I’ve been reading Anthony Grafton’s Cardano’s Cosmos: The Worlds and Works of a Renaissance Astronomer which is a lot of fun. Grafton has a lively writing style, well exemplifed by the following (unfair but funny) dig at the dismal science.
At the most abstract level, astrologers ancient and early modern carried out the tasks that twentieth-century society assigns to the economist. Like the economist, the astrologer tried to bring the chaotic phenomena of everyday life into order by fitting them to sharply defined quantitative models. Like the economist, the astrologer insisted, when teaching and writing for professional peers, that astrology had only a limited ability to predict the future. … Like the economist, the astrologer proved willing in practice, when powerful clients demanded it, to predict individual outcomes anyhow. Like the economist, the astrologer generally found that the events did not match the prediction; and like the economist, the astrologer normally received as a reward for this confirmation of the powers of his art a better job and a higher salary.
Brecht’s “Leben des Galilei” has a good moment when Galileo’s daughter is getting married and her nurse says “Right, now let’s go consult a real astrologer.”
Which part was unfair?
The last bit is a bit harsh, I thought. I’m quite partial to economic reasoning myself, and probably biased. Although by sheer coincidence, I’ve just come out of a talk by Douglass North where he describes macroeconomics as having “elements of astrology,” so if someone who won the Nobel for economics is saying these things …
Nothing unfair there… Robertson Davies makes the comparison somewhere too, but I’m blanking on just where.
I think that the divide between academic and business economists is worth mentioning. The academics consider the shills on CNBC to be hacks, and the business folks with their tricked-out econometric models think that the eggheads are worse than useless.
Put concisely, this is the difference between explaining and predicting. The dig is well-written though, and to be fair, most people encounter the worst of the shills but not the academics.
Following up on Chris, the orthodox ‘efficient markets’ view is that large numbers of time series of interest (including nearly all those on which the CNBC types pontificate) follow a random walk and are therefore entirely unpredictable.
So an economist who makes a prediction in relation to variables like this is asserting some form of market failure.
As a practising economist, I have to say this is very unfair unless by economist you mean macroeconomist. In my 4 years in the profession I’ve never been involved by forecasting of any kind unless you count cost-benefit analysis model where what is esimated are potential social losses based on a framework of assumptions that is very transparently laid out. We (micro)economists perform very useful social functions e.g. in designing appropriate auction systems for governments, frameworks for competition, guidelines for licensing of IP, etc. Economics is basically a toolbox with great use in statecraft. Spiv financial markets macroeconomists which are the only exposure to economics thay laypeople get give the rest of us a bad name performing their useless tea leaf readings based on ‘gutfeeling’on how much some governor is going to raise interest rates.
“Robertson Davies makes the comparison somewhere too, but I’m blanking on just where.”
‘What’s Bred In The Bone’ - the bit where the English governess and spy in the German schloss is explaining astrology to Francis Cornish while he’s taking a break from forging old masters and counting concentration camp trains.
For those of you who haven’t yet encountered Davies (R.), that should whet yer appetite
If you’re interested in surprising affinities between science and alchemy, astrology, and prophecy, you might check out some of Matt Goldish’s writing on Isaac Newton or the first chapter of “The Sabbatean Prophets.” Newton not only had interests in the Kabbalah, but, apparently, had messianic tendencies as well.
“We (micro)economists perform very useful social functions e.g. in designing appropriate auction systems for governments, frameworks for competition, guidelines for licensing of IP, etc.”
We astrologers perform very useful functions in helping farmers prepare crops for next seasons weather, determining whether or not a woman is a witch by looking at the signs of her birth, providing guidelines for auspicious moments on which to sign treaties or behead traitors, etc. Also, when called in to observe monstrous births, we can predict how bad omens can be averted in the kingdom.
So what’s with this comparison to economists? Astrology, need I remind you, is a real science.
“the orthodox ‘efficient markets’ view is …”
Could you say more about this? I thought there were many versions of “efficient markets”, and I didn’t know any of them were “orthodox.”
For example, you might think that current market prices account for (1) all past prices, or (2) all public information, or (3) all public and private information.
Someone who believes (1) would still engage in the analysis of companies, just not their past prices. Someone who believes (2) might look at what insiders are saying.
Your comments about “asserting market failure” only seem to apply to people who believe (3); people who believe (1) or (2) might easily give analysis on CNBC, it seems to me (although a (2) would believe that their making the information public would immediately change the price).
You have to understand that wall street economist
forecasting what an economic variable will be this month is strictly a suckers game developed by the bond houses first and later stock brokers to generate volume.
The big houses do not care what the data will be, they make their profits on volume so by
getting suckers to bet on the monthly economic report they generate additional volume.
But there is a sucker born every minute, so despite the fact that I know of no investment institution that has consistently made money betting on the economic data, there are still enough traders willing to bet on anything that the game is well worth the trouble for the “house”.
Well, I thought Grafton and/or Cardano were intentionally slurring the difference between science and politics; “politically challenging documents” appears in there somewhere, of horoscopes. Even respectable economists are willing to be politically challenging.
À Gauche
Jeremy Alder
Amaravati
Anggarrgoon
Audhumlan Conspiracy
H.E. Baber
Philip Blosser
Paul Broderick
Matt Brown
Diana Buccafurni
Brandon Butler
Keith Burgess-Jackson
Certain Doubts
David Chalmers
Noam Chomsky
The Conservative Philosopher
Desert Landscapes
Denis Dutton
David Efird
Karl Elliott
David Estlund
Experimental Philosophy
Fake Barn County
Kai von Fintel
Russell Arben Fox
Garden of Forking Paths
Roger Gathman
Michael Green
Scott Hagaman
Helen Habermann
David Hildebrand
John Holbo
Christopher Grau
Jonathan Ichikawa
Tom Irish
Michelle Jenkins
Adam Kotsko
Barry Lam
Language Hat
Language Log
Christian Lee
Brian Leiter
Stephen Lenhart
Clayton Littlejohn
Roderick T. Long
Joshua Macy
Mad Grad
Jonathan Martin
Matthew McGrattan
Marc Moffett
Geoffrey Nunberg
Orange Philosophy
Philosophy Carnival
Philosophy, et cetera
Philosophy of Art
Douglas Portmore
Philosophy from the 617 (moribund)
Jeremy Pierce
Punishment Theory
Geoff Pynn
Timothy Quigley (moribund?)
Conor Roddy
Sappho's Breathing
Anders Schoubye
Wolfgang Schwartz
Scribo
Michael Sevel
Tom Stoneham (moribund)
Adam Swenson
Peter Suber
Eddie Thomas
Joe Ulatowski
Bruce Umbaugh
What is the name ...
Matt Weiner
Will Wilkinson
Jessica Wilson
Young Hegelian
Richard Zach
Psychology
Donyell Coleman
Deborah Frisch
Milt Rosenberg
Tom Stafford
Law
Ann Althouse
Stephen Bainbridge
Jack Balkin
Douglass A. Berman
Francesca Bignami
BlunkettWatch
Jack Bogdanski
Paul L. Caron
Conglomerate
Jeff Cooper
Disability Law
Displacement of Concepts
Wayne Eastman
Eric Fink
Victor Fleischer (on hiatus)
Peter Friedman
Michael Froomkin
Bernard Hibbitts
Walter Hutchens
InstaPundit
Andis Kaulins
Lawmeme
Edward Lee
Karl-Friedrich Lenz
Larry Lessig
Mirror of Justice
Eric Muller
Nathan Oman
Opinio Juris
John Palfrey
Ken Parish
Punishment Theory
Larry Ribstein
The Right Coast
D. Gordon Smith
Lawrence Solum
Peter Tillers
Transatlantic Assembly
Lawrence Velvel
David Wagner
Kim Weatherall
Yale Constitution Society
Tun Yin
History
Blogenspiel
Timothy Burke
Rebunk
Naomi Chana
Chapati Mystery
Cliopatria
Juan Cole
Cranky Professor
Greg Daly
James Davila
Sherman Dorn
Michael Drout
Frog in a Well
Frogs and Ravens
Early Modern Notes
Evan Garcia
George Mason History bloggers
Ghost in the Machine
Rebecca Goetz
Invisible Adjunct (inactive)
Jason Kuznicki
Konrad Mitchell Lawson
Danny Loss
Liberty and Power
Danny Loss
Ether MacAllum Stewart
Pam Mack
Heather Mathews
James Meadway
Medieval Studies
H.D. Miller
Caleb McDaniel
Marc Mulholland
Received Ideas
Renaissance Weblog
Nathaniel Robinson
Jacob Remes (moribund?)
Christopher Sheil
Red Ted
Time Travelling Is Easy
Brian Ulrich
Shana Worthen
Computers/media/communication
Lauren Andreacchi (moribund)
Eric Behrens
Joseph Bosco
Danah Boyd
David Brake
Collin Brooke
Maximilian Dornseif (moribund)
Jeff Erickson
Ed Felten
Lance Fortnow
Louise Ferguson
Anne Galloway
Jason Gallo
Josh Greenberg
Alex Halavais
Sariel Har-Peled
Tracy Kennedy
Tim Lambert
Liz Lawley
Michael O'Foghlu
Jose Luis Orihuela (moribund)
Alex Pang
Sebastian Paquet
Fernando Pereira
Pink Bunny of Battle
Ranting Professors
Jay Rosen
Ken Rufo
Douglas Rushkoff
Vika Safrin
Rob Schaap (Blogorrhoea)
Frank Schaap
Robert A. Stewart
Suresh Venkatasubramanian
Ray Trygstad
Jill Walker
Phil Windley
Siva Vaidahyanathan
Anthropology
Kerim Friedman
Alex Golub
Martijn de Koning
Nicholas Packwood
Geography
Stentor Danielson
Benjamin Heumann
Scott Whitlock
Education
Edward Bilodeau
Jenny D.
Richard Kahn
Progressive Teachers
Kelvin Thompson (defunct?)
Mark Byron
Business administration
Michael Watkins (moribund)
Literature, language, culture
Mike Arnzen
Brandon Barr
Michael Berube
The Blogora
Colin Brayton
John Bruce
Miriam Burstein
Chris Cagle
Jean Chu
Hans Coppens
Tyler Curtain
Cultural Revolution
Terry Dean
Joseph Duemer
Flaschenpost
Kathleen Fitzpatrick
Jonathan Goodwin
Rachael Groner
Alison Hale
Household Opera
Dennis Jerz
Jason Jones
Miriam Jones
Matthew Kirschenbaum
Steven Krause
Lilliputian Lilith
Catherine Liu
John Lovas
Gerald Lucas
Making Contact
Barry Mauer
Erin O'Connor
Print Culture
Clancy Ratcliff
Matthias Rip
A.G. Rud
Amardeep Singh
Steve Shaviro
Thanks ... Zombie
Vera Tobin
Chuck Tryon
University Diaries
Classics
Michael Hendry
David Meadows
Religion
AKM Adam
Ryan Overbey
Telford Work (moribund)
Library Science
Norma Bruce
Music
Kyle Gann
ionarts
Tim Rutherford-Johnson
Greg Sandow
Scott Spiegelberg
Biology/Medicine
Pradeep Atluri
Bloviator
Anthony Cox
Susan Ferrari (moribund)
Amy Greenwood
La Di Da
John M. Lynch
Charles Murtaugh (moribund)
Paul Z. Myers
Respectful of Otters
Josh Rosenau
Universal Acid
Amity Wilczek (moribund)
Theodore Wong (moribund)
Physics/Applied Physics
Trish Amuntrud
Sean Carroll
Jacques Distler
Stephen Hsu
Irascible Professor
Andrew Jaffe
Michael Nielsen
Chad Orzel
String Coffee Table
Math/Statistics
Dead Parrots
Andrew Gelman
Christopher Genovese
Moment, Linger on
Jason Rosenhouse
Vlorbik
Peter Woit
Complex Systems
Petter Holme
Luis Rocha
Cosma Shalizi
Bill Tozier
Chemistry
"Keneth Miles"
Engineering
Zack Amjal
Chris Hall
University Administration
Frank Admissions (moribund?)
Architecture/Urban development
City Comforts (urban planning)
Unfolio
Panchromatica
Earth Sciences
Our Take
Who Knows?
Bitch Ph.D.
Just Tenured
Playing School
Professor Goose
This Academic Life
Other sources of information
Arts and Letters Daily
Boston Review
Imprints
Political Theory Daily Review
Science and Technology Daily Review