The virtual conference: New developments in economics

Plenary session 7, New Developments in Economics.

The Mont Pelerin Society Conference program had papers on happiness in society by Jason Potts, the economist as guru by Geoffrey Brennan and behavioural economics, law, liberty and the quest for the Third Way by Judge Douglas Ginsburg.

The Virtual Alternative.

1. Peter Boettke (1997) on the wrong turn taken to formalism. This is a lengthy and detailed argument along the lines that the postwar turn to mathematical formalism, especially as practiced by the strong supporters of markets at Chicago, produced two perverse effects. One was exaggerated expectations of markets (the Chicago error) and the other (in reaction) was the exaggerated response to imperfections in markets (the anti-market, regulation error).

2. The lost opportunity of a merger in the 1930s to create the firm of  “Parsons, Mises, Popper and Associates” which could have:

a) Averted the parting of the ways between economics and the other social sciences;

b) Offered an alternative program to mathematical formalism in economics, focusssed on institutions and traditions;

c) Offered an alternative to both “grand theory” and “crude empiricism” in the social sciences:

d) Sponsored multi-disciplinary policy work that could feed into practical problems and evaluate the outcome of social reforms.

More more along these lines See Session X  “The synergy of Popper and the Austrians”.

3. The rise of mathematics in economics. Reading notes on Israel and Ingrao.

4. The problems and prospects of game theory.

Did they pick the wrong games? What about ball games, where investigation would point to the function of (i) plans and intentions, (ii) learning and innovation, (iii) organization and leadership, and (iv) the limits and the incentives imposed and created by legal, social and cultural institutions. A nice distinction could be made between the (fixed) natural laws that set limits on human action and the man-made rules and conventions that can be changed.

Contemplate the evolution of experimental economics in the hands of Vernon Smith and his colleagues, compared with the programs driven by the mathematical whiz kids at the RAND, Cowles Commission etc described by Mirowski in Machine Dreams.

5. Proposal for the two-track economics degree.

One track with the full complement of maths, the other focussed on the economic way of thinking and situational analysis so graduates are equipped to move immediately into multi-disciplinary work with other social scientists to collect the low-hanging fruit of  institutional analysis without need of mathematical ladders. Units of maths could be picked up post-grad when people find out precisely what they really need.

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