Taleb on Mainstream Economics

July 12, 2006 11:09 AM by Robert Murphy | Other posts by Robert Murphy | Comments (2)

I've been reading Nassim Taleb's bestselling Fooled by Randomness. I think Austrians would really like this book. (Elsewhere Taleb has favorable things to say of Hayek.) Here's his take on (mainstream) economics:

What has gone with the development of economics as a science? Answer: There was a bunch of intelligent people who felt compelled to use mathematics just to tell themselves that they were rigorous in their thinking, that theirs was a science. Someone in a great rush decided to introduce mathematical modeling techniques (culprits: Leon Walras, Gerard Debreu, Paul Samuelson) without considering the fact that either the class of mathematics they were using was too restrictive for the class of problems they were dealing with, or that perhaps they should be aware that the precision of the language of mathematics could lead people to believe that they had solutions when in fact they had none...Indeed the mathematics they dealt with did not work in the real world, possibly because we needed richer classes of processes--and they refused to accept the fact that no mathematics at all was probably better. (p. 177)