Markus Strasser

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Economics should focus less on generalities and real actual problems (like Biologists)

Quoted from a conversation between Tyler Cowen and Jeffrey Sachs

Context matters especially in complex systems

The complex phenomena do not lend themselves to slogans, to easy answers, or to single solutions.

They’re more like engineering problems, agronomy problems, or health problems. You have to understand the context, the technologies you have at hand, the choice sets that you really have, in order to be constructive in this.

There may be room for a few pure theorists in a field like this. In my life I’ve met a few brilliant geniuses, very few, who could sit in an office and think great thoughts and contribute to the world. It’s a very small number, by the way. Then I’ve met lots of people who generalize, which doesn’t move me because I don’t find it helpful. I find it distracting, confusing, misguided, or misplaced.

For most of us mortals, I think the deep engagement in real problems is crucial. I wouldn’t want to train doctors without the medical students walking the wards with their mentors. I don’t like training economists without them grappling with real problems in real places and learning the complexity of the interacting physical, technological, political, economic, natural systems.

Economists should act more like biologists

If Watson and Crick had written their 1953 paper saying, “Assume n base pairs.” They can match by [n × (n − 1)] / 2 combinations. It wouldn’t be a very good model of DNA.

They actually said there are four base pairs, and there are two natural matchings. It happens to be a double helix.

We’re going to study the detail out of that for the next 40 years. Yeah, it’s arbitrary. There could be other DNA, but we’re going to study this one.

Economists don’t do that, because we have a harder job, in some sense, which is that we’re not studying a stable environment.

We’re studying a changing environment. Whatever we study in depth will be out of date. We’re looking at a moving target.

To compensate for that by never getting into detail has been our approach, but we’re always behind the curve, then.

We never have good answers when they’re needed. That’s what I would like us to study.

We have so much statistical machinery to ask the question, “What can you learn from this dataset?” That’s the wrong question because the dataset is always a tiny, tiny fraction of what you can know about the problem that you’re studying.

If you want to know about the problem, get out there and learn about it. Don’t think that you’re going to find it in your dataset.

Economics should focus less on generalities and real actual problems (like Biologists)