Economics: Too hard or too easy

Economics: Too hard or too easy

This is a passage about Keynes from The Worldly Philosophers. My comment follows.

By 1935 it was already a brilliantly established career. The book on Indian Currency and Finance had been a tour de force, albeit a small one; The Economic Consequences of the Peace had made an éclat; and the Treatise on Probability was an equal triumph, although far more specialized. An amusing incident in regard to this last book: Keynes was having dinner with Max Planck, the mathematical genius who was responsible for the development of quantum mechanics, one of the more bewildering achievements of the human mind. Planck turned to Keynes and told him that he had once considered going into economics himself. But he had decided against it—it was too hard. Keynes repeated the story with relish to a friend back at Cambridge. “Why, that’s odd,” said the friend. “Bertrand Russell was telling me just the other day that he’d also thought about going into economics. But he decided it was too easy.” (145)

When Russell called economics too easy, he might think like a mathematical economist. Build a mathematical model from some arbitrary assumptions, something like Arrow-Debreu. Then call any real world phenomenon not consistent with the mathematical model as imperfection.

When Planck called economics too hard, he might think as a physicist. Build a mathematical model from fundamental physical laws.  The model has to be consistent with reality. This is hard. This is what we have achieved.