...that post about NNT reminded me that my Amazon wishlist is getting bigger and bigger. But it's been reduced from a wishlist to a list of booksmarks that I use to remind myself of the books I'd like to read. Hint!
It's been a very long time since I posted anything but let's not waste time on explanations and excuses.
An article in The Economist introduced me to the thinking of someone called Nassim Nicholas Taleb, one of whose main theses is that we place far too much troth by our ability to predict and model the future than should rightly be the case. Many of our correct "predictions", in other words, are down to pure luck.
And the One Big Reason why this man is my idol is a little scribble he has on his website where he trashes economic models that exist in isolation. Like many others, though perhaps unjustifiably given my status as a non-expert, I don't place much faith in economists and their predictions, beyond general truisms that any reasonably informed person could tell you. But I have never been able to clearly explain my lack of faith. NNT does (scroll down on his page to the entry for May 22, 2006):
There are central inseparabilities obfuscated by the growth of academic disciplines and the strengthening of the departmental cliques. If economic variables depend on geodesic effects, or weather patterns, or political stability, then economics cannot be used to do anything useful because of the “everything else being equal” is a Platonified classroom reduction made ineffectual by severe interdependence between the variables. In the end, economics does not exist “scientifically” as a separate discipline; those few commendable economists who are not charlatans are trying to patch it up now by introducing sub-branches such as “neuroeconomics”, “behavioral economics”, “behavioral finance”, etc. In my Scandal of Prediction (Book II of The Black Swan) I noted that when an economist fails to predict outliers he often invokes earthquakes or revolutions, claiming that he is not into geodesics or political science –instead of incorporating these into his studies or accepting that his field does not exist in isolation (indeed economics is the most insular field when it comes to quoting other works). But since these “off-model” elements dominate us, he should then accept that he is just providing novocain, little more –in other words he is empirically equivalent to the astrologist, but without the aesthetics. Or he should accept that economics should be moral philosophy, decision theory, or epistemology, and concern itself with the formation of choices under uncertainty, and leave the equations to more qualified, more empirical, less Gaussianized, and more honest, people.
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