Economics and the mid-life crisis have much in common: Both dwell on foregone opportunities

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. . . . . . . . . . .Richard Posner should be awarded the next Nobel Prize in Economics . . . . . . . . . . . .

Thursday, November 03, 2005

Everyone Has a Theory

Have you ever met people who don't like theory? People who say things like, "That's okay in theory, but..." in a sneering tone of voice?

In most cases, people think they have an idea about how things work, whether they admit it or not. There are some theoretical models underlying their belief, even though the models might be fatally flawed.

In his item about Nobelist Tom Schelling, Dan Drezner wrote:

Too often, theorists come up with great models of the world by assuming away petty inconveniences like bureaucratic politics, implementation with incomplete information, or the effects of rhetorical blowback. But before he throws out the baby with the bathwater, Kaplan [who wrote a not entirely complimentary review for] might want to ask himself the following question: if policymakers choose not to rely on social science theories to wend their way through a complex world, what navigational aid would Kaplan suggest in its stead? Policymakers across the political spectrum always like to poke fun at explicit theorizing about international relations. The problem is that they usually rely on historical analogies instead -- which are, in every way, worse than the use of explicit theories.
As Paul Heyne wrote in The Economic Way of Thinking, "No theory means poor theory."
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