My blog is on business law but I do think business law relates to the topic of the cover, who needs economics. I hold a PhD in economics and a law degree. One reader comments on the physics envy of economics, which touches on the problem.

Here are few questions on who needs economics:

Why do great advances in the hard sciences come from around the world, and even from minor universities, but all contributions to economics come from a handful of select schools?

Why do economics models come and go at a whim? For example, a Nobel was given for input-output analysis. Why isn’t input-output analysis in a principles textbook? In contrast, why are Newton's laws still relevant (albeit in a circumscribed space).

Go to the library, pick up 10 economic journals at random and pick up 10 biology journals at random. Compare the level of mathematical modeling. Is human behavior, which involves conscious agency, inherently more mathematical in structure than the behavior of cells?

Does anyone use economics in their jobs? Any of those economic graphs pounded into students? Every economist friend of mine who took a job said they didn’t use anything they learned in economics, even when they were hired as economists.

Engineering majors, business majors, lawyers, computer scientists, rise to the top of for profit corporations. Engineers also perform a lot of mathematical modeling. People with graduate degrees in economics generally do not rise to the top of for profit corporations. Why not?

I read article by an economist from the Santa Fe Institute where the author declined to incorporate behavioral economics results because he wouldn’t get parsimonious models. So is the point the model, rather than understanding?

Hasn’t Wolfram shown that most phenomena are computationally irreducible? Does this have implications for economics as a methodology?

Large classes of phenomena, as Kaufmann of the Santa Fe Institute as pointed out, are essentially lawless. Does this have implications for economics as a methodology?

Where would economics be if business majors were not forced to take it?

Why is the free market demand for economics so low? Go into Barnes & Noble and see how few economics books are there, even though millions of people have taken principles of economics as a required course for business and political science.

Why don’t economists conduct interviews?

My real question: is economics even a subject? or is it a (relatively narrow) methodology for social research? (mathematical modeling + econometric analysis of data sets)


Law (and the study of business as well) in contrast is a higher level of social research. Yes, research. Why? A few observations.

Law is methodologically open to all forms of evidence and methods, including econometrics and mathematical  modeling. It does not take a cookie cutter approach to every issue set before it.

Law engages in satisficing rather than optimizing. (It is easy to show that in the presence of multiple objectives and multiple constraints, Knightian uncertainty, etc., satisficing is the general case.)

Law takes facts seriously. Law, like physics, likes inconvenient facts, and does not flee them as economists are taught to do from child birth. Facts are deemed material or immaterial based on their importance to the problem, not based on their inconvenience for a model. A minimum requirement of science one would think.

Law is unconsciously grounded in Zadeh's law: apply simply rules to complex facts.

Law grows out of the collective wisdom of the common law, rather than a few isolated individuals with the hubris to think they can anticipate every eventuality if only given the right equation.

Law makes "unknown unknowns" central to its reasoning and prescriptions.

Law unconsciously uses fuzzy logic, to great effect. To take  a simple example. Income is basically undefined in the tax code. Why? Because we can't anticipate all the different ways people can have income. So income is defined with specifics under a fuzzy definition.

Law does not need rational players to conduct an analyis.

Law is more consistent with the contemporary results of complexity theory. Kaufman also cited the common law in admiration.