Saturday, October 22, 2011

Coase on Marshall on Method

"Marshall on Method" R.H. Coase, Journal of Law and Economics, Vol. 18, No. 1 (Apr., 1975), p. 31:
What was it that Marshall found objectionable about the use of mathematics, at any rate, when used extensively? He thought we lacked the data to support any but relatively simple constructions. He feared that factors that could not easily be dealt with in mathematical form would be neglected. But above all, he thought that we would be tempted to engage in what he termed "mathematical diversions" or, as Pigou put it, we would be led to pursue "intellectual toys, imaginary problems not conforming to the conditions of real life." Marshall thought it would tend to divert our atten-tion from the real world in which poverty causes degradation and to the study of which he thought we should devote our whole energies.

In these days, when the mathematical method rides triumphant in economics, one may ask whether Marshall's fears were well-founded. Have we been tempted to embark on "long chains of reasoning" without adequate supporting data? Do we neglect factors difficult to put into mathematical form? Do we concern ourselves not with the puzzles presented by the real economic world but with the puzzles presented by other economists' analysis?... I very much doubt that what has happened in recent years would have led him to change his mind.

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