A meeting in Dallas in December of 1984 was attended by many economists, among whom are W. Arthur Lewis, Kenneth Arrow, Robert Solow, Paul David and Peter Temin. The men are chiefly interested in the authority of economics as a science.
William Parker from Yale opens the meeting denouncing the mathematical turn that economics has taken. Kenneth Arrow talks about how economic history is like the history of the world as interpreted by geology. Virtually all the study of geology is done in labs yet it's a flourishing subject. Robert Solow says that the hard sciences are good at dealing with complex systems and topics such as hydrogen atoms or the optic nerve. Topics in economics are far more complex.
Paul David and economic historian gives a good example of the way the typewriter keyboard has developed. He says that the QWERTY arrangement isn't the best system for placing letters on a keyboard, and that there were a few arrangements that were even proven to be better. It was found that Typists preferred the QWERTY arrangement because it was the most prevalent and that they wanted their skills to be portable. This created an effect that caused all the other designs to disappear. This was viewed as a market failure because it did not result in the single best outcome. QWERTY had increasing returns as it gained traction in the marketplace.
The meeting in Dallas was interesting to say the least, however they were missing some important pieces to the discussion namely Paul Krugman, Elhanan Helpman, Paul Romer and the rest of "the kids." it's apparent that the older generation just talking among themselves and that they will have little more effect on the future of economics.
B for Will - check for typos!
ReplyDeleteWe still use the QWERTY metaphor quite a bit, but it's been shot full of holes. It turns out there may not have been better arrangements, so the lock-in story may not hold up. It's too good a story for most people to let go of though.