It turns out that I wrote two versions of the piece on the financial crisis I posted earlier. The other version, which you’ll find posted here, says basically the same thing but contains the following comment which now haunts me. I had written:
“Unfortunately, most economists appear to have little understanding of system design. (When I was in college, many of those who failed our engineering subjects shifted to economics.) Instead of following good principles of design, our economists repeat the most common mistake of amateur programmers: they rely on global variables.”
What a twist of irony! Although I did pass my electrical engineering course, I’m now an MA economics student in the same university where I learned engineering more than 25 years ago.
It is interesting, though, that many of the early founders of neoclassical economics, like Vilfredo Pareto and Leon Walras had engineering training.
An insightful historical analysis by Philip Mirowski (Against Mechanism) traces the development of neoclassical economics from 19th century physics, whose mathematical methods the early neoclassicals imported en toto and applied to the analysis of consumer utility, producer profit and market equilibrium. The methods of physics, Mirowski says, have changed radically since then, but neoclassical economics remains mired in 19th century physics methods of analysis. I am still trying to grasp the full meaning of Mirowski’s analysis, however.
In another piece (I don’t recall now if in the same book or another), Mirowski also commented that economics needs an algebra of its own, which also haunts me in a different way. It has challenged me to learn more about different algebras. (Aside from the more commonly-known high school/college algebra, there’s boolean algebra, matrix algebra, vector algebra, set algebra, etc.) When I mentioned this to an economist who was currently taking a PhD in Math, he thought about it for a while and then said, “actually, that’s true.”
Another area to explore.