Lecture: Too Much Math, Too Little History in Economics

Introduction

Speakers: Professors advocating and opposing the proposition
Proposition: There is too much math and too little history in economics as currently taught.
Arguments: Various perspectives on the balance between mathematical modeling and historical context in economics.

Objective: Understand how economies work.
Two Approaches: Math and History.
Math: Focus on generating provable propositions (branch of logic, epistemology of necessity)
- Emphasis on rigorous, elegant laws akin to laws of celestial mechanics.
- Platonic view: Beauty in impressive mathematics.
History: Acts as a reality check.
- Examples: Financial crises challenging the assumptions of market rationality.
- Includes economic history, history of economic thought, political and social history.

Math as a Thinking Tool: Ensures logical consistency and completeness in economic theories.
- Example: Labor supply and wage changes (considering the effect of Leisure).
- Math helps to avoid simplistic narratives.
Math and Complexity: Math helps in dealing with complex economic systems, especially useful with computers for large-scale interactions (e.g., macroeconomics, microeconomics).
Current Practice: Extensive empirical work, including econometrics and data analysis, prevalent in economics today.
- Example: Discrimination study (fake resumes with black vs. white names) impacting policy.
- Minimum wage research leading to policy changes.

Loss of Pluralism and Imagination: History and different schools of thought provide diverse perspectives.
Physics Envy: Economics tries to emulate natural sciences, often to its detriment.
Teaching Deficiencies: Curriculum focused too much on math, not enough on real-world applications and historical context.
- Example: Past successful periods of economic growth with different policy and governance contexts.

Contextual Understanding: Historical knowledge provides context and deeper understanding of economic phenomena.
- Example: Keynesian Revolution & Great Depression, Friedman’s Monetarism & 1970s Inflation.
Debunking Myths: Understanding the real development history of current economic superpowers (e.g., Britain and the U.S. were highly protectionist during development).
Moral Duty: Avoid repeating past mistakes through historical awareness (e.g., adverse impacts of central planning, austerity policies).
Practical Skills: Incorporating history develops broader skills that are also marketable in various employment sectors beyond traditional economic roles.

Difference in Perspectives: Critics argue for a more balanced and diversified curriculum combining both quantitative and qualitative approaches. Advocates for math argue its importance but acknowledge the need for historical context.
Empirical Evidence: Empirical work in modern economics is extensive and often policy-oriented, challenging the notion of economics being too theoretical.
Teaching Evolution: Recognized that teaching must evolve to better blend economics with practical, real-world applications.

General Consensus: Both math and history are important. A more balanced approach, incorporating both, enriches the understanding and application of economics.