I am 1) an engineer by training with some heavy duty physics thrown in, and 2) a known economist sympathizer. If there is a useful parallel between conservation of energy and some principle of economics, I am not aware of what that might be.
On the other hand, there is a lot of useful analysis in physics and engineering that can be done without invoking conservation of energy. Even if a parallel to conservation of energy does not exist in economics, there may still be other useful parallels to draw. For example, the business cycle behaves strikingly like an automatic control system that has a positive feedback loop and damping. (By the way, analysis of automatic control systems does not invoke conservation of energy. Rather, the assumption is that an unlimited external source of energy is always available--sort of like Simon's concepts from the Ultimate Resource.) Elegant mathematical techniques (Laplace transform) are used to analyze automatic control systems. The parallel goes further. A subclass of automatic control systems are those that employ sampled feedback loops, rather than continuous feedback loops. It is well known that a stable automatic control system involving continuous feedback can become unstable if that same feedback is, instead, sampled. The longer the sampling interval, the greater the potential for introducing instability. The potential instability derives from imperfect knowledge between samples. Other elegant mathematical techniques (not Laplace transform) are used to analyze automatic control systems with sampled feedback. The parallel with economics is Von Mises' notion that the business cycle is driven by imperfect knowledge. Walt Warnick -----Original Message----- From: john hull [mailto:[EMAIL PROTECTED]] Sent: Wednesday, February 13, 2002 8:46 PM To: [EMAIL PROTECTED] Subject: Re: mathematical assumptions (Physics & Economics) Thank you all for your comments and suggestions. I appreciate them very much! I just re-read the rules for the armchair mailing list, and I hope this is not too methodological or whatever. Sorry about that! I actually have read Mirowski's "More Heat Than Light" and found it quite informative. Interestingly, Richard Feynman, of all people, blew Mirowski's arguments out of the water (ex ante) with an almost throw-away line in his Physics Lectures. He asked himself why was math an appropriate tool for studying physical models. His answer was merely that math is a pre-packaged, internally consistent logic that physicists can apply to the aformentioned models. Hmm. By extension, that reasoning seemed to apply to economics quite well. It seemed to me that Mirowski's thesis was that math, specifically the math used in neo-classical economics, is an inappropriate tool for economic study because economics lacks a conservation rule analogous to the conservation of energy in Newtonian physics. However, if preferences are constant over time, then the conservation rule should be satisfied, right? I think that is my weakest link. I hope that last paragraph hasn't made me to appear a bonehead answering his own questions. (I'm boneheaded enough without doing that.) I guess what I was origially wondering was not "Is math appropriate?" But rather, given that math is appropriate, are the assumptions about rationality, preferences, convexity, continuity, inter alia, as well as some of the more ad hoc assumptions of many macro models as reasonable as the assumtions made in the king of all sciences? Obviously, I'm not really sure how to phrase the question in the most clear manner. I apologize for that. If this question is inappropriate for this forum, please let me know. Thanks again, jsh --- "Seth H. Giertz" <[EMAIL PROTECTED]> wrote: > I just checked out *More Heat Than Light: Economics > as > Social Physics: Physics as Nature's Economics*, > also > by Philip Mirowski. > > Here are a couple of quotes from the introduction > that > I found interesting: > > "One rapidly discovers that the resemblances of the > theories [of physics and economics] are uncanny, and > one reason they are uncanny is because the > progenitors > of neoclassical economic theory boldly copied the > reigning physical theories in the 1870s. > ...Neoclassicals did not imitate physics in a > desultory or superficial manner; no they copied > their > models mostly term for term and symbol for symbol, > and > said so. > > "Neoclassical economics made savvy use of the > resonances between body, motion, and values by > engaging in a brazen daylight robbery: The > Marginalists appropriated the mathematical > formalisms > of mid-nineteenth century energy physics, ..., made > them their own by changing the labels on the > variables, and then trumpeted the triumph of a truly > 'scientific economics.' Utility became the analogue > of potential energy; and the Marginalist > Revolutionaries marched off to do battle with > classical, Historicist, and Marxian economists. > Unfortunately, there was one little oversight: The > neoclassicals had neglected to appropriate the most > important part of the formalism, ... namely, the > conservation of energy." (pp 3 & 9) > > >From skimming a couple of later chapters, it seems > Mirowski also finds a close relationship with later > 20th century economics and 19th century physics. > (He > notes that on the surface Samuelson draws an > analogous > relationship between modern physics and modern > economics, but when Mirowski digs deeper, he finds > it > to be simply a variation of 19th century physics in > disguise.) He seems to credit/blame Samuelson for > much of the 20th century development - at least > that's > what I gathered from reading a few pages here and > there. > > Seth Giertz > > --- "Ole J. Rogeberg" <[EMAIL PROTECTED]> > wrote: > > I can give you a completely opposite reference :-) > > > > Philip Mirowski, in the Cambridge Journal of > > Economics, nr. 8, 1984, pp. > > 361-379 has an article "Physics and the > marginalist > > revolution," where he > > argues that the similarities between the physics > of > > the 1800s and the > > economics of the 20th century results from > > economists taking the > > mathematical models then in vogue and > reinterpreting > > them in economic > > terms. "Neoclassical economics is bowdlerised > > nineteenth century physics." > > The second part of his argument is that this is > not > > reasonable. > > > > The article was fun, whatever one may think of the > > conclusions. Apparently, > > this is a major theme of Mirowski. I gather that > > he's written on this > > subject elsewhere too. And been strongly > criticised > > by others, of course. > > > > Ole > > > > At 09:25 11.02.2002 -0800, you wrote: > > >Dear all, > > > > > >I once heard about a paper by a physcist who > > >juxtaposed the mathematical assumptions in > > economics > > >with the mathematical assumptions in physics. > > >Evidently the author found the assumptions in > > >economics to be quite reasonable. I've never > been > > >able to locate it. Is anybody familiar with such > a > > >work, or anything similar? > > > > > >Curiously, > > >jsh > > > > > > >__________________________________________________ > > >Do You Yahoo!? > > >Send FREE Valentine eCards with Yahoo! Greetings! > > >http://greetings.yahoo.com > > > > > __________________________________________________ > Do You Yahoo!? > Send FREE Valentine eCards with Yahoo! Greetings! > http://greetings.yahoo.com __________________________________________________ Do You Yahoo!? Send FREE Valentine eCards with Yahoo! 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