The argument is not new, which only means that it is a truth long known: The new astrology – By fetishising mathematical models, economists turned economics into a highly paid pseudoscience. But I have to say that this is a very long and tedious article, so long and tedious that no one will ever read it, at least among the economists. And this is point blank wrong:
After the Great Recession, the failure of economic science to protect our economy was once again impossible to ignore.
The failure of economic theory has been the least discussed issue among economists I have ever seen. If there has been a serious post mortem, I haven’t come across it. And the supposed issue, if any has arisen, has been the failure to predict the GFC which could never have been predicted. Even trying to trace it after it all happened has been near impossible. A crisis will almost inevitably seem to come from nowhere, although there will be some who can say afterwards that they could see it all before. The actual problem is with the theory itself, but let us go to the text to see what they have to say:
Ultimately, the problem is . . . with uncritical worship of the language used to model them, and nowhere is this more prevalent than in economics. The economist Paul Romer at New York University has recently begun calling attention to an issue he dubs ‘mathiness’ – first in the paper ‘Mathiness in the Theory of Economic Growth’ (2015) and then in a series of blog posts. Romer believes that macroeconomics, plagued by mathiness, is failing to progress as a true science should, and compares debates among economists to those between 16th-century advocates of heliocentrism and geocentrism. Mathematics, he acknowledges, can help economists to clarify their thinking and reasoning. But the ubiquity of mathematical theory in economics also has serious downsides: it creates a high barrier to entry for those who want to participate in the professional dialogue, and makes checking someone’s work excessively laborious. Worst of all, it imbues economic theory with unearned empirical authority. . . .
Romer is not the first to elaborate the mathiness critique. In 1886, an article in Science accused economics of misusing the language of the physical sciences to conceal ‘emptiness behind a breastwork of mathematical formulas’. More recently, Deirdre N McCloskey’s The Rhetoric of Economics (1998) and Robert H Nelson’s Economics as Religion (2001) both argued that mathematics in economic theory serves, in McCloskey’s words, primarily to deliver the message ‘Look at how very scientific I am.’
You cannot use maths because there is nothing to count, or at least nothing to count that really counts. That, and the fact that what was true last year is only the most imperfect guide to what will happen next. You cannot have a predictive theory of surprise, change and innovation. You can only have a theory of what conditions will lead to surprise, change and innovation, but that was done by the 1850s.