’re two socially awkward mathematicians being asked a question that is ridiculously broad and vague, and they respond exactly the way socially awkward math types respond in job interviews when I ask that kind of question — they pause, stammer, and say they feel they can’t answer the question because it doesn’t have an easy, knowable sound-bite answer.
I don’t doubt if you put a guy like Krugman up there — i.e. someone who spends a lot of time thinking about exactly that question and has canned answers — you’d get something quickly.
You’re proving the point: these men are mathematicians, not economists.
Sargent is a text-book example of what Hayek was referring to when he spoke of “scientism”. Sargent clearly cannot comprehend that mathematics is a tool, not an end to itself:
http://www.minneapolisfed.org/pubs/region/10-09/sargent.pdf
https://files.nyu.edu/ts43/public/math_courses.html