The problem psychology faces is that humans are evolved to be so damn good at it. In fact, we probably have a more extensive and predictive psychological theory than we do an economic one.
We ascribe people a variety of theoretical constructs such as beliefs, attitudes, temporary emotional states like anger, sadness etc and dispositions. These theoretical constructs are incredibly powerful at predicting behavior. We can use the idea of beliefs to predict where an item is hidden based on what they've seen. We are able to pretty informatively guess how recent information (finding out about the death of a loved one or winning the lotto) will affect deciscions. We can even apply the theory to solve inverse problems and infer what kind of news someone must have received based on how they are acting. That's hard for most theories.
The problem is that any result that would improve our ability to predict the outcome of important choices substantially -- much less a general theory -- would offer substantial evolutionary advantage to the holder.
In short, psychology really can't hope to find any theory that's simple, significant and non-obvious. It might find theories that don't help much with individual choices (theories about crowd dynamics or group size or whatever) or only offer kinda unimportant insights (people pick the option on the right when they are identical) but it's fighting evolution to do more.
Evolutionary psychology is a theory of psychology that has a very good and progressively developing track record. I agree with you - much of what came before was disjointed, and didn’t replicate. Evolutionary psychology and behavioral genetics however are grounded in hard biological science, although we aren’t yet seeing much practical application in the clinical setting yet.
The dismal science it is not. I only minored in Econ and did a poli sci major and later law school. I find without the Econ work I did, my thought process and way of looking at problems would be far too meandering and discursive
This is a pretty sloppy error for anyone familiar. They will use it to go "oh, he doesn't even understand what he's criticizing if he confuses these things."
The problem is that while not debuked it's not defined in any way that's simultaneously non-obvious and meaningful.
I mean sure, the claim that it's easier to rember/consider options that have been made salient is true but obvious. Yes, if you have someone read an article about death they are going to increase the relative rate they fill in g_ _ _ e with grave than grace. But that's just what our folk psychology would predict.
OTOH when you try to go further and make the claim non-obvious you don't get much that's both precise, testable and non-obvious.
I think you're mostly talking about social psychology here rather than the many other fields of psychology that I think have much better track records. In a clinical setting, I think CBT has broadly been very successful, and l think lots of cognitive psychological results seem both robust and theory driven.
This reads like a fish being unable to sense the water in which it swims. Microeconomics is useful because traders have persuaded rulers to set up institutions that allow it to be useful.
How useful is standard microeconomics in explaining potlatches, or hunter-gatherer societies or the Qin empire or the Armenian massacre?
This is a misreading of the history of economics and a misunderstanding of science IMO. The main problem with economics is the fantasy that it is just like physics, where there are discoverable, pithy equations that form the foundation of everything. In psychology or economics, any undergrad math or stats major can make up a handful of equations that theoretically shows anything they might want. The left thing we need is a generation of psychologists making up mathy (as in truthy) BS pretending they're doing valuable modeling of human psychology.
> Our work on how to optimize an auction requires no experimental proof whatsoever – it stands on its own. So too does much of microeconomic theory.
The only models that stand on their own are the models of pure mathematics. Physics doesn’t even stand on its own, physicists and engineers look for empirical evidence of their theories and designs.
And economics is far away from a science, lacking predictive or explanatory power.
I can read it as I have a mathematical degree but unless it’s verified by actual empirical results it’s useless. It may well be mathematically useless anyway, I’ve seen that in economics papers before. However even if the bestest and brightest minds of economics have worked out optimal auctions I’m not sure that exonerates economics in general, since macro economics is clearly a clown show.
Wasn’t there a period post 2008 when, having not predicted another recession, some humility entered the profession?
I must agree with you here, and it is basically this point that has turned me away from fixating all my energies upon Austrian economics. If all you have is theory, even mathematically fortified theory, it still may say diddly squat about what happens in the real world because some of the concepts may be insufficiently well-defined or the axioms not compliant with reality. Even so, there's the *very hard* problem of proving that you've encompassed all possible mechanisms/structures in your analysis, which is referred to as a classification problem in math.
I come from a math and physics background, so I'll give an example of a classification problem. In linear algebra, you can prove that finite dimensional vector spaces over a given field are completely determined up to isomorphism by their dimension. This seems easy enough, but you don't realize how easy you have it until you consider the matter of modules over a given ring, even if the ring is an integral domain! For context, integral domains would be rings if they only had the extra axiom guaranteeing multiplicative inverses. At least in the case of the ring being a Principal Ideal Domain (PID), you can classify the finitely generated modules over them up to decomposition into cyclic modules (or primary decomposition), but this is a far cry away from having a comprehensive invariant given by dimension alone. Or to give a physics example, that the orbitals for a Hydrogen atom take specifically those shapes and that no others are possible is a result arrived at after a painstaking process of modeling the atom and its attendant forces, plugging in the appropriate expressions to the equations at issue (primarily Schrodinger), and then trying a whole bunch of methods/techniques to find a closed form solution. Even then, if that didn't match up with empirical reality, that would tell us that perhaps the Schrodinger equation was wrong, or our model of the atom, or both. Luckily these seem to hold up, at least within the kinds of energy/scale regimes that we've measured it at.
But to take an example of something which is backed by robust and rigorous theory but fails to match reality, you've got string theory. Even dark matter seems to be mostly discredited at this point, and it was itself hypothesized as a reason why some astronomical phenomenon didn't seem to match up with predictions made by general relativity. Basically, even when you have everything mathematically well-defined, theory is never sufficient on its own unless you want to stay within the math world. Empirics provide support that the theory says something meaningful about the reality we find ourselves in. To OP, just remember that the assumptions upon which neo-classical economics rests do not perfectly conform to human nature and reality, so you are at best working with decent approximations.
Thank you for writing this interesting & thoughtful piece.
I’m sympathetic to this argument, and yet I feel this post may be over-stating its case. For example, economics is increasingly empirical and a-theoretical, and even in theory, things are pretty eclectic. What’s exactly the baseline economic prediction — do you allow for hyperbolic discounting, or diagnostic expectations, or some non-standard type of equilibrium?
That said, in a more modest version, I’m a strong believer that having precise, quantitative mathematical models is extremely useful, for various reasons.
If there aren't any theories of economics with genuine predictive power, then the advantage of economics over psychology is merely that it's more up-front about how useless it is. The fact that no one theory of economics has beat out all of the others, or been implemented to create significant economic advantages for parties in the know, suggests to me that economics is as useless as any application of "scientific rigor" to the study of human behavior.
Peter Gerdes has a really good point about folk psychology being quite effective. I mean, look at Donald Trump; he used celebrity to become President despite no prior public service record, but do you think he's ever cracked a psychology book?
I'd say another problem is that psychology actually has *lots* of theories, they're just not empirically validated and therefore often wrong. You're probably familiar with all the critical theory-based stuff floating around university, but before that there was psychoanalysis. Big theory of everything, had interesting explanations for all kinds of things, brought sex into it, much less useful for helping people than the CBT they pinched from the Stoics. You can find traces of it in old Woody Allen movies, though having been memory-holed you might not have heard of him. Jung's theories about the collective unconscious are a little more fun, but not very empirically validated either, though the MBTI works OK as a dichotomized five-factor test minus neuroticism.
Before psychoanalysis, you had all kinds of religious ideas around sin and virtue. They're not principally psychological theories, being more in the realm of ethics, but you had lots of people flogging themselves (metaphorically or literally) because they thought about sleeping with their neighbor's wife. (Now they cut out the middleman and have the neighbor's wife do it and call it polyamory and kink, but I digress.)
Before modern religion, the ancients had astrology. As you're probably aware, astrology makes predictions about human psychology based on the positions of the stars and planets in the sky at people's birth, and is a fairly complicated system that spurred the development of much of basic mathematics. It also happens to have no empirical validity whatsoever as far as we can tell.
Psychology is largely pre-paradigmatic, and it is because it is much harder to understand the complex causal pathways. It is not for lack of trying, just there are no theories that stand up. I think that the epistemic difficulties you enumerate for psychology are something that may be more significant in degree than the empirical aspects of economics, but ultimately affect all scientific inquiry. There is no such thing as unbiased published research reflective of reality. Facts are theory laden, systems and models have degrees of arbitrariness and reduction, theories are interpretations.
I agree. Economics is generally better than psychology, and I’m saying this as a psychologist. The theory psychology needs is evolution, because we are products of evolution, and the best psychology makes the best use of evolutionary theory, imo.
The problem psychology faces is that humans are evolved to be so damn good at it. In fact, we probably have a more extensive and predictive psychological theory than we do an economic one.
We ascribe people a variety of theoretical constructs such as beliefs, attitudes, temporary emotional states like anger, sadness etc and dispositions. These theoretical constructs are incredibly powerful at predicting behavior. We can use the idea of beliefs to predict where an item is hidden based on what they've seen. We are able to pretty informatively guess how recent information (finding out about the death of a loved one or winning the lotto) will affect deciscions. We can even apply the theory to solve inverse problems and infer what kind of news someone must have received based on how they are acting. That's hard for most theories.
The problem is that any result that would improve our ability to predict the outcome of important choices substantially -- much less a general theory -- would offer substantial evolutionary advantage to the holder.
In short, psychology really can't hope to find any theory that's simple, significant and non-obvious. It might find theories that don't help much with individual choices (theories about crowd dynamics or group size or whatever) or only offer kinda unimportant insights (people pick the option on the right when they are identical) but it's fighting evolution to do more.
Interesting argument
Evolutionary psychology is a theory of psychology that has a very good and progressively developing track record. I agree with you - much of what came before was disjointed, and didn’t replicate. Evolutionary psychology and behavioral genetics however are grounded in hard biological science, although we aren’t yet seeing much practical application in the clinical setting yet.
The dismal science it is not. I only minored in Econ and did a poli sci major and later law school. I find without the Econ work I did, my thought process and way of looking at problems would be far too meandering and discursive
> Priming, since debunked,
"Priming" is not debunked.
"Behavioral priming" is debunked.
This is a pretty sloppy error for anyone familiar. They will use it to go "oh, he doesn't even understand what he's criticizing if he confuses these things."
The problem is that while not debuked it's not defined in any way that's simultaneously non-obvious and meaningful.
I mean sure, the claim that it's easier to rember/consider options that have been made salient is true but obvious. Yes, if you have someone read an article about death they are going to increase the relative rate they fill in g_ _ _ e with grave than grace. But that's just what our folk psychology would predict.
OTOH when you try to go further and make the claim non-obvious you don't get much that's both precise, testable and non-obvious.
I think you're mostly talking about social psychology here rather than the many other fields of psychology that I think have much better track records. In a clinical setting, I think CBT has broadly been very successful, and l think lots of cognitive psychological results seem both robust and theory driven.
This reads like a fish being unable to sense the water in which it swims. Microeconomics is useful because traders have persuaded rulers to set up institutions that allow it to be useful.
How useful is standard microeconomics in explaining potlatches, or hunter-gatherer societies or the Qin empire or the Armenian massacre?
This is a misreading of the history of economics and a misunderstanding of science IMO. The main problem with economics is the fantasy that it is just like physics, where there are discoverable, pithy equations that form the foundation of everything. In psychology or economics, any undergrad math or stats major can make up a handful of equations that theoretically shows anything they might want. The left thing we need is a generation of psychologists making up mathy (as in truthy) BS pretending they're doing valuable modeling of human psychology.
*last thing we need
> Our work on how to optimize an auction requires no experimental proof whatsoever – it stands on its own. So too does much of microeconomic theory.
The only models that stand on their own are the models of pure mathematics. Physics doesn’t even stand on its own, physicists and engineers look for empirical evidence of their theories and designs.
And economics is far away from a science, lacking predictive or explanatory power.
https://www.eecs.harvard.edu/cs286r/courses/spring07/papers/myerson.pdf Yeah no, read this and get back to me. If you know the parameters, this is how you do it. There is no better way.
I can read it as I have a mathematical degree but unless it’s verified by actual empirical results it’s useless. It may well be mathematically useless anyway, I’ve seen that in economics papers before. However even if the bestest and brightest minds of economics have worked out optimal auctions I’m not sure that exonerates economics in general, since macro economics is clearly a clown show.
Wasn’t there a period post 2008 when, having not predicted another recession, some humility entered the profession?
I must agree with you here, and it is basically this point that has turned me away from fixating all my energies upon Austrian economics. If all you have is theory, even mathematically fortified theory, it still may say diddly squat about what happens in the real world because some of the concepts may be insufficiently well-defined or the axioms not compliant with reality. Even so, there's the *very hard* problem of proving that you've encompassed all possible mechanisms/structures in your analysis, which is referred to as a classification problem in math.
I come from a math and physics background, so I'll give an example of a classification problem. In linear algebra, you can prove that finite dimensional vector spaces over a given field are completely determined up to isomorphism by their dimension. This seems easy enough, but you don't realize how easy you have it until you consider the matter of modules over a given ring, even if the ring is an integral domain! For context, integral domains would be rings if they only had the extra axiom guaranteeing multiplicative inverses. At least in the case of the ring being a Principal Ideal Domain (PID), you can classify the finitely generated modules over them up to decomposition into cyclic modules (or primary decomposition), but this is a far cry away from having a comprehensive invariant given by dimension alone. Or to give a physics example, that the orbitals for a Hydrogen atom take specifically those shapes and that no others are possible is a result arrived at after a painstaking process of modeling the atom and its attendant forces, plugging in the appropriate expressions to the equations at issue (primarily Schrodinger), and then trying a whole bunch of methods/techniques to find a closed form solution. Even then, if that didn't match up with empirical reality, that would tell us that perhaps the Schrodinger equation was wrong, or our model of the atom, or both. Luckily these seem to hold up, at least within the kinds of energy/scale regimes that we've measured it at.
But to take an example of something which is backed by robust and rigorous theory but fails to match reality, you've got string theory. Even dark matter seems to be mostly discredited at this point, and it was itself hypothesized as a reason why some astronomical phenomenon didn't seem to match up with predictions made by general relativity. Basically, even when you have everything mathematically well-defined, theory is never sufficient on its own unless you want to stay within the math world. Empirics provide support that the theory says something meaningful about the reality we find ourselves in. To OP, just remember that the assumptions upon which neo-classical economics rests do not perfectly conform to human nature and reality, so you are at best working with decent approximations.
Thank you for writing this interesting & thoughtful piece.
I’m sympathetic to this argument, and yet I feel this post may be over-stating its case. For example, economics is increasingly empirical and a-theoretical, and even in theory, things are pretty eclectic. What’s exactly the baseline economic prediction — do you allow for hyperbolic discounting, or diagnostic expectations, or some non-standard type of equilibrium?
That said, in a more modest version, I’m a strong believer that having precise, quantitative mathematical models is extremely useful, for various reasons.
Evolutionary psychology.
If there aren't any theories of economics with genuine predictive power, then the advantage of economics over psychology is merely that it's more up-front about how useless it is. The fact that no one theory of economics has beat out all of the others, or been implemented to create significant economic advantages for parties in the know, suggests to me that economics is as useless as any application of "scientific rigor" to the study of human behavior.
Oh, dear. He doesn’t know, does he.
Peter Gerdes has a really good point about folk psychology being quite effective. I mean, look at Donald Trump; he used celebrity to become President despite no prior public service record, but do you think he's ever cracked a psychology book?
I'd say another problem is that psychology actually has *lots* of theories, they're just not empirically validated and therefore often wrong. You're probably familiar with all the critical theory-based stuff floating around university, but before that there was psychoanalysis. Big theory of everything, had interesting explanations for all kinds of things, brought sex into it, much less useful for helping people than the CBT they pinched from the Stoics. You can find traces of it in old Woody Allen movies, though having been memory-holed you might not have heard of him. Jung's theories about the collective unconscious are a little more fun, but not very empirically validated either, though the MBTI works OK as a dichotomized five-factor test minus neuroticism.
Before psychoanalysis, you had all kinds of religious ideas around sin and virtue. They're not principally psychological theories, being more in the realm of ethics, but you had lots of people flogging themselves (metaphorically or literally) because they thought about sleeping with their neighbor's wife. (Now they cut out the middleman and have the neighbor's wife do it and call it polyamory and kink, but I digress.)
Before modern religion, the ancients had astrology. As you're probably aware, astrology makes predictions about human psychology based on the positions of the stars and planets in the sky at people's birth, and is a fairly complicated system that spurred the development of much of basic mathematics. It also happens to have no empirical validity whatsoever as far as we can tell.
How do you feel about evolutionary psychology?
Also: If economics is so cut and dried, why do so many prominent economists disagree with each other about seemingly basic things?
It is not that economists agree with each other; it is that they *can* disagree.
Even we can do that. ;)
Psychology is largely pre-paradigmatic, and it is because it is much harder to understand the complex causal pathways. It is not for lack of trying, just there are no theories that stand up. I think that the epistemic difficulties you enumerate for psychology are something that may be more significant in degree than the empirical aspects of economics, but ultimately affect all scientific inquiry. There is no such thing as unbiased published research reflective of reality. Facts are theory laden, systems and models have degrees of arbitrariness and reduction, theories are interpretations.
I agree. Economics is generally better than psychology, and I’m saying this as a psychologist. The theory psychology needs is evolution, because we are products of evolution, and the best psychology makes the best use of evolutionary theory, imo.
The name had me come instantly.