A Note to Econometricians: Science is More than Mathematics

by Christopher Westley

Earlier this year, the distinguished Harvard biologist, E.O. Wilson wrote of the limitations of mathematics in the sciences in the Wall Street Journal. This native son of Mobile, Alabama — better known elsewhere as the Father of Sociobiology — argued that the ability to formulate conceptual contributions to science does not stipulate mathematical expertise or even a mathematical component. Wilson concluded, “[f]ortunately, exceptional mathematical fluency is required in only a few disciplines, such as particle physics, astrophysics and information theory. Far more important throughout the rest of science is the ability to form concepts, during which the researcher conjures images and processes by intuition.” Wilson himself noted that he never learned calculus until his early 30s — after achieving tenure at Harvard — and he bemoans the loss in scientific knowledge that results when its would-be contributors choose other careers due to deficient mathematical training.

While this is not an issue for Austrian economists using a priori and deductive logic in the development of economic theory and concepts, mainstream economics remains wedded to the idea of using data as an end in itself, such that the availability of data alone often determines the extent of economic inquiry. As a result, concepts such as capital that do not lend themselves to mathematical analysis are often ignored by the mainstream or assumed to be constant (so as to simplify their use in modeling techniques). This shortcoming is one of the explanations for the mainstream’s infamous misdiagnosis of the housing bubble from a decade ago and is one of the primary reasons for the mainstream’s ignorance of malinvestments resulting from state money creation in general.

Read the rest here.