Re: Article in the Chronicle of Higher Education

["J. Barkley Rosser, Jr." <rosserjb@xxxxxxx>]

Ted,
      In case you did not notice, I did not defend deductivism
in general, and indeed declared that current math econ is
largely moving beyond it.
      That said I am definitely going to defend the Nobel for
John Nash, and not just because of the romanticism of
"A Beautiful Mind" and his comeback from insanity,
fascinating as that may be.  The Nash equilibrium is
indeed a profound concept worthy of a Nobel Prize.  I
would note that it has been taken over by biologists for
the analysis of evolutionary processes.  Modern evolutionary
game theory in turn came back into economics from people
who became aware of the work of  John Maynard Smith in biology,
with Reinhard Selten perhaps being the key initial figure in
economics.  But the biologists, in turn, drew heavily on Nash.
      If you want to diss Nash, I suggest you read Phil
Mirowski's account of things in his _Machine Dreams_,
where he says that von Neumann is the great genius
and Nash is just a hopeless paranoid, that even his equilibrium
is simply paranoia writ large.  The opposite view is given in
the book version of _A Beautiful Mind_ by Sylvia Nasar (the
movie did not even have a von Neumann character in it).
Needless to say, I think the reality is somewhere in between
these two somewhat potted accounts.
Barkley Rosser

----- Original Message -----
From: "Ted Winslow" <egwinslow@xxxxxxxxxx>
To: <pkt@xxxxxxxxxxxxxxxx>
Sent: Wednesday, January 29, 2003 12:19 PM
Subject: Re: Article in the Chronicle of Higher Education


>
> Barkley wrote:
>
> > I would associate "rigor" with "logical" and
> > "consistent."   Properly done deductivism is
> > rigorous, but it is possible to be rigorous
> > without being deductivist.  And much deduction
> > is empty.  Rigor is no guarantee of a serious
> > argument.  It may be empty rigor, rigor mortis.
>
> Whitehead's point is that the axiomatic method itself - "deductivism" -
> is limited in its applicability by the ontological fact of internal
> relations.  It isn't just that the axioms may be false; it is that to
> produce clearly defined axioms you need to be able to abstract from
> internal relations since the weaving by argument from these axioms of
> "novel compositions," i.e. changed relations, may invalidate the axioms
> on which the argument rests.  In social theory this applies to any
> argument which takes the "identities" of the individuals whose
> behaviour is being theorized as fixed.
>
> Keynes's monetary theory provides an example.  It can't be captured by
> an analysis that axiomatically fixes the identities of agents because
> it assumes that in certain circumstances, those that produce a monetary
> crisis, these identities change.   Conditions of stress can lead to
> nervous breakdown.
>
> "Why should anyone outside a lunatic asylum wish to use money as a
> store of wealth?
> "Because, partly on reasonable and partly on instinctive grounds, our
> desire to hold money as a store of wealth is a barometer of the degree
> of our distrust of our own calculations and conventions concerning the
> future.  Even though this feeling about money is itself conventional or
> instinctive, it operates, so to speak, at a deeper level of our
> motivation.  It takes charge at the moments when the higher, more
> precarious conventions have weakened.  The possession of actual money
> lulls our disquietude; and the premium which we require to make us part
> with money is the measure of the degree of our disquietude."  (XIV, p.
> 116)
>
> Here is a description by Keynes of an actual crisis:
>
> "the most strking feature of the immediate situation is the
> extraordinary disparity between yields in London and yields in New York
> of comparable securities.  It seems to me quite impossible that the
> present situation can long persist.  And I should have supposed it to
> be probable that the readjustment would be brought about by a
> substantial rise in prices of prime fixed-interest securities in New
> York.  The present may be the chance of a lifetime for the purchase of
> the latter.  Obviously everyone in New York is scared so stiff as to be
> unable to move.  But that may be the opportunity of others away from
> any unsettling influence of the local atmosphere.  No serious risk can
> arise unless the existing financial system in America is going to peg
> out altogether.  I suppose that that is just possible, but I cannot
> believe that it is probable." (XXI, p. 113)
>
> How can the idea of individuals as able in certain circumstances to
> become "scared so stiff as to be unable to move" be taken account of by
> an approach that axiomatically fixes their identities.
>
> I know that Keynes could not have been awarded the economics "Nobel".
> My point was that economics has become a discipline in which Keynes's
> insights into human nature and human psychology, such as the one to
> which I've just pointed, are misunderstood, marginalized and
> disregarded while the ideas of John Nash about the same things are
> treated as the work of genius, of a "beautiful mind."
>
> Ted
>
>