Skip to main content

View Diary: WHY WE’RE SCREWED (232 comments)

Comment Preferences

  •  Well truth is not always objective in the social (0+ / 0-)

    sciences. There is a big difference between reading a thermometer and reading a statistical survey of human activity. And even physics has an understanding that not everything is observable. The best model we have in physics is blindingly complex and uncertain.

    There are a number of ways to study economics. One of them, a relatively new field, is to study the behavior of what people actually do. This is referred to as behavioral economics. It studies people's economic behavior with the understanding the people do not always make rational decisions.

    Market economics on the other hand studies market behavior. And assumes that humans make rational economic decisions. This describes most economists. And most economists work for banks, investment houses, government, think tanks, etc. They are not involved in academic research.

    Most social scientists work from a theoretical alignment that matches what they believe about the world. If you are interested in academia you have one perspective. If you are interested in making money you have another perspective.

    Many mathematically talented engineering, economics, and physics graduates in the eighties until quite recently went to work for investment houses and hedge funds. They were interested in making some money. And for a while it worked. But they were in great part responsible for the collapse of the financial market. Look up Black Scholes and LTCM fro a good example of what theories can do tp a market place.

    The first thing you learn in Anthropology 101 is that you have prejudices, you will never completely lose them, and you have to constantly question your prejudice as you do research. The same lessons are taught in most sociology and social psychology courses. It is called observer bias and can taint your results, Economics has the same problems but is often less inclined to recognize them.

Subscribe or Donate to support Daily Kos.

Click here for the mobile view of the site