Comment by wallace_f | Hacker News Reader

Comment by wallace_f | Hacker News Reader

From the article:

>"How Much Inequality Is Fair? Mathematical Principles of a Moral, Optimal, and Stable Capitalist Society, [...] perfect inequality, which has a definite mathematical form."

Income inequality does not have a "perfect mathematical form."

Since the stoics, clever folks adept with maths have realized that 'math/stats is the best way to lie or convince people you are right.'

Why? Because people trust in the intellectual rigor of maths. But while the language of maths is fundamental to our universe, formulating an argument with maths does not necessitate correctneas. even the hugely-influential economist Keynes, and others, believed that 'human behavior cannot be reduced to mathematics.'

Economics is currently, and has been for a century, trying to formulate as much as possible in the language of math, but we're consistently in disagreement and wrong. That is because Economists are almost always without the virtue of being able to do controlled experiments.

If you wanted to know the 'definite mathematically ideal' amount of inequality, you would first need to put forward a hypothesis which also defines ideal. "X is ideal for maximizing aggregate utility" is a reasonable hypothesis. Then for your experiment you would need many planet earths, and some way to to precisely measure people's utility.

This is all impossible. And as such, we would be wise to treat the current state of economics like that of 19th century medicine: somewhere between interesting-possibly-helpful and hogwash.

My view for the longest time is that most of mainstream Economics is best seen as "argument by rigorous analogy". The post-Samuelson heavy emphasis on math has allowed for really rigorous analogies, and at least provides a common language for discussing economics rather than wild philosophical/sociological speculation, but in the end analogies are only as good as their original abstraction.

That said it should be noted that there are parts of Economics that do work really well when applied (e.g. certain market mechanisms where profit-maximizing rational agents are a reasonable assumption.)

My biggest concern with Economics is that there is too much money in Economics. Unlike something like Physics or Chemistry, there are too many stakeholders with significant financial resources that have an interest in having the mainstream thought lean one way or another and the big Economic systems are too complex for "wrong" theories to be definitively "debunked". I'm not insinuating any academic misconduct, but what is considered successful/fruitful/popularized research is surely affected by money, in terms of funding departments, funding research, or well-financed employment at various institutions. Think taxes, financial regulation, discretionary monetary/fiscal policy, and so on. You will probably find that the "boring" parts of Economics like education, food and transport to be relatively level-headed. My advice for anyone interested in any Economic theory is to ask of any claim 1) Who are the stakeholders, who stands to gain? 2) How easily is the claim falsifiable?

And of course always remember the Gell-Mann Amnesia effect.

>You will probably find that the "boring" parts of Economics like education, food and transport to be relatively level-headed. My advice for anyone interested in any Economic theory is to ask of any claim 1) Who are the stakeholders, who stands to gain? 2) How easily is the claim falsifiable? And of course always remember the Gell-Mann Amnesia effect.

Yea, I think that is good advice.

I would just say those fields you listed are good, but maybe not best examples: something like Management Science/Applied Maths has a lot of useful, yet very boring, techniques for business, such as linear optimization. Education, food and even transport also has politics.

The economic "science" circling around the Fed is one day going to be seen as more egregious offense than the Nobel Prize given for the lobotomy procedure.

> Then for your experiment you would need many planet earths, and some way to to precisely measure people's utility.

Only the latter; you don't need a whole planet to study, and statistical control is real control.

OTOH, the missing bit is utterly intractable, so...

Or more convincingly, you may be able to use maths for that, but the number of variables would probably means you'd need to simulate each atom in the whole planet and their interactions perfectly.

And then we have Gödel's incompleteness theorems.

Which is not known to hold for quantum logic systems as far as we know.

Regardless, the classic part is highly intractable already.

I couldn't agree more.

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