The economist has no clothes

In the Scientific American article ”The economist has no clothes”, Robert Nadeau despises the science of Economics because of its flawed foundations, namely the initial artificial borrowing of the methods and tools of physics with the purpose of using them in studying social phenomena, which have an entirely different nature. Needless to say, the modern researcher in Economics has broadly expanded his tools range and the complexity of these tools is sometimes higher than the current practice in natural sciences. However, Mr. Nadeau might have a point in arguing that certain limitations of the internal logic of the paradigm could lead to failure in tackling problems that, at least recently, have been proved to have a capital importance for the humanity.
However, a lengthier discussion might be required here. The point I would like to make is the following: studying natural sciences implies studying a set a laws and rules that have a certain consistency and a fundamental pattern that encompasses the motion of all known (or yet unknown) naturally occurring phenomena. The burden of the natural scientist is to correctly identify and provide a consistent and, if possible, unitary explanation for these phenomena. In contrast, I would argue, there is no such fundamental pattern that could be identified when studying the laws of social phenomena. The reason is that the underlying fabric of the social phenomena evolves at the same time with the evolution of humankind and in close connection with the technological evolution. The answers that the modern economist has to provide are not to age-old phenomena but to brand new challenges brought about by rapid development and by rapid technical progress. The modern economist has to provide real time answers (or models providing those answers) to real time phenomena, phenomena that never occurred in the past and do not have an immutable nature. Today the hot topic is climate change or the depletion of natural resources. Of course, the depletion or scarcity of natural resources has a somewhat permanent nature, and it has already found its place on the desktop of eminent economists, but it really might not be the hot topic or the priority for tomorrow’s society, when people would have learned to produce the necessities of life from a scant of the resources required today (think of Startrek-the SF movie, when you push a button, and the matter generating device will instantly provide you with the steaming hot and spicy favorite food).
In conclusion, the failure of the modern economist to provide useful answers to modern day problems might not reside in the limitations or the “wrong assumptions” of the paradigm but rather in the lack of preparation in recognizing and adequately modeling the newly emerging phenomena. In it also understandable why outstanding economists failed to provide answers, or worst, provided answers that were proven to be wrong for the problems we are confronting today: the reason is that certain phenomena simply did not exist at the time they used their prodigious minds to provide adequate and brilliant answers to the problems of their contemporaneous society.In the light of the arguments presented above, the recipe for the successful modern economist would be: work harder (i.e. read the classics), think faster (i.e. read the latest issues of the economic journals), and be prepared for the unknown (i.e. be prepared to change your mind and give up your dearest ideas)…but hey, THIS IS an age-old recipe:).

The Olympics of dopes

Doping is a major problem in sports these days. With the Beijing Olympics on-going, we will certainly witness new evidence of illegal substance use by athletes. What is worst, this could only be the tip of the iceberg. The reason is that the rate of developing new enhancement substances is likely to be higher than the development of the means of control and testing.
Certainly, the Olympic spirit should be kept. This means that there should be sports events where only the genuine athletic capabilities should be displayed. But I think that there should be an alternative series of events where all kind of enhancement drugs should be allowed, except maybe those with proven high toxicity levels. After all, chemical compounds are part of our daily life. Not everyone can use them. Just a fortunate few can tremendously benefit from them. It is part of the evolution. It should be clear by now that evolution means accepting new challenges, even in the form of chemical compounds.
Of course, the spirit of the games requires that one should not have a competitive edge that is not accessible to others. But as long as every athlete is allowed to use whatever suits him best, and he is aware of the situation I think it is a fair game. The flip side of the coin is the eventual health hazards for the athletes. But this is also part of the game. After all, conventional training might not be all that healthier either. It will be up to the athlete to decide how much to push its limits.
Along the same line of thoughts, maybe a discussion of what kind of apparel should be allowed for use in certain disciplines would be necessary very soon. Certainly, a number of sports depend crucially of the quality of the gear the human body needs in order to perform that specific sport, for example tennis or skiing. In other sports, the distinction between what is really needed and what is used precisely to expand the natural range of human capabilities is less clear. The obvious example is swimming: since the introduction of the new swimming suits (Speedo is one leading brand), world records fall one after another. It is clear these high-tech suits changed the name of the game. Who would dare not to use them, while maintaining hopes for a good result? The use of these new materials is commonly accepted, but what if you have an outstanding swimmer who happens to have a severe allergy to the fabric of these new swimming suits? What then? Even more, as research for new technologies evolves, it is likely that devices like artificially engineered red cells would be common place. These are deemed to be ten times more efficient at transporting oxygen than their organic counterpart. If there are no side-effects what-so-ever, should they be used or forbidden?
I say: let the athletes decide and make the alternative Olympics of dopes a reality, and who knows, it might be a whole lot of new kind of fun. Even more, maybe then we will finally be able to enjoy traditionally drug-free Olympics, like they used to be in Olympia almost 3000 years ago.

Competition vs. cooperation

One of the ingredients of the success of humankind is cooperation. Humans have learned from early stages to organize and coordinate individual efforts towards common goals and this provided them with lasting advantages over other species. Today’s complex society requires an ever higher level of integration, coordination and cooperation between individuals. Somewhat paradoxically however, one of the important forces of the free market economy is competition. Competition between firms in the context of perfectly competitive markets it is known to bolster productivity and innovation, which ultimately leads to the desired progress. It is however wrong to assume that competition should be stretched at every level of society. Certainly, a certain degree of competition between individuals, even within the same firm, or between countries might have some positive effects but the risk of serious problems increases exponentially with the increase in competition between these entities. I have written before about the line that should be drawn (in red) between the corporate world and the private citizen. Competition has positive effects in the corporate world, but not necessarily outside it. In fact, I would argue strongly in favor of cooperation over competition and the future belongs to those societies that favor cooperation over individualism.