a reminder from a hundred years ago: economics is not about studying abstract or “economic” people
2024-09-08
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modern economics is experiencing a crisis of significance: it is believed that it can neither provide people with predictions of economic events or economic evolution trends, nor provide its own disciplinary solutions for the future. when the financial crisis broke out in 2008, economists were in a panic. the complexity and unmeasurability of human behavior frustrated economists collectively. although this is not the first time that economics has collapsed in front of the "real world", since then, the voices questioning economics have become more and more intensive.
what's wrong with economics?
still from the big short (2015).
when people trace back to the eve of the birth of modern economics, a name from more than a hundred years ago begins to emerge: alfred marshall. he seems to be the culprit of all this and has created "trouble" for modern economics.
on july 13, 1924, marshall died. since marshall, the entire history of modern economics can be simply summarized as "specialization and its dissatisfaction". on the one hand, the analytical techniques of economics have become more and more professional and sophisticated, and have always maintained a golden position closest to natural science, which is far beyond the reach of other social sciences. on the other hand, it is troubled by over-specialization. all this started at the moment when the door to modern economics was opened.
in 1995, economist david colander bluntly said: "marshall is outdated. for undergraduates, (his theory) is at best a teaching stepping stone, and is not relevant to modern economics." he has undoubtedly entered the hall of classical economists, but fewer people talk about marshall. he will only be explained when textbooks or economic history cannot avoid "marshall". his name is not as familiar to readers as other classical economists. people have forgotten how prudently and presciently he talked about economic research.
enter marshall's world and hear his own thoughts on economic research, mathematics, language, and disagreement.
this article is a virtual conversation.
this article is from page b05 of the september 6, 2024 special issue of beijing news book review weekly titled "the troubles of alfred marshall."
b01「theme」the trouble with alfred marshall
b02-b03「theme」economists who care about people
b04「topic」discipline changes quietly taking place in the "notes"
b05 "theme" economics is not about an abstract or "economic" person.
b06-b07「literature」《lafleur》 the book of the "holy fool" that travels through time
b08 "literature" "imaginary sea" prophecies and warnings in the era of artificial intelligence
written and compiled by luodong
mathematics is not the goal.
it is a method
q: mr. marshall, you have promoted the mathematization of economics, but you have many concerns about the publication and reading of economic research works. you once said, "when we have to use a lot of mathematical symbols, it is very troublesome for anyone except the author himself." so, what is good economic research?
answer:towards the end of my time teaching the subject, i felt more and more that beautiful mathematical theorems dealing with economic assumptions were unlikely to be good economics, and i became more and more formulaic: (1) treat mathematics as a shorthand language rather than as a tool of inquiry; (2) stick with them until they accomplish their purpose; (3) translate them into words; (4) then give examples of their importance in real life; and (5) discard the mathematics.
"principles of economics", written by marshall [uk], translated by zhu zhitai and chen liangbi, commercial press, may 2019.
q: mathematics is not your goal, but your effective method.
answer:mathematical training helps to express in language of great economy certain general relations and certain brief processes of economic reasoning which can be expressed in ordinary language, but not with the same distinctness. above all, experience in the mathematical treatment of physical problems has given us a deeper understanding of the interaction of economic changes than could be obtained by any other method. the direct application of mathematical reasoning to the discovery of economic truths has been of great help in the study of statistical averages and chances, and in the measurement of the degree of agreement of related statistical tables.
still from "a beautiful mind" (2001).
q: economics pursues precision in expression, but because it studies heterogeneous people and economic activities, it is impossible to invent a completely new "scientific language". mathematics can solve a considerable part of it. however, even if economics has been fully developed and has become the largest discipline in the field of social sciences, we cannot make a complete sentence using only economic terms. we still have to pick up everyday language. however, people seem to pay more attention to how to analyze the collected research materials, and not pay much attention to the language used in the process of data collection (such as the setting of questionnaire questions) and writing?
answer:in natural science, once we see a group of things with a certain kind of common characteristics and tend to talk about them together, we can classify these things into one category and give them a special name. moreover, when a new concept occurs, we immediately create a new term to represent it. however, economics dare not do this. the theory of economics must be expressed in a language that everyone understands. therefore, economics must strive to make itself consistent with the terms commonly used in daily life, and must use these terms as commonly used as far as possible.
marshall writing in the forest.
even the most formal writers of economics have to do this, otherwise they would not have enough words to use. unfortunately, however, they never admit that they are being careless with words, and sometimes they themselves do not even realize that they are being careless with words. they begin to explain economics with bold and strict definitions in order to reassure their readers. because they do not warn readers that they must always look for special explanations in the context, readers cannot understand the original intention of the author from the work; they may even misunderstand the author and blame him wrongly.
many of the facts of economic research can be classified into different categories, and clear statements can be made about these categories, which in the past were often close to correct in terms of numbers. in this way, it is easier for him to seek causes and effects that are beneath the surface and difficult to see, to analyze complex situations into individual factors, and to reconstruct many factors into a whole. of course, this only refers to the part of the facts that can be summarized in mathematical symbols.
economic research cannot be separated from hypothetical statements
q: regarding the dilemma of expression, it is still because of economics. the dilemma of expression - whether it is mathematics or daily language - may be particularly prominent in the discovery and description of laws. i wonder if you agree that economics is also a discipline dedicated to discovering the laws of human economic activities? readers have such expectations of economics, so in 2008, when everyone found that economists had no successful predictions for this storm, they were extremely disappointed.
answer:the laws of economics are comparable to those of the tides, but not to the simple and precise laws of gravity. because the actions of men are so varied and uncertain, the best statements we can make in the science of human behavior are necessarily imprecise and defective.
in the sciences which concern man, precision is not attainable as in the natural sciences. the historian is hampered by the inability to carry out experiments, and even more by the want of objective criteria by which to estimate the relative importance of historical events. such estimates are present at almost every stage of his argument. he cannot conclude that one cause, or class of causes, has been outweighed by another, or class of causes. only with great effort can he learn how much he has relied on his own subjective impressions. the economist is also hampered by this difficulty.
in all these respects, economics deals with a real person: not an abstract or "economic" person, but a person of flesh and blood. the person they deal with is one who is influenced by selfish motives in his business life and is therefore largely concerned with these motives. but this person is neither without vanity and carelessness, nor does he dislike doing good work for the sake of doing good work. in short, he is a person who likes a good life for the sake of loving a good life. economists deal with a real person, but mainly with those aspects of life in which the action of motives is so regular as to be predictable.
"before the great transformation: from adam smith to alfred marshall", written by callum williams, translated by huang yanfeng, bayeux wenhui publishing house, february 2023.
q: economic research often uses various assumptions. at first, it was assumed that human behavior is rational, such as "economic man". later, some schools of thought began to assume that people are influenced by culture and ideas. especially when talking about laws, there always seem to be some assumptions. why are there so many assumptions in economic writing?
answer:in economics such statements need to be repeated more than elsewhere, because economics is more easily quoted than any other scientific doctrine by those who have no scientific training and who perhaps have only heard it indirectly and out of context. one reason why everyday conversation is simpler in form than a scientific paper is that in conversation we can safely omit hypothetical statements, because if the listener himself does not pay attention to such statements, we will quickly discover the misunderstanding and correct it.
adam smith and many earlier writers on economics, following the custom of conversation, have gained an apparent simplicity by omitting hypothetical statements, but this has exposed them to constant misunderstandings, and has caused much waste of time and trouble in useless disputes; the apparent peace of mind they have gained is not worth the cost.
what economists need most is imagination
q: your work and efforts have made economics a modern discipline, and the disciplinarization and specialization of modern economics has begun. since the second half of the 20th century, the over-specialization of disciplines has become a new problem. at this time, people can't help but think of the 19th century, when economics, history, political science and even the emerging sociology were not completely differentiated and were in a relatively chaotic state. in this way, we are swinging between specialization and chaos. what is your opinion?
answer:in the 19th century, many people believed, like comte (the founder of sociology), that any useful study of human social behavior was as broad as the entire social science. they believed that the various aspects of social life were so closely connected that it would be futile to study any one of them alone; they urged economists to abandon economic research and concentrate on jointly developing a unified and all-encompassing social science. however, the scope of human social behavior is too vast and complex to be analyzed and explained by a single science.
natural science made slow progress while the brilliant and impatient genius of the greeks persisted in seeking a single foundation to explain all natural phenomena. modern natural science has made great progress by breaking up broad problems into their component parts. there is undoubtedly a unity underlying all natural forces, but any progress in discovering this unity depends as much on knowledge gained by persistent special research as on accidental observations of the whole range of nature.
still from modern times (1936).
on the other hand, it must be fully acknowledged that even in the natural sciences, those who specialize in a particular field have the duty to keep in constant contact with those who study similar fields. specialists, whose eyes never extend beyond their own sphere, often see things out of proportion to reality. much of the knowledge they gather is of relatively little use. they go round in circles on the details of old problems, which for the most part lose their significance and are replaced by new problems raised from new points of view.
q: so you had so many concerns about specialization back then. this is the inevitable fate of modern disciplines. we need to rely on specialization to enhance our understanding of people and the world, but we also need to be wary of going too far. how do you think we can deal with this contradiction?
answer:an economist requires three great mental abilities: perception, imagination, and reasoning. of these, imagination is what he needs most, so that he can explore the subtle causes of visible events, and the subtle effects of visible causes.
question: what if the causes and results are different?
answer:even among the most careful thinkers there are often differences of opinion. questions of such controversy must generally be settled by judgments of the practical convenience of different courses; and such judgments cannot always be established or overturned by scientific reasoning: a margin of controversy must be left. but there is no such margin in the analysis itself. if two people differ about an analysis, they cannot both be right. we may expect that the progress of economics will gradually place such analysis on a solid foundation.
part of marshall's answer in this article refers to the following books:
(1) principles of economics, by marshall, translated by zhu zhitai and chen liangbi, commercial press, may 2019.
(2) before the great transformation: from adam smith to alfred marshall, by callum williams, translated by huang yanfeng, beiye|wenhui press, february 2023.
(3) great economic thinkers, edited by jonathan conlin, translated by zhang yun, oriental publishing house, may 2020.
author/luo dong
editor/gong zhaohua and he anan
proofreading/xue jingning
