I was a typical, average kid. For the first year of my life, my family lived in a 15 foot by 15 foot cabin, without indoor plumbing, teetering on the bank of a creek that wound through pasture land. My grandfather, a second generation Swiss-Italian dairyman, owned the land; he, in his eight bedroom farmhouse, was our nearest neighbor. Soon after the birth of my brother, in my fourth year, the fighting began and my parents were divorced by the time I was seven. My father went on to finish school, to obtain his CPA license and to get a job in San Francisco at a Big Eight firm. “On” he likes to say, “the nineteenth story of Embarcadero 3… near the top!” As is typical, my mother was not as successful in the aftermath of the divorce. However, she heroically held down clerical jobs and kept our bellies full and a roof over our head. As such, during the school year, my brother and I lived in my mother’s single-wide trailer and when school got out for the summer, we lived in my father’s condo in posh Marine County. The contrast is striking only now. Then, it was all very normal. I guess if you average the extremes, the privilege would cancel the moments of slight degradation and mine was a typical experience growing up.
I’m sure that you’ve heard that the field of Economics is a perfect mix of science and the humanities. Sometimes I wonder if this is really just a marriage of convenience. I imagine psychologists, anthropologists and political scientists one day realizing that they are good at math and thus becoming economists. The study of decision making becomes game theory, prospect theory or intertemporal choice. Psychology becomes behavioral finance. Political philosophy becomes public choice theory and so on. These developments are not bad, of course, but sometimes economists are gratuitous in their use of math, as Deirdre McCloskey points out in The Secret Sins of Economics. She laments that economic theories where the assumptions of the theory, the axioms, are not grounded in reality, amount to mind games and parlor tricks. “[Such] pure thinking is unbounded.” Sure y follows from x, but are you justified in believing x describes the real world?
I was late in discovering math as a method to discover truths about the world, so I am deeply concerned about how it can be used in economics to best effect. For me, economics matches my intense interest in understanding human behavior with my inborn tendency toward abstractions and admiration for objective truth. Truth has always been about science for me and I’ve learned science via popularizers such as Carl Sagan, E. O. Wilson and Brian Greene. These authors relied on storytelling and engaging prose, versus mathematical proof, to be their tools of persuasion. As such, prose was the only tool I knew to explore truth. Now that math has been added to my truth-seeking toolbox, the next step is for me to learn how to use this tool.
Contradictions, variances, anomalies, exceptions to rules, but always, some how, there is convergence to the mean. This not only describes my life, it describes the subjects of economics and the subject of economics itself. For example, taking the mean, understanding typical behavior, is a model of that behavior. Famously, the average person does not exist (who among us has12.7 years of education, 1.8 children and is 12.7% black). More advanced math is used to give us more sophisticated models of human behavior, but by our very nature we elude such models, as well. Still, it is in the making of the model AND in understanding why the model fails in reality that knowledge is created. At the root of this creation of knowledge in economics will be a discovery of my self. I guess I am a self-centered economist… how typical!