To most people, the predictions of economists can be spoken of in the same breath as astrology or tarot readings. But, what is going on behind the scenes that leads to such flawed thinking? To a rarified and powerful section of economists, mathematical market models have been used to explain all behavioural characteristics and find higher-level truths that capture the essential elements of human life. However, Matthew Watson argues, this treats abstract mathematical proof as empirical fact. Instead, we need to embrace a variety of methods in the social sciences and dethrone the abstract mathematical modellers if we are to find a better approach to the economy. This work is based upon his ESRC Professorial Fellowship project ‘Rethinking the Market’.

In his General Theory of 1936, John Maynard Keynes reflected on the power of the “ideas of economists” and famously concluded that the “world is ruled by little else”.  He complained that decision makers in all walks of life were “distilling their frenzy from some academic scribbler of a few years back”.  The ideas of economists are no less important today.  But in the place of Keynes’s scribblers we now have hypothetical mathematical modellers.  Wherever we turn, there seems to be a mathematical market model to guide us through our lives, everything from how we should balance work with leisure to who it would be a good idea to fall in love with.  If we cast our minds further afield to how our societies are governed, again there will always be a mathematical market model on hand to tell us what we need to know, in the fields of politics, law and culture every bit as much as about the economy.  The phenomenon of economics imperialism is evident whenever a mathematical market model is used to present an opinion on a social issue which, at heart, is neither a mathematical nor a market problem.  In this way, economics seeks new intellectual terrain to colonise, hoping to render other social sciences subordinate to its way of thinking.

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They have ridden on the coat tails of the abstract proofers, seeking to establish epistemic hierarchies in which they can claim to have arrived at higher-level truths that are unavailable to other social scientists, simply because they exhibit a mathematical frame of mind.

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However, this is not what the pioneers of mathematical economics had in mind.  When this mode of thinking came to prominence in the mid-twentieth century, its most important examples were exercises in proof-making, taking the most general case imaginable and working through it in a purely formal manner.  The resulting mathematical artefacts were forbidding in the extreme and demanded a level of technical skill that only a handful possessed.  They were entirely unreadable to the vast majority of economists, who had to make do instead with creating much simpler mathematical market models.  Today, the techniques involved in this latter endeavour often remain daunting for other social scientists, but there the similarities end.  The highly sophisticated proof-makers were always clear that they were engaged in overt thought experiments, imagining onto the page a state of affairs that conformed to no known world.  Economics imperialists, by contrast, insist that they are engaged in causal explanation, revealing to us the contours of the actual social world we inhabit.  They have ridden on the coat tails of the abstract proofers, seeking to establish epistemic hierarchies in which they can claim to have arrived at higher-level truths that are unavailable to other social scientists, simply because they exhibit a mathematical frame of mind.