BACK TO THE ROOTS: A LETTER TO THE ECONOMIST (July 22, 2009)

“Of all the economic bubbles that have been pricked,” you open your main leader on modern economic theory, “few have burst more spectacularly than the reputation of economics itself” (“What Went Wrong with Economics,” July 18, 2009). Spot on, as witnessed by the current economic crisis, which came as a big surprise to most economists of renown. The rest of the article is disappointing, though, as are the two in-depth articles on the topic (“The Other-Worldly Philosophers” and “Efficiency and Beyond”). In several places you compare and contrast the intellectual heirs of Keynes and so-called purists without ever touching the core of their dispute. Keynes himself eschewed mathematical models of any kind, and was bemused by the mathematical extravagances of some of his own followers. Mathematics was of value to him mainly for expository purposes. However, purists have pushed the models to treacherous extremes, always hoping for a Grand Theory of sorts that would explain all economic behavior in one fell swoop, as though economics is a species of physics. The irrational roots of human behavior were palpable to Keynes, and he repeatedly warned against mathematical excesses among his colleagues. The reconstruction of economics will have to follow this line of reasoning. Purism of any description, including that of many among Keynes’ heirs, has no place in a social science except as an intellectual exercise by those who are always fully aware of its own pitfalls. Ever-changing human behavior will forever remain a puzzle to us all, but we are better at outwitting our fellow human beings than any models can ever be.