"Too much Maths, too little History: The problem of Economics"

  • Published on Dec 18, 2015
  • This is a recording of the debate hosted by the LSE Economic History Department, in collaboration with the LSESU Economic History Society and the LSESU Economics Society.

    Proposition Team - Lord Robert Skidelsky & Dr. Ha-Joon Chang
    Opposition Team - Prof. Steve Pisckhe & Prof. Francesco Caselli
    Chair - Professor James Foreman-Peck
    The LSE is currently the only institution to have a separate EH department. We want to encourage students and academics alike to rethink the methodologies used to explain how our world works.
    Do we use the theoretical and econometrical method to create models with assumptions to distil the complexities of human nature and produce measurable results? Or do we use the historical process of considering all factors to provide a more holistic explanation? More importantly, which method should be adopted to better understand increasingly complex economic phenomena in the future?
    We are striving to provide our students breadth that exceeds their current theoretical studies. Hence, whilst we recognise the importance of economic history in allowing us to become closer to the truth and produce more intricate portrayal of events, the significance of models and mathematics remains to be emphasised.
    Indeed, we wish to have this controversially named debate in order to both highlight the tension between the two disciplines and to produce a more nuanced overview in defence of the future of Economics.

Comments • 100

  • Leonardo Torcivia
    Leonardo Torcivia 3 days ago

    Absolutely brilliant!!!!

  • Saleem yousaf
    Saleem yousaf 8 days ago

    It is amazing that people actually believe that humans are rational actors in the economics world...having studied economics....most of what is taught at University is junk economics......quote from Michael Hudson...economist par excellence

  • rautibo
    rautibo Month ago +1

    Economics are too much based on the rational choice, and in meaningless models. macroeconomics is just aggregating micro and that's not how life works. you cant sum up preferences and theorize a country

  • rautibo
    rautibo Month ago +2

    Francesco was very arrogant and aggressive. I'd rather be taught by those two economic history professors. In fact all my former history of economics, economics thought teachers, were far more interesting people and taught better and with morepassion than the macro teachers.

  • just another human
    just another human Month ago +1

    "Too little banking: the problem of economics"
    if the average man realized economists didn't "include" the money system in their studies (on account of it having been expunged from university curriculums) he'd wonder what's the point of economics

  • Marmelademeister
    Marmelademeister 3 months ago

    The vast majority of economics and (non-quantitative) finance majors are mathematically illiterate. You think there is math, but the amount of math is minimal, knowing less would be homicidal.

    • rautibo
      rautibo 25 days ago

      @Kakugen of course not. It has a lot of algebra, matrix, statistics... It has the most complicated maths in social sciences.

    • Kakugen
      Kakugen 25 days ago

      rautibo are the maths in economics complicated in the same way it would be in a maths degree

    • rautibo
      rautibo Month ago

      The maths per se are very basic. the problem is the idea that economy can be described or predicted by only equations and assumptions and invented variables.

    • Karim Adnane
      Karim Adnane 2 months ago +1

      That is not what is being argued, math is essential but history should also be taught and not omitted

  • text me weixin
    text me weixin 5 months ago +1

    I want subtitles

  • YawnGod
    YawnGod 5 months ago

    Already, a great first 8 minutes.

  • Longteng Jung
    Longteng Jung 5 months ago

    Regarding Economics, history is the cornerstoned and central 'essence', mathematical and quantitative methods are most likely the vehicles to fully maximise such essence to contribute to the pragmatic aspects and issues at all levels.

  • NeZarStyleOMG
    NeZarStyleOMG 5 months ago

    hey guys.. what about austrian methodology non mathematical non history.

  • Julian Rizk
    Julian Rizk 9 months ago +1

    very powerful opening statement

  • Abdillahi Mire
    Abdillahi Mire 11 months ago

    I study Economics and I'm bad at maths I would'nt know maths are very critical for Economics
    Can any one recommend me how to learn maths?

    • P3rs3rk3r
      P3rs3rk3r 4 months ago

      "Essential mathematics for economic analysis" is a really good beginners book for the math in economics.

  • Rey S.
    Rey S. Year ago +2

    What he’s essentially saying is, we don’t need as many international students to handle US economics. No need to apply if all you know how to do is solve complex equations.

  • Thomas Muller
    Thomas Muller Year ago

    good man

  • Longteng Jung
    Longteng Jung Year ago +1

    Personally, the key is,say, mathematics is still largely theoretical and more noticeably, quantitative with mechanism. Accordingly, such predominant methodology themed in Occidental world might not address a vast majority of concerns related to humanity, including both psychological and cognitive aspects. As increasingly acknowledged nowadays, such mentioned aspects are anyway indispensable in a whole-ranging socio-economic events. Such is the apparent consideration for history--- one of the most core humanity disciplines, to perform a growing function.

  • 'Eternal Optimism...

    Economic Revolution: Economic linear pyramids (Oil,coal,etc) must change from old Rockefeller Standard Oil practices to structures for cyclical Empowerment of Surplus._Cyclical Reciprocal Return vs 1Linear Outward Direction
    (Global IP Gift) t.co/SmPM4EGJrN t.co/ac8PqObu9v

  • Natalia Kaori
    Natalia Kaori Year ago

    Please, anyone could sub it??

    • Natalia Kaori
      Natalia Kaori Year ago

      Ahmod Rony Yes, I'm brazilian and that would help me so much

    • Ahmod Rony
      Ahmod Rony Year ago +1

      Natalia Kaori you mean subtitle?

  • Ramon Rios
    Ramon Rios Year ago

    economics I define as organization capitalism makes economics a cartoon with its color coding introduces the Jungian animuss bull /bear minus the no less 5 bull dogs in bull and bear baiting.the history of these symbols is not a bull vs a bear where a bull would beat a bear if the bull is chained the bear would not go after the bull it was baiting with dogs so a certain market is bear or bull depending which has been beaten by no less than 5 bull dogs also the use of indices as a way of manipulating the physical economy arbitrarily usually not for good the misery index which is unemployment + inflation will equal the misery needed to create the motivation to fix what is causing unemployment of of rising inflation employment can not be easily rigged but unemployment could be conceivably rigged as well inflation which a factor that can be factor in as well as out so it appears to be a trap against the worker for some event yet in the future if there is something of a misery in economics it would be something like buyers spending +buyers confidence would come close buying is good buying with confidence is better where its in the confidence that all hinges on so that's what I believe capitalism plays on those who practice capitalistic would have those buyers buy with total confidence any thing they try to sell to us....us buyers consumers as if they are not consumers themselves I guess the process of elimination results in the best product purchasable but that's a lot of money spent and wasted personally I wouldn't want to earn wasted spent money also terminology is what defines a discipline plant reproduction is not nescessarilly math rigor but the use of math allows thought and ideas to go beyond the word to variable constants then the number so the misery index produces misery no matter which index goes up and once it goes up rarely does it go back down so an economic axiom stated by the little known economist capitalist big worm when you mess with my money you mess with my emotions and my mind

  • Anonymous
    Anonymous Year ago

    30:29 LOOOL

  • David N
    David N Year ago

    exp(y) gets very big. That's all the math you need to know about economics.

  • Rishik Suri
    Rishik Suri Year ago +1

    Beg to differ here. America teaches its undergrads like you want to---and all its economists are statistics and engineering majors. History sure offers you perspective but a strong grounding in Maths enhances both your understanding of Economics and your prospects on the job market.
    The likes of Raj Chetty are revolutionising the field, not charlatans like Niall Ferguson.

  • A one legged man
    A one legged man Year ago

    Though a skilled mathematician, he used mathematics sparingly. He saw that excessive reliance on this instrument might lead us astray in pursuit of intellectual toys, imaginary problems not conforming to the conditions of real life: and further, might distort our sense of proportion by causing us to neglect factors that could not easily be worked up in the mathematical machine.
    Arthur Cecil Pigou ed. (1925). Memorials of Alfred Marshall, New York: Augustus M. Kelley, 1966. p. 84

  • Kilpatrick Kirksimmons

    "Physics envy." So true. Being a huge nerd in the areas of politics and history, the transparently bullshit denial of economics' inherently political and social nature has always irked me. Idk how many times I've read something like "[famous economist]'s ideological disposition might've been awful but I *really* admire their subtle work in econometrics so all and all he was a great economist." Fuck that. The airy and (largely) useless mathematics obsession is fine, just don't pretend it alone gives anyone any insight into the complex construct we call 'the economy.'

  • internet-user
    internet-user 2 years ago +1

    Amazing. Thanks for uploading!!!!!!

  • M White
    M White 2 years ago +3

    now let's do one on philosophy.

  • Rubén Dávila
    Rubén Dávila 2 years ago

    Many things define economy two of them are political decisions and society if one of this change the rest also change

  • Seiji Sakurai
    Seiji Sakurai 2 years ago +37

    "How would studying history compensate for getting money" - how typical of a finance student

    • rautibo
      rautibo Month ago

      @Vibhu Vikramaditya if you want to study Money there is financial only careers, and business careers. but in my opinion these can be substituted by computers.

    • Vibhu Vikramaditya
      Vibhu Vikramaditya 5 months ago +5

      Economics is not about money , thats the stand point any economist realises , Its a mandate towards achieving the epitone of human endeavour through maximum utilisation of its resources

  • Agape Love
    Agape Love 2 years ago +2

    "The awareness of the past should make discipline less arrogant and more useful" Beautifully said!

  • Gabriela Carducci
    Gabriela Carducci 2 years ago

    It's sad not knowing enough english to understand.

  • Edward Dodson
    Edward Dodson 2 years ago

    A final comment. Some years ago I came across an introductory text on economics written (over several editions) in 1955 by Professor Harry Gunnison Brown, at the time teaching at the University of Missouri, I believe. His textbook contains not a single equation.

    • rautibo
      rautibo Month ago +1

      there is only one single equation in Schumpeter's The Theory of Economic Development

  • Davvo Bars
    Davvo Bars 2 years ago +2

    while my own undergraduate experience was a little like the one described, and I was frustrated by the level of maths I soon began to realise my frustration was born out of my expectations of what I thought economics was or should be, compared to the obvious reality of what it IS.
    our use of economics and dependency on it as a sole measurement for policy is imo the issue. our expectation of its power is a problem.
    I feel we have to let economists do economics. let historians do history. sociologists do sociology. psychologists do psychology. it is then with the policy makers to use ALL aspects of social science to draw conclusions. maybe economics is a good "base" or starting point for assumptions, analsysis and implications on policy, but should then evolve through the social sciences for almost like a "validity check".
    only once it passes through this system should it be introduced as "Policy".
    we need to drop the one size fits all mentality, the idea an individual discipline can capture the complete complexities we call life, and work together, rather than argue about who is more "academically sound", we should be more concerned about the effect on reality.

  • Emil Nicolaie Perhinschi

    history is not a science, it is one of the scientific methods

  • Izzy Explains
    Izzy Explains 2 years ago +14

    I may just be a lonely PhD student, but I completely disagree. Just like in physics, we start off with a simplified model, for example point-masses, with such a model fitting the real world to a certain degree. Then we build on top of that model and make a center-of-mass model and so on, loosening assumptions so that the model fits the real world better (sometimes having to start over with a new model or going back a few steps). If we are to go back to having no or even less math, then economics moves further from being a science and ends up just a bunch of antidotes like the rest of the humanities. When physics was started, Greek philosophers spoke of physics like we speak of history, with antidotes of how things happen. They thought if you dropped a ball twice as heavy as another ball it would fall twice as fast (which is wrong). When math was introduced and the subject was made rigorous, it became a science. We need to keep building better models in economics with more math, not go backwards.

    • Mark B
      Mark B 7 months ago

      Too often I find economic theories rest on shaky assumptions. History is a useful reality check that can hint at problems with your assumptions

    • Mark B
      Mark B 7 months ago

      @Jannik Thorsen I guess they meant anecdotes

    • Lloyd Cox
      Lloyd Cox Year ago +1

      You are the exact person he is talking about. Your PhD didn't stop you for falling for that one did it.

    • Phinehas Ikanya
      Phinehas Ikanya Year ago

      its important to understand the inability to represent human behavior in perfect math function. the insatiable nature tend to render many models useless after a short period of time. the composition of economics require use of mathematics in a modest manner supported by a strong theoretical background.

    • Michael Brook
      Michael Brook Year ago


  • Marc Herlands
    Marc Herlands 2 years ago +7

    too little emphasis on the effects of financing the economy. understanding credit is not well presented and thus misleading.

  • That Little Messed Up Girl

    well I'm in 10th grade and next years I have to choose a stream or you can say some subjects soo is it compulsory to take maths if I'm willing to study economics????

  • That Little Messed Up Girl

    well I'm in 10th grade and next years I have to choose a stream or you can say some subjects soo is it compulsory to take maths if I'm willing to study economics????

  • Stayler17
    Stayler17 2 years ago +1

    Let them have a discussion between each other for gods sake. The moderator keeps on stopping them from doing so.

  • New Youtuber
    New Youtuber 2 years ago

    There is obviously a difference between the US trained PhDs and and the UK trained counterparts, as evidenced in this video. This is one of the reasons UK PhDs are not as well respected, especially in academia.

  • Ashfaq Anjum
    Ashfaq Anjum 2 years ago

    can we get the presentation slides of this lecture ???

  • Rodolfo Alejandro Rojas Díaz

    Jajajajajaja The women at the end nailed what the conversation its all about, which its an epistemic problem, I think the nominal topic of the debate, transformed into this false dychotomy of
    Data or Story = Facts. When in reality, History as a science, and not a political instrument its what enables Economy to integratre other social sciences into the analitical frame for emperical research. And its also important to understand History of ideas and the context into which they are built.
    Now bring Kuhn, Popper or Fayebarand into the conversation and the answer of the guy it basically is: "look man, im just an economist". Which its understandable but it doesnt mean its not central to what its being tried to discuss here. Self examination its neccessary to every social science, the nature of contigent causalities its always there Damn even the "natural" sciences, do this because sometimes knowledge its not always accumulative sometimes its sustite facts into beliefs.

    • Jqn
      Jqn 2 years ago +1

      Parece española además

  • mo jama
    mo jama 2 years ago +2

    really economics is hard sceince .
    that is why economists
    make Assumptions!!!

  • sammeo
    sammeo 2 years ago

    thank you so much for the presentation. so refreshing.

  • mcmxli1941
    mcmxli1941 3 years ago +10

    Econ impressives non-economists when its propositions are delivered as formulae. Then they give you money. That's why it succeeds.

  • annoloki
    annoloki 3 years ago +56

    Maths is important for theory, which is useful for figuring out how to make the best of the bad situation you've got, but unfortunately it's also useful as a means of propaganda for explaining why problems we face are technical, ignoring the majority of consequential wealth transfer which does not take place in an economy, but rather through use of deception and force... eg, using economics to explain the 07-08 crash will mislead as systemic fraud isn't an economics issue, it's a problem of corruption and lack of law enforcement. Physics works because the universe enforces its laws and doesn't accept bribes to create loopholes or look the other way. When 90% of mortgages are fraudulent, 90% of the data regarding them is corrupt, there's no longer any point plugging that data into a model.

  • avro549B
    avro549B 3 years ago +31

    Medicine and engineering wouldn't have made much progress without studying corpses and crashes. Economics needs to do the same.

    • Agape Love
      Agape Love 2 years ago

      avor I agree.

    • Vesivian
      Vesivian 2 years ago +3

      useless comment

    • JK9610
      JK9610 2 years ago

      I think we are accumulating quite a bit of crash data. We'll probably have to see for another 20 years. In the end, we probably don't want crashes.

  • Jerry Rhee
    Jerry Rhee 3 years ago

    "The courage to engage the whole breadth of reason, and not the denial of its grandeur - this is the programme with which a theology grounded in Biblical faith enters into the debates of our time...It is to this great logos, to this breadth of reason, that we invite our partners in the dialogue of cultures.
    To rediscover it constantly is the great task of the university." ~ Benedict XVI

  • macraek1
    macraek1 3 years ago +2

    I can't take Prof. Francesco Caselli seriously because he reminds me of Hank Azaria in The Birdcage. Sorry!!

    • gr8 b8
      gr8 b8 2 years ago

      reminiscent of Hank Azaria period

  • Warren Ross
    Warren Ross 3 years ago

    Fell in love with the vision. Typical Krugam apologetics. The GFC was control fraud. See Bill Black.

  • Jacob Shemka
    Jacob Shemka 3 years ago +8

    I think mathematical modeling is important, but we need history to as this guy said to get a reality check in the models themselves.

  • Nex Tyrannis
    Nex Tyrannis 3 years ago +44

    4:35 "The role of history is that of a reality check." Exactly! Over the years, I've become increasingly disenchanted with theory. I'm sick of hearing what SHOULD be, or what WOULD be if only, . . . I want to know whether socio-political theories like socialism, or economic theories like Keynesianism or Classical Economics, or even the predictions of the Austrian school, actually work as claimed.

    • Ramon Rios
      Ramon Rios Year ago

      the pet rock perfect example of the creation of demand for a given supply now if peace sells any demand also a rare disease creates a demand for a specialty drug for only a handful hoping for more victims and more demand this is where economics is being misused in that healthcare costs are not in administrated costs but in research in otherwords of flesh and bone oh yea lots of blood a small if not deadend demand that has been suppied even against political stance death metal should have died by now it yet lives still will never be a money maker like rap and country pop but suppies a very small demand because death is certain life is not oh yea taxes too

    • Vincent Fink
      Vincent Fink 3 years ago +5

      Pretty sure the Austrians are doing well for some time now.

  • Piotr Walków
    Piotr Walków 3 years ago

    I wish there should be subtitles added by default.

  • sn3192
    sn3192 3 years ago +11

    i can't help but feel that the against-team fundamentally misunderstands the criticism of the for-team. it seemed like it isn't that economists don't incorporate data into their thinking, but that they don't make a conscious effort to look at or discuss facts within different different ways of thinking/mentalities/paradigms, i.e. discuss those mentalities themselves, which make all the difference as to what the facts will be taken to mean and what will be done with them, regardless of how much empircal research there de-facto is in economics.

  • VisualiseTheFun
    VisualiseTheFun 3 years ago +2

    The crowd just laughs and claps at everything - fucking jack-offs.

  • Damien Mearns
    Damien Mearns 3 years ago +1

    Maths ? History ? ... If you want to moan about something missing how about Accountancy ! They have to at least get this right.
    It is an easy assumption that the Financial numbers are an accurate reflection of
    reality - and they are not.
    Basic Accountancy will show this :

    • Jon theGreat
      Jon theGreat 3 years ago

      Exactly! This assumption is critical to the opposition side. That's why they always refer to "data" as opposed to experience from history.

  • Edward Dodson
    Edward Dodson 3 years ago +45

    The first presenter (Professor Skidensky?) has described very clearly my own experience as a student and subsequently as a teacher. Decades ago when I began my work on a master's degree I initially chose economics but soon became very disillusioned by the reliance on mathematics and the absence of investigation into historical experience and societal norms. Nor was there any serious investigation into the validity of propositions put forward as economic theory. At once time in class I engaged my economics professor in a long exchange over the impact of land hoarding and land speculation in the U.S. economy. After about twenty minutes he simply ended our exchanged exasperated because he could not counter the observations made by evidence offered by real world observations.
    Fortunately, my university offered an interdisciplinary alternative, a Master of Liberal Arts degree and I switched programs.
    My course of study permitted me to read and study the great political economists, who were all historians and all moral philosophers. They examined markets, market forces, and government as a primary externality, and they reached moral judgments based on the principles of justice they embraced. Along the way, I was introduced to the writings of the great French school of political economists, the Physiocrats, and to the American Henry George. George's theory of the business cycle, based on the classical three factor model of how economies and societies function, provided to be quite useful in my later work as a market analyst in the real estate sector.
    When I retired from my professional work in the mid-2000s I gave some thought to entering a doctorate program in order to acquire the credentials for college instruction. The very low probablility of ever securing a full-time teaching position pushed me in a different direction. Instead, I developed two courses to teach to senior adults in a non-credit environment. One is titled "Understanding our Political Economy." The other is "The History of Economic Thought." Although I do introduce basic economic concepts, such as factor of production and wealth distribution in these two courses, my students are not required to know or use mathematics in order to understand such concepts. I found an introductory economics textbook written by Professor Harry Gunnison Brown used to teach basic economics without even one equation in the book. Each course is two semesters in length is discussion oriented. My view is that the more I am required to lecture, the less the students are learning.
    I am more than happy to share this course material with any teacher who is attracted to the interdisciplinary approach offered by the study of political economy and by reliance on the classical three factor model of wealth production and distribution. I can be reached by email at edod08034@comcast.net.

    • rautibo
      rautibo Month ago

      There is a Spanish economic historian who is still alive called Lluís Barbé, most famous about writing a book-bio about Edgeworth, that published "El curso de la economia" (The course of economics) which is a great manual about economics history of tought that overthrowns Ekelund's "A history of economic theory and method". Maybe I'll translate it to english someday cause it is worth the read, it does the oposite of what we are tought in every economics manual which is presenting the concepts of the authors without giving actual historical reference

    • Edward Dodson
      Edward Dodson 2 years ago +2

      The history of how economics was created as a distinct discipline from the broader scope of political economy provides many of the answers. In the late 19th century, European leaders were building imperial empires and subjugating people to their colonial rule. The reasons have never changed: acquiring new territory to take "surplus" population, gain control of needed natural resources, and establish a closed system of economic exchange. Governments needed information regarding their domestic resources, labor skills and infrastructure. They also needed to know where to find the resources elsewhere. Economics became the new discipline for gathering, analyzing and reporting this information in a "value free" manner that made no moral judgment about how wealth was acquired, how it was produced (e.g., on the harm to the environment) and how it was distributed back to landed interests, to labor, to owners of capital goods, or to government.

    • Shanty N
      Shanty N 2 years ago +2

      Hi Ed, I once an econ student at a university in Indonesia and indeed had the same problems. Most of my lecturers relied on heavy mathematical approach so that economics lost its meaning. I have been criticising about the way the subject taught and I emphasised on the lack of institutional approach, in which all the mathematical models applied in real life. But many thought that I was some sort of crazy person to say that as they thought that institutions were not quantifiable. I guess it's a major problem for econ students across the world. No wonder many of policy makers excessively obsessed with numbers, such as economic growth.

    • Edward Dodson
      Edward Dodson 3 years ago +2

      Although I do have a Facebook page, I do not view it on a regular basis. If you are patient, you reach me via email: edod08034@comcast.net. There are several economists I work with and admire a great deal because they have had the courage to challenge conventional economic theory, whether orthodox neoclassical, Marxian, Austrian, Monetarist or any other that fails to describe what occurs in the real world. I recommend you include in your reading the writings of: Mason Gaffney, Nicolaus Tideman, Fred Foldvary, Kris Feder, Mary Cleveland, Michael Hudson and William Peirce. Many of their articles can be found in the online library of the School of Cooperative Individualism (www.cooperative-individualism.org)Best wishes for success in your studies. Just remember that the macroeconomics being taught in colleges and universities is not an objective presentation of reality based on the scientific method. Mason Gaffney explains what happened to economics in the 1994 book, "The Corruption of Economics," co-authored by the British economist Fred Harrison.

    • beja hadid
      beja hadid 3 years ago

      +Edward Dodson hi, I'm majoring in economics and i sometimes come up with questions regarding the subject. can i follow you on Facebook so that i can easily approach you if i need answers? thanks. my name is zaher beja sanaba on Facebook.

  • Carbonic Oyster
    Carbonic Oyster 3 years ago +24

    That first question about interest rates was typical of a modern economics student. Cringe-worthy

    • Dan Sullivan
      Dan Sullivan Year ago +3

      And knowing history would tell you about the movements against lending money into circulation in the first place. The Greenbackers and the Chicago school during the 1930s advocated having government issue all money and having banks only lend from term deposits. Even the ancient Roman Republic spent fiat currency into circulation for domestic spending (the nomisma) and used the silver dinar mostly for foreign trade. Yet our knowledge of monetary history is so sketchy that we often have superficial notions that are far from the truth.

  • Dean
    Dean 3 years ago +19

    so interesting.. I never thought about math playing such a fundamental role. While math is perfect, harmonious and beautiful, the reality of the market supply and demand is not. I like to mark this for later viewing, but the "watch later" is missing.

  • BeGunNer
    BeGunNer 4 years ago +6

    So what was the rough split of the vote at the end?

    • LSESU Economics Society
      LSESU Economics Society  4 years ago +13

      +BeGunNer Hi, the votes were not counted but the split was roughly 60-40 in favour of the motion.