This post is a collection of quotes about economics and sociology. There are about 510 quotes listed below, organized into 84 categories. This post will be a work in progress as I continue to organize and collect quotes. Although I don't agree with every quote listed below, I have included anything I think is interesting. The painting above is by Andre Lhote titled 14 juillet, Port de Bordeaux-Poincare (1913-1914).
The categories listed below don't have strict boundaries and most quotes work for multiple categories. Despite the inherent subjectiveness, I tried my best to organize the quotes as accurately as possible. Here is a list of the categories:
1. Academic economics, 2. Academic journals, 3. Agriculture, 4. Banking, 5. Capital theory, 6. Charity, 7. Classical economics, 8. Communism, 9. Comparative systems, 10. Competition, 11. Complexity economics, 12. Consumption, 13. Corruption, 14. Creativity in economics, 15. Current events, 16. Decision theory, 17. Democracy, 18. Division of labor, 19. Econometrics, 20. Education, 21. Employment, 22. Equilibrium, 23. Evolutionary economics, 24. Experimental economics, 25. Financial regulation, 26. Forecasting economics, 27. Foreign aid, 28. Game theory, 29. General equilibrium theory, 30. Government debt, 31. Healthcare, 32. History economics, 33. Holism economics, 34. Inequality, 35. Infrastructure, 36. Innovation, 37. International trade, 38. Investing, 39. Invisible hand, 40. Language economics, 41. Leisure, 42. Libertarianism, 43. Mathematical economics, 44. Mechanism design, 45. Microeconomics, 46. Money, 47. Money supply, 48. Monopolies, 49. Nobel prize in economics, 50. Normative economics, 51. Ontology economics, 52. Optimization, 53. Pluralism economics, 54. Population, 55. Poverty, 56. Price theory. 57. Private property, 58. Public choice theory, 59. Rational expectations, 60. Reason in economics 61. Regulations, 62. Simulation economics, 63. Slavery, 64. Social contract theory, 65. Social security, 66. Sustainable technology, 67. Taxation, 68. Understanding in economics, 69. Utilitarianism, 70. Utopia, 71. Wealth, 72. Welfare theory, 73. What is economics? 74. World government
1.Academic economics
Ha-Joon Chang:
"People graduate without even knowing the GDP of their country." (Talks at Google, YouTube 2014)
John Cochrane:
"Economics should be much better at being the ark for simple lessons of economic history and experience. Alas our current professional training makes us pretty terrible at this." (Russ Roberts on Economic Humility, 2017)
John Hicks:
"There is much of economic theory which is pursued for no better reason than its intellectual attraction; it is a good game. We have no reason to be ashamed of that, since the same would hold for many branches of pure mathematics." (1979, Imagining Economics Otherwise)
Stephen King:
"Young economists arrive in the financial world with little or no knowledge of how the financial system operates. This is a matter of collective guilt. Economic models typically assume the financial system is a black box." (Quoted in What's the use of economics? by Diane Coyle, 2012)
Tony Lawson:
"Suffice it to say that an intellectual opening up of the economics academy would be revolutionary indeed, allowing at least the possibility of genuine debate on all issues and the promise of progress and a freeing up of resources for relevant research that have long been allocated for practices that have little if any grounding or rationale or obvious practical benefit." (The Nature and State of Modern Economics, 2015)
Tony Lawson:
"As is widely recognised, it is mostly only modelers that get appointments in university economic faculties; it is mostly only such modelers that get promoted; it is mostly only modelers that get research grants from certain sources; it is mostly only PhD's and post doctorate research taking the form of mathematical deductive modeling that get funding; it is mostly only this sort of research that can get published in core journals, etc." (The Nature and State of Modern Economics, 2015)
Tony Lawson:
"In other words, I think it is fair to say that, within the economics academy, there are instance where this mathematising project maintains itself by closing off lines of intellectual competition, where it manipulates conditions both of variety generation and environmental selection." (The Nature and State of Modern Economics, 2015)
Tony Lawson:
"This insistence often runs over to claiming that any contribution that does not take the form of a mathematical model is not proper economics." (The Nature and State of Modern Economics, 2015)
James Mirrlees:
"Economics takes a while to learn, even if much of it is in a way quite simple. It is simple to be wrong as well as to be right, and it is none too easy to distinguish between them." (1996, James Mirrlees in: Anders Barany, Nobelstiftelsen)
Dani Rodrik:
"I felt that many of the criticisms coming from outside the field missed the point. There was too much misinformation about what economists really do." (Economics Rules, 2015)
Dani Rodrik:
"For some, these constraints represent a kind of methodological straitjacket that crowds out new thinking But it is easy to exaggerate the rigidity of the rules within which the profession operates." (Economics Rules, 2015)
Dani Rodrik:
"Pluralism with respect to conclusions is one thing; pluralism with respect to methods something else. No academic discipline is permissive of approaches that diverge too much from prevailing practices, and economics is unforgiving of those who violate the way work in the discipline is done. An aspiring economist has to formulate clear models and apply appropriate statistical techniques." (Economics Rules, 2015)
Dani Rodrik:
"One of the most frequent complaints about economics labels it a club that shuns outsiders. This exclusiveness makes the discipline insular, according to the critics, can closed to new and alternative perspectives on economics. Economics should become more inclusive, they argue, more pluralistic and more welcoming of unorthodox approaches." (Economics Rules, 2015)
Mark Skousen:
"I've felt for some time that economics needs to be taught differently by economists who actually have had experience making a payroll or investing on Wall Street. When economics is taught by pure academics watch out." (Brainy Quote)
Michael Spence:
"The research side of academic life is often viewed from the outside as a solo and, at times, lonely activity. In fact, it is quite the opposite: a communal activity in significant part where interaction and interchange generate ideas and critiques of them." (Brainy Quotes)
Muhammad Yunus
"I began my career as an economics professor but became frustrated because the economic theories I taught in the classroom didn't have any meaning in the lives of poor people I saw around me. I decided to turn away from the textbooks and discover the real life economics of a poor person's existence." (Brainy Quote)
2. Academic journals
George Akerlof:
"Economists know there's a basic problem with any fixed reward system: people work to the test." (AEA Publishing and Promotion in Economics, 2017)
George Akerlof:
"People divide their effort between tasks according to the respective rewards of those tasks. If the rewards are to publish in the top 5, people will put their effort into whatever it takes to publish there. But that may not be the effort that makes them the best economist. Furthermore, in real life the game does not stop there. There's a doubly bad equilibrium because those who are successful at the task are those who then set the reward system in the future." (AEA Publishing and Promotion in Economics, 2017)
George Akerlof:
"The authors should own the paper. When we submit the paper it should be our paper. We shouldn't have to rewrite it for whatever the referee thinks the paper should be." (AEA Publishing and Promotion in Economics, 2017)
George Akerlof:
"I believe we should allow stuff that is much fuzzier so people can say what's in their hearts and that way may fill in some of these vacuums that are now black holes." (AEA Publishing and Promotion in Economics, 2017)
George Akerlof:
"What I'm worried most of all, is what we don't see. I'm worried about the analysis that is never seen, that never becomes a paper and it doesn't become a paper because it can't be a paper. It can't become a paper because that's not what a paper in economics is all about." (AEA Publishing and Promotion in Economics, 2017)
Kurt Bills:
"Discovering various economic works, reading financial periodicals and keeping up on current events in geopolitics and economics around the world opened my eyes to many facets of how the extended order works." (Brainy Quotes)
Asit Biswas, Julian Kircherr:
"Practitioners very rarely read articles published in peer reviewed journals. We know of no senior policymaker or senior businessman who ever read regularly peer reviewed journals." (Prof, no one is reading you, 2015)
Angus Deaton:
"The top 5 journals are not really much about communicating new findings, that's a shame in some ways." (AEA Publishing and Promotion in Economics, 2017)
Angus Deaton:
"There's been a large increase in evaluation by metrics, whether within departments or across departments by government agencies. In those, international journals are given very high weight." (AEA Publishing and Promotion in Economics, 2017)
Angus Deaton:
"When somebody tells me, 'We'll that's your favorite candidate for bringing here, but we don't like their work at all' and you can try to explain but often you get nowhere at all because there isn't a common ground for communicating that information... That's why these algorithms, and this very silly algorithm (top 5) has become very popular." (AEA Publishing and Promotion in Economics, 2017)
Angus Deaton:
"I think more sophisticated algorithms, if departments used them, deans made departments use them, would actually weaken the position of top journals. So what we have now, counting top journal citations is really stupid I think." (AEA Publishing and Promotion in Economics, 2017)
Angus Deaton:
"I think that thinking about algorithms would be really helpful, even if they are very much a second best solution." (AEA Publishing and Promotion in Economics, 2017)
Drew Fudenberg:
"We're not alone in this, we didn't just for some bizarre reason switch to a bad equilibrium. For some reason parallel things are happening in other fields." (AEA Publishing and Promotion in Economics, 2017)
Drew Fudenberg:
"Since I joined this field, people have complained that papers are too long and are getting longer." (AEA Publishing and Promotion in Economics, 2017)
Drew Fudenberg:
"Another trend in biology, which I think is going on in economics, is more co-authors per paper." (AEA Publishing and Promotion in Economics, 2017)
Drew Fudenberg:
"I'd like to see journals have more papers in their lead journal but also have more subsidiary journals. I believe that's one way forward." (AEA Publishing and Promotion in Economics, 2017)
Aaron Gordon:
"Esoteric topics rules academia. These topics get researched, presented and published and somewhat tragically, immediately dispatched into the far reaches of the JSTOR achieves." (Killing Pigs and Weed Maps: The Mostly Unread World of Academic Papers, 2014)
Lars Peter Hansen:
"This reliance on referees leads to a much more conservative strategy. I think it works against novel papers that cross subfield boundaries and that makes it all the more challenging. Basically it makes the simplest path to publication in the top 5 journals to be high quality follow up papers." (AEA Publishing and Promotion in Economics, 2017)
Lars Peter Hansen:
"I think it's hard to use citation counts in sensible ways that are applicable for young scholars." (AEA Publishing and Promotion in Economics, 2017)
Lars Peter Hansen:
"Sometimes there are papers that basically close a field they are so exceptional. They basically clear up everything so they don't have a whole lot of follow up work and therefore lose the citations." (AEA Publishing and Promotion in Economics, 2017)
Lars Peter Hansen:
"I don't see simple algorithmic alternatives as a way to evaluate young people, but I do think figuring out ways to encourage synergistic activities across subfields and to figure out ways that recognize creativity and possibilities of it at early stages of a career is absolutely vital and important." (AEA Publishing and Promotion in Economics, 2017)
James Heckman (Nobel Prize 2000)
26. "Economic history has suffered a big beating. Economic historians are typically slow to get things out. They do these large scholarly studies. The tenure clock works against them and the publication journal works against them." (How the Economics of the Economics Profession Resists New Thinking, YouTube 2017)
James Heckman:
"Economics... is vulnerable in the following sense that if evidence is presented in anecdotal form or they say this is just descriptive, that is a killer in a lot of top journals." (How the Economics of the Economics Profession Resists New Thinking, YouTube 2017 )
James Heckman:
"When I go to dinner with a group of young pre-tenure PhD economists or talk to graduate students who are thinking about doing research, I find increasingly, and even with post-tenure economists, there seems to be an obsession on ranking themselves by the number of top 5 journals articles published." (AEA Publishing and Promotion in Economics, 2017)
James Heckman:
"If people are really aiming to go just into the top 5 journals and their goal is to publish papers as opposed to contribute to basic knowledge, I think that's a limited vision of economics and what economic research should be." (AEA Publishing and Promotion in Economics, 2017)
Tony Lawson:
"...let me first observe that in economic journals the formalistic modelling activities seem currently to be continuing unabated." (The Nature and State of Modern Economics, 2015)
3. Agriculture
Francois Quesnay:
"Productive expenditure is employed in agriculture, grasslands, pastures, forests, mines, fishing, etc, in order to perpetuate wealth in the form of corn, drink, wood, livestock, raw materials for manufactured goods... Sterile expenditure is on manufactured commodities, house-room, clothing, interest on money, servants, commercial costs, foreign produce etc." (Tableau économique, 1758)
Amartya Sen:
"From the mid-1970s, I also started work on the causation and prevention of famines." (Brainy Quotes)
4. Banking
Adam Smith:
"Though the principles of the banking trade may appear somewhat abstruse, the practice is capable of being reduced to strict rules. To depart upon any occasion from these rules, in consequence of some flattering speculation of extraordinary gain, is almost always extremely dangerous, and frequently fatal to the banking company which attempts it." (The Wealth of Nations, 1776)
5. Capital theory
Merton Miller:
"I had some of the students in my finance class actually do some empirical work on capital structures, to see if we could find any obvious patterns in the data, but we couldn't see any." (Brainy Quotes)
Adam Smith:
"A great stock, though with small profits, generally increases faster than a small stock with great profits. Money, says the proverb, makes money. When you have a little, it is often easier to get more. The great difficulty is to get that little." (The Wealth of Nations, 1776)
Adam Smith:
"No fixed capital can yield any revenue but by means of a circulating capital." (The Wealth of Nations, 1776)
6. Charity
Henry George:
"For charity cannot right a wrong; only justice can do that. Charity is false, futile, and poisonous when offered as a substitute for justice." (How to Help the Unemployed, 1894)
7. Classical economics
William Stanley Jevons:
"The conclusion to which I am ever more clearly coming is that the only hope of attaining a true system of economics is to fling aside, once and forever, the mazy and preposterous assumptions of the Ricardian school. Our English economists have been living in a fool's paradise." (The Theory of Political Economy, 1871)
David Warsh:
"[The Wealth of Nations] reads as much like a present-day business magazine as an eighteenth-century treatise on political economy... The book contains not a single chart, few enough numbers and no diagrams, but so penetrating was its reasoning that it launched a science." (The Knowledge and Wealth of Nations, 2006)
8. Communism
Friedrich Hayek:
"The more the state 'plans' the more difficult planning becomes for the individual." (The Road to Serfdom, 1944)
Friedrich Hayek:
"There mere idea that the planning authority could ever possess a complete inventory of the amounts and qualities of all the different materials and instruments of production of which the manager of a particular plant will know or be able to find out makes the whole proposal a somewhat comic fiction. Once this is recognized it becomes obvious that what prices ought to be can never be determined without relying on competitive markets." (Two Pages of Fiction, 1982)
Karl Marx:
"Communism differs from all previous movements in that it overturns the basis of all earlier relations of production and intercourse, and for the first time consciously treats all natural premises as the creatures of hitherto existing men, strips them of their natural character and subjugates them to the power of the united individuals." (The German Ideology, 1845)
Karl Marx:
"Communism... is the genuine resolution of the antagonism between man and nature and between man and man; it is the true resolution of the conflict between existence and essence, objectification and self-affirmation, freedom and necessity, individual and species. It is the riddle of history solved and knows itself as the solution." (Paris Manuscripts , 1844)
Karl Marx:
"The proletarians have nothing to lose but their chains. They have a world to win." (The Manifesto of the Communist Party, 1848)
Ludwig von Mises:
"The characteristic mark of this age of dictators, wars and revolutions is its anti-capitalistic bias. Most governments and political parties are eager to restrict the sphere of private initiative and free enterprise." (Socialism, 1922)
9. Comparative systems
Roger Backhouse and Bradley Bateman:
"In the past there were more course on comparative economic systems contrasting capitalism with socialism, French, Scandinavian and British models." (Wanted Worldly Philosophers. New York Times, 2011)
Ha-Joon Chang:
"In Singapore, 90% of land is owned by government. Where is the theory that explains this economy?" (Talks at Google, YouTube 2014)
10. Competition
Adam Smith:
"The establishment of any new manufacture, of any new branch of commerce, or any new practice in agriculture, is always a speculation, from which the projector promises himself extraordinary profits. These profits sometimes are very great, and sometimes, more frequently, perhaps, they are quite otherwise; but in general they bear no regular proportion to those of other older trades in the neighbourhood. If the project succeeds, they are commonly at first very high. When the trade or practice becomes thoroughly established and well known, the competition reduces them to the level of other trades." (The Wealth of Nations, 1776)
11. Complexity economics
Ragnar Frisch:
"In this feverish world of ours, where one wants the economic analyses to produce easily understandable results quickly and at the least possible cost, some of us have fallen into the habit of assuming for simplicity that the hundreds sometimes thousands of variables that enter into the analyses are linked together by very simple relationships." (Theory of Production, 1964)
Friedrich Hayek:
"How does economics really look like when you recognize it as the prototype of a new kind of science of complex phenomena which could not employ the simple model of mechanics or physics, but had to deal with what then I described as mere pattern predictions, certain limited prediction?" (Interview with Gary North and Mark Skousen in Hayek on Hayek)
Paul Krugman:
"Economics is harder than physics; luckily it is not quite as hard as sociology." (Peddling Prosperity, 1994)
Tony Lawson:
"...we are faced not with a ubiquity of regular behavioural patterns underpinned by isolated systems of human atoms, but with the perpetual emergence of novelty..." (The Nature and State of Modern Economics, 2015)
Tony Lawson:
"Economics too has its more basic concerns. There include such matters such as social relations, collective practices, social positions, community, capitalism, money, corporations, technology, gender, rights obligations, human nature, care trust, crises, economy and so forth." (The Nature and State of Modern Economics, 2015)
Tony Lawson:
"The conception of social ontology I have in mind is processual in that social reality, which itself is an emergent phenomenon of human interaction, is recognized as being highly transient, being reproduced and/or transformed through practice; social reality is in process, essentially a process of cumulative causation." (The Nature and State of Modern Economics, 2015)
Tony Lawson:
"Modern economics is unrealistic because most of the time economists are trying to make theories about a world that's open, structured, internally related and processual conform to a world that's atomistic and closed." (Really Reorienting Modern Economics, YouTube 2010)
Jedrzej Malko
"The cognitive value of bringing all dimensions of social reality under one common denominator is negative. The search for any one prime mover, the true and hidden structure or some general logic of history is always harmful. The attraction of simple answers lies not in what they reveal about the world but in how much they hide from us, making life less complicated than it should be." (Economics and its Discontents 2017)
Alfred Marshall:
"Nature's action is complex: and nothing is gained in the long run by pretending it is simple and trying to describe it in a series of elementary propositions." (Principles of Economics, 1890)
Gary Saul Morson, Morton Shapiro:
"Joe Mokyr's 'The Enlightened Economy: An Economic History of Britain 1700-1850' explains the rise of Britain to economic preeminence through a complex plurality of factors irreducible to any one of them." (Cents and Sensibility, 2017)
Paul Ormerod:
"Much of this knowledge is held at decentralized levels in tacit form which is hard or even impossible to codify." (The future of economics uses the science of real life social networks, 2016)
Peter Radford:
"Economists have limited their options by reducing their subject to that set of issues most easily modeled according to the disciplines' self referential code of modeling." (Why Mainstream Economic Models Make Little Sense, 2016)
Peter Radford:
"It is always tempted, therefore, to bang such problems into bizarre shapes in order to attempt to redefine them for analysis, hence the blind spots and contortions over the recent crisis and over inequality." (Why Mainstream Economic Models Make Little Sense, 2016)
Noah Smith:
"Economics deals with hideously complex systems where controlled experiments are usually impossible. If you want to isolate one phenomenon, you're going to have to ignore an awful lot of interesting stuff. But if you think about it, that describes most of the situations we face in our daily lives." (Economics isn't Science or Literature, 2014)
Joseph Stiglitz:
"The world is so complex to try to simplify it into a few mathematical equations is an enormous achievement. The question always is, what are you leaving out? If it gets too narrow, the blinders may rule out things that are really important." (Joseph Stiglitz on what makes a good economist, YouTube 2014)
Justin Wolfers:
"More than any other economics I know, [Deaton] understands that to get the big picture right you've got to get all the small details right too." (Why Angus Deaton Deserved the Economics Nobel Prize, New York Times 2015)
12. Consumption
Thorstein Veblen:
"Conspicuous consumption of valuable goods is a means of reputability to the gentleman of leisure." (The Theory of the Leisure Class, 1899)
Thorstein Veblen:
"The superior gratification derived from the use and contemplation of costly and supposedly beautiful products is, commonly, in great measure a gratification of our sense of costliness masquerading under the name of beauty." (The Theory of the Leisure Class, 1899)
Thorstein Veblen:
"In order to stand well in the eyes of the community, it is necessary to come up to a certain, somewhat indefinite, conventional standard of wealth." (The Theory of the Leisure Class, 1899)
13. Corruption
Louis Brandeis:
"Publicity is justly commended as a remedy for social and industrial disease. Sunlight is said to be the best of disinfectants; electric light the most efficient policeman." (Other People's Money - And How Bankers Use It, 1914)
Henry George:
"To prevent government from being corrupt and tyrannous, its organization and methods should be as simple as possible... and in all its parts it should be kept as close to the people as directly within their control as may be." (Social Problems, 1883)
John Kenneth Galbraith:
"Economics, so long as it is thus taught, becomes, however unconsciously, a part of the arrangement by which the citizen or student is kept from seeing how he or she is, or will be, governed." (Power and the Useful Economist, 1973)
James Madison:
"If men were angels, no government would be necessary. If angels were to govern men, neither external nor internal controls on government would be necessary." (Federalist No. 51, 1788)
14. Creativity in economics
Milton Friedman:
"The construction of hypotheses is a creative act of inspiration, intuition, invention; its essence is the vision of something new in familiar material. The process must be discussed in psychological, not logical, categories; studied in autobiographies and biographies, not treatises on scientific method; and promoted by maxim and example, not syllogism or theorem." (The Methodology of Positive Economics, 1953)
15. Current events
George Akerlof:
"There's a whole type of economics that economists simply don't do that doesn't occur in our journals. For examples economists did not provide detailed reportage of what was happening in the financial system [in 2005]." (AEA Publishing and Promotion in Economics, 2017)
Eric Beinhocker:
"Students are providing an important pushing force rejecting curricula that paints abstract imaginary worlds and tells them little about the problems that will shape their future." (The Radical Remaking of Economics, 2016)
Asit Biswas, Julian Kircherr:
"Professors are not shaping today's public debates or influencing policies even though they may be some of the most talented thinkers." (Prof, no one is reading you, 2015)
Ha-Joon Chang:
"People that are not professional economists can have some judgements on economic issues. Sometimes their view can be better than professional economists because they may be more rooted in reality and less narrowly rooted." (Economics for Everyone RSA animate. YouTube 2016)
James Heckman:
"Did I need a Markov switching model to tell me about the stock market meltdown in 1987 or 2007? We had newspaper accounts. We had journalistic accounts. And I think the profession has had a real difficulty utilizing all these sources of information including observer reports. I mean literally you talk to people on the street." (How the Economics of the Economics Profession Resists New Thinking, YouTube 2017)
Wassily Leontief:
"Much of current academic teaching and research has been criticized for its lack of relevance, that is, of immediate practical impact... The trouble is caused, however, not by an inadequate selection of targets, but rather by our inability to hit squarely any one of them... The weak and all too slowly growing empirical foundations clearly cannot support the proliferating superstructure of pure, or should I say, speculative economic theory." (1971, Theoretical assumptions and nonobserved facts)
Paul Samuelson:
"My notion of a fruitful economic science would be that it can help us explain and understand the course of actual economic history. A scholar who seriously addresses commentary on contemporary monthly and yearly events is, in this view, practicing the study of history - history in its most contemporary time phasing." (An interview with Paul A. Samuelson, 2003)
James Tobin:
"Economics has always flourished and acquired energy from controversies generated by practical policy questions of the day. That was true in the times of Smith, and Ricardo, and Keynes, and it is true today. These periods of division and revolution and counterrevolution are generally followed by periods of synthesis and consolidation from which the science emerges stronger. I am optimistic that this will happen again, and that the best of the insights of the new classicals will be absorbed in a mainstream, in which the essential insights of Keynesian economists also survive." (1983, Conversations with Economists)
Unlearning Economics:
"In practice, this vision of the economy detracts attention from important social issues and can even serve to conceal outright abuses." (No, Criticizing Economics is not Regressive, 2017)
16. Decision theory
Kenneth Arrow:
"Decision theory, as it has grown up in recent years, is a formalization of the problems involved in making optimal choices. In a certain sense - a very abstract sense, to be sure - it incorporates among others operations research, theoretical economics, and wide areas of statistics, among others." (The Economics of Information , 1984)
Robert Shiller:
"It amazes me how people are often more willing to act based on little or no data than to use data that is a challenge to assemble." (Brainy Quotes)
17. Democracy
Peter Diamond:
"Analytical expertise is needed to make government more effective and efficient. Skilled analytical thinking should not be drowned out by mistaken, ideologically driven views that more is always better or less is always better." (2011, New York Times)
Joe Earle:
"The two main areas are reforming economics education in universities and trying to make the case to the general public about why this matters to them. This is something we call democratizing economics, which is about trying to make economics as a subject as a public conversation and a policymaking process more accessible, more participatory, more inclusive because we believe without that you can't really have democracy." (Curriculum Reform is Vital if Economics is to Serve Society, YouTube 2016)
Joe Earle:
"In the book we talk about how econocracy is a system in which the economy has become the central goal of politics... [Today] it's become an increasingly narrow conversation. The people who feel like they have the language to be able to participate in that or to be able to make informed political choices is increasingly shrinking." (Curriculum Reform is Vital if Economics is to Serve Society, YouTube 2016)
Friedrich Hayek:
"A limited democracy might indeed be the best protector of individual liberty and be better than any other form of limited government, but an unlimited democracy is probably worse than any other form of unlimited government, because its government loses the power even to do what it thinks right if any group on which its majority depends thinks otherwise." (Letter to the Times, 1978)
George Stigler:
"In spite of assigning little influence of economists' preachings on actual public policy, I do not believe that economists' influence is negligible. The reconciliation of these views lies in the fact that economists are scientists as well as preachers. Our science seeks to understand how economic institutions and economic systems work, and no informed person can deny that we have made much progress in this work." (1988, The Effect of Government on Economic Efficiency)
Emile Durkheim:
"Nowadays, the phenomenon (of division of labor) has developed so generally it is obvious to all." (The Division of Labor in Society, 1893)
Emile Durkheim:
"The division of labour is not of recent origin, but it was only at the end of the eighteenth century that social cognizance was taken of the principle. Though, until then, unwitting submission had been rendered to it. To be sure, several thinkers from earliest times saw its importance; but Adam Smith was the first to attempt a theory of it. Moreover, he adopted this phrase that social science later lent to biology." (The Division of Labor in Society, 1893)
Adam Smith:
"The greatest improvement in the productive powers of labour, and the greatest part of skill, dexterity, and judgment with which it is any where directed, or applied, seem to have been the effects of the division of labour." (The Wealth of Nations, 1776)
Adam Smith:
"This great increase of the quantity of work which, in consequence of the division of labour, the same number of people are capable of performing, is owing to three different circumstances; first, to the increase of dexterity in every particular workman; secondly, to the saving of the time which is commonly lost in passing from one species of work to another; and lastly, to the invention of a great number of machines which facilitate and abridge labour, and enable one man to do the work of many." (The Wealth of Nations, 1776)
Joshua Angrist:
"Regression is just a way to control for things, to try and hold characteristics of groups that you're trying to compare fixed." (EconTalks: Joshua Angrist on Econometrics and Causation, 2014)
Ragnar Frisch:
"Econometrics has as its aim to subject abstract laws of theoretical political economy or 'pure' economics to experimental and numerical verification, and thus to turn pure economics, as far as possible, into a science in the strict sense of the word." (On a Problem in Pure Economics, 1926)
Ragnar Frisch:
"I have insisted that econometrics must have relevance to concrete realities, otherwise it degenerates into something which is not worthy of the name econometrics, but ought rather to be called playometrics." (Quoted in The Concise Encyclopedia of Economics)
Clive Granger:
"Rob Engle and I are concerned with extracting useful implications from economic data, and so the properties of the data are of particular importance." (Brainy Quotes)
James Heckman:
"I've worked on China and trying to look at what technical change is in China. If you were to use 20 year old data sets, it's a waste of time. It's much better to actually go the sites in Shanghai and further in the interior to see what the technologies are, who is actually engaged and what kind of investment is being made. Those anecdotal accounts are things that banks do, what business school people do but it's not what a real economists does." (How the Economics of the Economics Profession Resists New Thinking, YouTube 2017)
James Heckman:
"I think there's been a huge shift away from understanding behavior and moving towards statistical artifacts that are hard to interpret as responses to economic questions. So I think the credibility revolution has been somewhat overstated and not properly appreciated as having really turned focus away from serious economic analysis towards something I think is purely statistical." (EconTalks: James Heckman on Facts, Evidence and the State of Econometrics, 2016)
Adam Ozimek:
"I think Russ is most correct in arguing for more humility from economists. But I would add that this is a general problem not particular to economists, and I would conjecture that on average those who do not attempt to tie down their beliefs with empirical research suffer from an even greater humility gap than those who do. Within economics, failure to regularly cite empirical results, or lack of familiarity with them, seems pretty strongly correlated with lack of humility and not vice versa." (The Value of Empirical Economics, 2017)
Edmund Phelps:
"Statistical studies are all over the lot about the pluses and minuses of raising the minimum wage." (Brainy Quotes)
Russ Roberts:
"One response to the questions I am raising is that we have new techniques that solve a lot of the problems I’m talking about. These new empirical techniques have allowed us to run quasi-experiments that while not perfect, eliminate many of the problems of complexity and multi-causal reality. I remain a skeptic. But maybe the champions of the new empirical techniques will convince the skeptics. We’ll see... We are notoriously unreliable at the things the world really cares about and asks of our profession... What I am arguing here is that the combination of economics with statistics in a complex world promises a lot more than it delivers. We economists should be more humble and honest about the reliability and precision of statistical analysis." (What Do Economics Actually Know? 2017)
Noah Smith:
"Is McCloskey unaware of the fact that physicists regularly use statistical significance testing, of the classic R.A. Fisher type?" (Dierdre McCloskey Says Things, 2015)
Noah Smith:
"The new [econometric] techniques - regression discontinuity, difference-in-difference, synthetic controls - are mostly pretty easy and quick for any smart person to grasp." (A new age of econ imperialism is coming, 2016)
Noah Smith:
"By not teaching our introductory students even the most basic techniques for testing theories, we are asking them to take conventional wisdom - often, incorrect conventional wisdom - on faith. That can’t be good." (Theory Versus Data? You Shouldn't Have to Choose, 2016)
Jan Tinbergen:
"As a boundary science, econometrics is younger than the adjacent regions, which fact likewise has advantages and disadvantages. As a disadvantage, the lack of an established doctrine, and also the lack of established textbooks, can be felt; as an advantage is the fresh enthusiasm, with which its students work." (Econometrics, 1951)
Robert Owen:
"Train any population rationally, and they will be rational. Furnish honest and useful employments to those so trained, and such employments they will greatly prefer to dishonest or injurious occupations. It is beyond all calculation the interest of every government to provide that training and that employment; and to provide both is easily practicable." (A New View of Society, 1813)
Bernie Sanders:
"According to a 2007 report by the Federal Revere Bank of Minneapolis, 'The most efficient means to boost the productivity of the workforce 15 to 20 years down the road is to invest in today's youngest children.'" (Our Revolution, 2016)
Bernie Sanders:
"Today in America, hundreds of thousands of bright young people who have the desire and the ability to get a college education will not be able to do so because their families lack the money." (Our Revolution, 2016)
Adam Smith:
"For a very small expence the public can facilitate, can encourage, and can even impose upon almost the whole body of the people, the necessity of acquiring those most essential parts of education." (The Wealth of Nations, 1776)
Henry George:
"Though custom has dulled us to it, it is a strange and unnatural thing that men who wish to labor, in order to satisfy their wants, cannot find the opportunity... The real trouble must be that supply is somehow prevented from satisfying demand, that somewhere there is an obstacle which prevents labor from producing the things that laborers want."
Henry George:
"Why should charity be offered the unemployed? It is not alms they ask. They are insulted and embittered and degraded by being forced to accept as paupers what they would gladly earn as workers. What they ask is not charity, but the opportunity to use their own labor in satisfying their own wants. Why can they not have that? It is their natural right." (How to Help the Unemployed, 1894)
Henry George:
"To admit that labor needs protection is to acknowledge its inferiority; it is to acquiesce in an assumption that degrades the workman to the position of a dependent, and leads logically to the claim that the employee is bound to vote in the interest of the employer who provides him with work." (Protection or Free Trade? 1886)
James Heckman
"The scientific study of labor economics provided the opportunity for me to unite theory with evidence my lifetime intellectual passion." (Brainy Quotes)
Arthur MacEwan:
"It's not hard to figure out what kinds of jobs should be created with government stimulus spending. Prime examples include environmental repair and preservation, education and training and infrastructure repair and extension." (What Would Full Employment Cost? 2015)
Karl Marx:
"The worker's existence is thus brought under the same condition as the existence of every other commodity. The worker has become a commodity, and it is a bit of luck for him if he can find a buyer... " (Paris Manuscripts , 1844)
Karl Marx:"He becomes an appendage of the machine, and it is only the most simple, most monotonous, and most easily acquired knack, that is required of him." (The Manifesto of the Communist Party, 1848)
Ludwig von Mises:
"Government spending cannot create additional jobs. If the government provides the funds required by taxing the citizens or by borrowing from the public, it abolishes on the one hand as many jobs as it creates on the other." (Socialism, Epilogue 1947)
Elinor Ostrom:
"What is missing from the policy analyst's tool kit - and from the set of accepted, well-developed theories of human organization - is an adequately specified theory of collective action whereby a group of principals can organize themselves voluntarily to retain the residuals of their own efforts." (1966, Governing the Commons)
Christopher Pissarides:
"The development of formal mathematical models with search frictions coincided with the time that I was looking for a topic for my PhD research. Two things about search impressed me most. In the Phelps volume, search was claimed as a microfoundation for the natural rate of unemployment, introduced just a year or two before by Milton Friedman (1968) and Edmund Phelps (1967), and for the inflation-unemployment trade-off (the Phillips curve)."
David Ricardo:
"Labour, like all other things which are purchased and sold, and which may be increased or diminished in quantity, has its natural and its market price. The natural price of labour is that price which is necessary to enable the labourers, on with another, to subsist and to perpetuate their race, without either increase or diminution." (Principles of Political Economy and Taxation, 1817)
Adam Smith:
"The real and effectual discipline which is exercised over a workman is that of his customers. It is the fear of losing their employment which restrains his frauds and corrects his negligence." (The Wealth of Nations, 1776)
Ragnar Frisch:
"Questions of convergence under an infinite time horizon will depend so much on epsilontic refinements in the system of assumptions - and on the infinite constancy of these refinements - that we are humanly speaking absolutely certain of getting infinite time horizon results which have no relevance to concrete reality. And in particular we are absolutely certain of getting irrelevant results if such epsilontic exercises are made under the assumption of a constant technology." (Econometrics in the World of Today, 1970)
John Kenneth Galbraith:
"It is my guiding confession that I believe the greatest error in economics is in seeing the economy as a stable, immutable structure." (A Journey Through Economic Time, 1994)
Tony Lawson:
"[The social realm] is reproduced and transformed through practice." (Confronting Mathematical Models in Economics, YouTube 2014)
George Akerlof:
"If there is low power of tests for what is good or bad science, there are equilibrium traps. In these traps, new and better paradigms will fail to be adopted. On the contrary, such bad equilibrium traps disappear if there are high power of tests." (AEA Publishing and Promotion in Economics, 2017)
"Regression is just a way to control for things, to try and hold characteristics of groups that you're trying to compare fixed."
Joshua Angrist:
"Each of these is an attempt to generate some kind of apples to apples comparison out of observational data." (EconTalks: Joshua Angrist on Econometrics and Causation, 2014)
Joshua Angrist:
"I can't imagine seeing an empirical paper about cause and effect which doesn't at least show me the author's best effort at some kind of regression estimates where they control for the observed difference between groups." (EconTalks: Joshua Angrist on Econometrics and Causation, 2014)
David Autor:
"It's not that I think our estimates are cooked or even that sensitive. It's that they might miss other important margins. And I'm happy to concede that point. I mean, we've tried. It's not that we've sort of agreed to just sort of punt on that question. There's probably a lot of ways to look for those missing margins. We really haven't found them." (EconTalks: David Autor on Trade, China and U.S. Labor Markets, 2016)
Trygve Haavelmo:
"What makes a piece of mathematical economics not only mathematics but also economics is, I believe, this: When we set up a system of theoretical relationships and use economic names for the otherwise purely theoretical variables involved, we have in mind some actual experiment, or some design of an experiment, which we could at least imagine arranging, in order to measure those quantities in real economic life that we think might obey the laws imposed on their theoretical namesakes." (1994, The Probability Approach in Economics)
Tony Lawson:
"Firms, money, markets, institutions, social relations, even individual identities, cannot be experimentally isolated for each other." (The Nature and State of Modern Economics, 2015)
Tony Lawson:
"Many people think mathematics is essential for economics to be a science. I don't think it's necessary." (Really Reorienting Modern Economics, YouTube)
Ed Leamer:
"Economists don't observe feathers in a vacuum. They observe feathers when the wind is blowing, when humidity varies, eagle feathers, duck feathers. Tons of things that will affect the result." (EconTalks: Ed Leamer on the State of Econometrics)
Daniel McFadden:
"A good way to do econometrics is to look for good natural experiments and use statistical methods that can tidy up the confounding factors that nature has not controlled for us." (Brainy Quotes)
Adam Ozimek:
"The stimulus act isn't something like the minimum wage. It's not a discrete policy where you turn the fiscal level up and it goes from 0 to a 1 to a 2 to a 3. The stimulus act was like a dozen different things and so to say that research hasn't told us whether the stimulus act was good or not or increased jobs, well I mean you could write a 100 page paper on just what was in it... but I do think that within the stimulus package there are things we can learn and have learned." (EconTalks: Adam Ozimek on the Power of Econometrics and Data, 2016)
Alvin Roth:
"Experimental economics is about conducting experiments: bringing economics into the laboratory or creating controlled conditions in the field that allow us to understand better what we are seeing in less controlled circumstances." (Brainy Quotes)
Paul Samuelson:
"I think that it's more important for an economist to be wise and sophisticated in scientific method than it is for a physicist because with controlled laboratory experiments possible, they practically guide you; you couldn't go astray. Whereas in economics, by dogma and misunderstanding, you can go very sadly astray." (Brainy Quote)
Noah Smith:
"The idea seems to be that economists mainly engage in a deductive enterprise, dispensing high theory from Olympian mounts of authority. This may have been an accurate stereotype at one point, but these days it bears little resemblance to reality: most economists are out combing through mountains of data, straining to glean facts about how the world really works. Economists study gender relations in the workplace, racial gaps, changes in labor contracts, early childhood education, minimum wage policy gaps, automation and the future of jobs and a vast array of other highly important, immediately relevant topics." (Econ Critics are Stuck in the Past, 2018)
Noah Smith:
"You can often exploit quirks of how policies happen or how the real process works to get clean identification." (Noah Smith of Whether Economics is a Science, 2015)
Noah Smith:
"The most important difference with natural experiments is you can't replicate them or repeat because each natural experiment happens only once." (Noah Smith of Whether Economics is a Science, 2015)
Noah Smith:
"If you're going to believe the results of an experiment you always have to make a leap of faith that all the reasonable stuff has been controlled for, right? That the experimenter has good controls and that's an assumption and a leap of faith you have to make in every science experiment." (Noah Smith of Whether Economics is a Science, 2015)
Noah Smith:
"I think the thing about the stimulus is... it's not at all clear. The stimulus was not an actual experiment at all." (Noah Smith of Whether Economics is a Science, 2015)
Noah Smith:
"There are some thunderbolt studies but what's much more common is an accumulated weight of studies that all have consistent results... So don't rely too much on these thunderbolt studies even though sometimes they do exist but they're pretty rare." (Noah Smith of Whether Economics is a Science, 2015)
Noah Smith:
"Macro is the glamour division of econ, but maybe more economists should avoid the glamour and get down in the muck where there are real conclusions to be had." (Econ critique scorecard, 2015)
Noah Smith:
"For centuries, even as chemists and physicists and biologists were constructing labs, 'economists' were still basically writing literary tomes full of speculation and hand-waving." (Is econ a science? On it's good days, yes. 2011)
Noah Smith:
"Quasi-experimental research becomes less reliable the further you move away from the conditions where the experiment happened -- and you don’t even know how fast the reliability vanishes." (Elegant Economic Theories Get Shoved Aside by Data, 2016)
Noah Smith:
"Empirical economists may get things wrong, but at least they come with evidence in hand." (How to Restore Faith in Economics, 2017)
Noah Smith:
"My guess is that econ will be dragged kicking and screaming into the empiricist fold, but will get there in the end." (Data vs. Theory in economics, 2015)
Noah Smith:
"The root problem here is that macroeconomics seems to have no commonly agreed-upon criteria for falsification of hypotheses." ('Science' without falsification is no science, 2012)
Richard Stone:
"The usefulness of observation and measurement in testing economic theories arises because the theorems of economics are supposed to relate to the actual world... Any economic theorem rigorously deduced from given postulates may be regarded as a hypothesis about the actual world which experience may show to be false." (1951, Role of Measurement in Economics)
Vernon Smith
"When the theory performs well you also think, 'Are there parallel results in naturally occurring field data?' You look for coherence across different data sets because theories are not specific to particular data sources. Such extensions are important because theories often make specific assumptions about information and institutions which can be controlled in the laboratory, but which may not accurately represent field data generating situations. Testing theories on the domain of their assumptions is sterile unless it is part of a research program concerned with extending the domain of applications of theory to field environments." (Brainy Quotes)
Robert Engel:
"I agree with a lot of the points in Taleb's book, but I don't agree with many of his conclusions. It seems to me that he rightly points out that risk managers miss a lot of the risks, but the conclusion is that he draws, is that we should abandon risk management, whereas my conclusion is we should improve it." (Brainy Quotes)
Andy Haldane:
"Cycles in money and bank credit are familiar from centuries past and yet for perhaps a generation, the symptoms of this old virus were left untreated... The symptoms should have been all too obvious from history." (What have the economists ever done for us? 2012)
Dani Rodrik:
Dani Rodrik:
Dani Rodrik:
"In sum, economists became overconfident in their preferred models of the moment: markets are efficient, financial innovation improves the risk-return trade-off, self-regulation works best, and government intervention is ineffective and harmful. They forgot about the other models." (Economics Rules, 2015)
Joseph Stiglitz:
"The fall of Wall Street is for market fundamentalism what the fall of the Berlin Wall was for communism." (Interview with the Huffington Post, 2008)
George Akerlof:
"You usually don't know such vacuums exist. But there's actually a signal that such a black hole does exist because there wasn't anything in the economics profession that was detailing what was going to happen when we got into the great recession." (AEA Publishing and Promotion in Economics, 2017)
"John Cochrane:
"Russ explains with great clarity, just how uncertain [economic] estimates are... Economic history teaches us humility: No economist in 1900 could have figured out what farmers, horse-shoers, ice deliverers, street-sweepers, and so forth would do when those jobs disappeared. The people involved did. Knowledge of our own ignorance is useful." (Russ Roberts on Economic Humility, 2017)
Milton Friedman:
"If we are to use effectively these abstract models and this descriptive material, we must have a comparable exploration of the criteria for determining what abstract model it is best to use for particular kinds of problems, what entities in the abstract model are to be identified with what observable entities, and what features of the problem or of the circumstances have the greatest effect on the accuracy of the predictions yielded by a particular model or theory." (The Methodology of Positive Economics, 1953)
Ragnar Frisch:
"The majority of the economic oscillations which we encounter seem to be explained most plausibly as free oscillations." (Propagation problems and impulse problems in dynamic economics, 1933)
David Glasner:
"In economics the simple predictions that can be accurately made is almost nil because economics is inherently a theory of complex social phenomena and simplifying the real world problems to which we apply the theory to allow testable prediction to be made is extremely difficult and hardly ever possible." (What is so Great about Science? How I Learned to Stop Worrying and Love Metaphysics, 2017)
Lars Peter Hansen:
"I believe that the recent financial crisis exposed gaps in our knowledge." (AEA Webcast. Publishing and Promotion in Economics, 2017)
Oliver Hart:
"I never think that economics provides the full answers to almost anything. This is one of the mistakes people make about economics and in this way they are often disappointed. They ask 'why can't the economists predict the great recession?' I think that's misunderstanding what economics is about. Economics is a helpful tool and there are many problems or questions where having economists give their views on what should be done is going to be extremely helpful. But it doesn't mean you only want to listen to them." (2016, Interview with Oliver Hart)
Robert Johnson:
"In 2009, Jeffrey Sachs said to me 'I feel ashamed to be an economist because I didn't know what a credit default swap was and it proved to be very important.'" (How the Economics of the Economics Profession Resists New Thinking, YouTube 2017)
Daniel Kahneman:
"Most of us view the world as more benign than it really is, our own attributes as more favorable than they truly are, and the goals we adopt as more achievable than they are likely to be. We also tend to exaggerate our ability to forecast the future, which fosters overconfidence. In terms of its consequences for decisions, the optimistic bias may well be the most significant cognitive bias. Because optimistic bias is both a blessing and a risk, you should be both happy and wary if you are temperamentally optimistic." (2001, Bias, Blindness and How We Truly Think)
John Maynard Keynes:
"This 'long run' is a misleading guide to current affairs. In the long run we are all dead. Economists set themselves too easy, too useless a task, if in tempestuous seasons they can only tell us, that when the storm is long past, the ocean is flat again." (A Tract on Monetary Reform, 1923)
Lawrence Klein:
"It is my firm belief that the only satisfactory test of economics is the ability to predict, and in crucial predictive situations such as reconversion after WWII, the settlement of the Korean War, the settlement of the Vietnam War, the abrupt economic policy switch of the Nixon administration in August 1972, the oil shock of 1973 (forecast of a world-wide succession by link), the recession in 1990. In these crucial periods, econometric models outperformed other approaches, yet there is considerable room for improvement, and that is precisely what is being examined in the development of high frequency models that aim to forecast the economy, every week, every fortnight, or every month, depending on the fitness of the information flow." (1980, Lawrence R. Klein Biographical)
Paul Krugman:
"Few economists saw our current crisis coming, but this predictive failure was the least of the field’s problems. More important was the profession’s blindness to the very possibility of catastrophic failures in a market economy." (How Did Economists Get It So Wrong? 2009)
Paul Krugman:
"If you want a simple model for predicting the unemployment rate in the United States over the next few years, here it is: it will be what Greenspan wants it to be, plus or minus a random error reflecting the fact that he is not quite God." (What should trade negotiators negotiate about? 1997)
Finn Kydland:
"I think the biggest challenge is the lack of predictability of government policies. It has different facets. The theory with which I’m associated with is called the inconsistency of optimal government policy, or the time inconsistency, I should say." (Brainy Quotes)
Tony Lawson:
"For most mathematical tools, a precondition for them being useful is that there are correlations. Correlations to be uncovered. Regularities for whenever X then Y." (Confronting Mathematical Models in Economics, YouTube 2014)
Alan Jay Levonovitz
"Unlike engineers and chemists, economists cannot point to concrete objects (cell phones and plastic) to justify their high valuation. They can't even point to the predictive power of their theories. They failed to predict the 2008 crisis." (The New Astrology, 2016)
Michael Lewis:
"In early 2004 another stock market investor, Michael Burry immersed himself for the first time in the bond market... He just sat alone in his office, in San Jose, California and read books and articles and financial filings. He wanted to know, especially how subprime mortgage bonds worked." (The Big Short, 2010)
Michael Lewis:
"He read dozens of prospectuses and scoured hundreds more, looking for the dodgiest pools of mortgages, and was still pretty certain even then (and dead certain later) that he was the only human being on earth who read them, apart from the lawyers who drafted them." (The Big Short, 2010)
Michael Lewis:
"He analyzed the relative importance of the loan-to-value ratios of the home loans, of second liens on the homes, of the location of the homes, of the absence of loan documentation and proof of income of the borrower, and a dozen or so other factors to determine the likelihood that a home loan made in America circa 2005 would go bad." (The Big Short, 2010)
Michael Lewis:
"Burry said, 'I was in a state of perpetual disbelief. I would have thought that someone would have recognized what was coming before June 2007. If it really took that June remit data to cause a sudden realization, well, it makes me wonder what a 'Wall Street analyst' really does all day.'" (The Big Short, 2010)
Dani Rodrik:
"That economists were mostly blind-sided by the crisis is undeniable. Many interpreted this as evidence of a fundamental breakdown in economics... But what makes this episode particularly curious is that there were, in fact, plenty of models to help explain what had been going on under the economy's hood. Bubbles (steady increases in asset prices divorced from their underlying value) are not a new phenomenon." (Economics Rules, 2015)
Paul Samuelson:
"Macroeconomics - even with all of our computers and with all of our information -- is not an exact science and is incapable of being an exact science. It can be better or it can be worse, but there isn't guaranteed predictability in these matters." (Interview with Paul Samuelson, 2007)
William Sharpe:
"From a more theoretical viewpoint, one can focus on the nexus between the present and the future. A financial instrument typically represents a property right to receive future cash flows. Such cash flows will, of course, come in the future – hence the economics of time must be understood. In many cases the flows are uncertain, hence the need for an approach to the economics of uncertainty. In addition, cash flows in the far future may depend on actions taken (or not taken) in the near future. This gives rise to the need for a theory of the economics of options (broadly construed). Finally, one needs information to estimate likely future outcomes, hence the requirement for an understanding of the economics of information. I define financial economics so that it embraces all four of these important, difficult, and fascinating aspects of economics." (1992, Lecture at Trinity University)
Robert Shiller:
"What is the world going to look like in 50 years? I'm worried. It should be a big concern to the profession of economics." (What are the challenges for the next generation? YouTube, 2014)
Jean Tirole:
"Failure to foresee or prevent the financial crisis is a sore reminder of hubris. True enough, we are to work on most of its ingredients but like a virus that keeps mutating, new dangers emerged when we thought we understood and avoided existing ones." (Nobel Banquet 2014 - Speech by Jean Tirole. YouTube)
Jean-Claude Trichet:
"Macro models failed to predict the crisis and seemed incapable of explaining what was happening to the economy in a convincing manner." (Reflections on the nature of monetary policy, non-standard measures and finance theory, 2010)
Kofi Annan:
"The international community... allows nearly 3 billion people - almost half of all humanity - to subsist on $2 or less a day in a world of unprecedented wealth." (Can Globalization Really Solve Our Problems? 2002)
Jimmy Carter:
"Human rights is the soul of our foreign policy, because human rights is the very soul of our sense of nationhood." (Remarks on the 30th anniversary of the Universal Declaration of Human Rights, 1978)
Max Friedman:
"Exclusion from economic gains, making individuals believe that elites are not sharing revenue, may also be another significant factor driving extremism." (Why Current Foreign Aid Benefits Terrorists, 2017)
Tessie San Martin:
"Without reliable data we have no way of understanding the magnitude of a problem or evaluating whether and how our programming is helping to address it." (Amen to accountability in foreign aid, 2017)
Mala Yousafzai:
"Why is it that countries which we call 'strong' are so powerful in creating wars but are so weak in bringing peace? Why is it that giving guns is so easy but giving books is so hard? Why is it that making tanks is so easy, but building schools is so hard?" (Nobel Peace Prize Lecture, 2014)
Robert Aumann:
"The theory of repeated games is able to account for phenomena such as altruism, cooperation, trust, loyalty, revenge, threats (self-destructive or otherwise) – phenomena that may at first seem irrational – in terms of the “selfish” utility-maximizing paradigm of game theory and neoclassical economics." (2005, War and Peace)
John Harasanyi:
"In principle, every social situation involves strategic interaction among the participants. Thus, one might argue that proper understanding of any social situation would require game-theoretic analysis. But in actual fact, classical economic theory did manage to sidestep the game-theoretic aspects of economic behavior by postulating perfect competition, i.e., by assuming that every buyer and every seller is very small as compared with the size of the relevant markets, so that nobody can significantly affect the existing market prices by his actions." (1997, Games with Incomplete Information)
John Forbes Nash:
"I can observe the game theory is applied very much in economics. Generally, it would be wise to get into the mathematics as much as seems reasonable because the economists who use more mathematics are somehow more respected than those who use less. That's the trend." (Brainy Quotes)
Reinhard Selten:
"Models of bounded rationality describe how a judgement or decision is reached (that is, the heuristic processes or proximal mechanisms) rather than merely the outcome of the decision, and they describe the class of environments in which these heuristics will succeed or fail." (2001, Bounded Rationality)
Kenneth Arrow:
"Leon Walras first formulated the state of the economic system at any point of time as the solution of a system of simultaneous equations representing the demand for goods by consumers, the supply of goods by producers and the equilibrium condition that supply equal demand on every market."
(Existence of an equilibrium for a competitive economy, 1954)
Kenneth Arrow:
"I then follow up with four major aspects of economic research in the last 60 years, the period of my scholarly activity. One, econometric methodology and practice, is of such fundamental importance that it cannot go unnoticed, although I played no role in it. With the other three, general equilibrium, dynamic processes, and uncertainty and information, I was more intimately involved." (2009, Some Developments in Economic Theory since 1940: An Eyewitness Account)
Kenneth Arrow:
"The evidence is clear that the development of general equilibrium theory would have gone on quite as it did without me." (November 1984 lecture at Trinity University)
Gerard Debreu:
"I had become interested in economics, an interest that was transformed into a lifetime dedication when I met with the mathematical theory of general economic equilibrium." (1983, The Nobel Prizes)
Ragnar Frisch:
"An important object of the Journal should be the publication of papers dealing with attempts at statistical verification of the laws of economic theory, and further the publication of papers dealing with the purely abstract problems of quantitative economics, such as problems in the quantitative definition of the fundamental concepts of economics and problems in the theory of economic equilibrium. The term equilibrium theory is here interpreted as including both the classical equilibrium theory proceeding on the lines of Walras, Pareto, and Marshall, and the more general equilibrium theory which is now beginning to grow out of the classical equilibrium theory, partly through the influence of the modern study of economic statistics." (A Dynamic Approach to Economic Theory, 1927)
Thomas Robert Malthus:
"When Hume and Adam Smith prophesied that a little increase of national debt beyond the then amount of it, would probably occasion bankruptcy; the main cause of their error was the natural one, of not being able to see the vast increase of productive power to which the nation would subsequently obtain." (An Essay on the Principle of Population 2nd Edition, 1836)
Adam Smith:
"When national debts have once been accumulated to a certain degree, there is scarce, I believe, a single instance of their having been fairly and completely paid. The liberation of the public revenue, if it has ever been brought about at all, has always been brought about by bankruptcy; sometimes by an avowed one, but always by a real one, though frequently by a pretend payment." (The Wealth of Nations, 1776)
William Vickrey:
"In such a context, it should be clear that balancing a nominal budget will solve nothing, and attempting to achieve such a spurious balance will produce much mischief." (2004, Full Employment and Price Stability)
American Medical Student Association:
"If Americans believe in an inalienable right to life, how can we tolerate a system that denies people life-saving medications and treatments?" (The Case for Universal Healthcare, 2009)
Commonwealth Fund:
"Despite having the most expensive health care system, the United States ranks last overall among 11 industrialized countries on measures of health system quality, efficiency, access to care, equity, and healthy lives...'" (US Health System Ranks Last Among Eleven Countries, 2014)
Robert Frank:
"The most important source of cost savings under single-payer is that large government entities are able to negotiate much more favorable terms with service providers." (Why Single-Payer Health Care Saves Money, 2017)
Bernie Sanders:
"The United States must join the rest of the industrialized world and guarantee health care to every man, woman and child through a Medicare for all single-payer system." (Our Revolution, 2016)
Bernie Sanders:
"The United States has thousands of different health insurance plans, all of which set different reimbursement rates across different networks for providers and procedures. This results in extremely high administrative costs." (Our Revolution, 2016)
William Ashley:
"The historical method tries to free their minds at the outset of all priori theories and to see how they actually have been..." (An Introduction to English Economic History, 1888)
Tyler Cowen:
"Overall I find that history and theory laden observation tend to be the forms of evidence which have convinced me the most." (Can economics change your mind, 2016)
Howard Davies
"We all have good reason to be grateful that Ben Bernanke is an expert on the Great Depression..." (Economics in Denial, 2012)
Friedrich Engels:
"The conditions under which men produce and exchange vary from country to country and within each country again from generation to generation. Political economy therefore cannot be the same for all centuries and for all historical epochs." (Anti-Duhring, 1877)
Stanley Fischer:
"I think I've learned as much from studying the history of central banking as I have from knowing the theory of central banking and I advise all of you who want to be central bankers to read the history books." (Humanitas: Stanley Fischer at the University of Oxford Lecture, YouTube 2012)
Robert Fogel:
"Economic history has contributed significantly to the formulation of economic theory. Among the economists who have found history an important source for their ideas are Smith, Malthus, Marx, Marshall, Keynes, Hicks, Arrow, Friedman, Solow, and Becker. Failure to take account of history, as Simon Kuznets (1941) stressed, has often led to a misunderstanding of current economic problems by investigators who have not realized that their generalizations rested upon transient circumstances. Nowhere is the need to recognize the role of long-run dynamics more relevant than in such pressing current issues as medical care, pension policies, and development policies." (1993, Economic Growth, Population Theory, and Physiology)
Paul Krugman:
"But the honest truth is that what drives me as an economist is that economics is fun. I think I understand why so many people think that economics is a boring subject, but they are wrong. On the contrary, there is hardly anything I know that is as exciting as finding that the great events that move history, the forces that determine the destiny of empires and the fate of kings, can sometimes be explained, predicted, or even controlled by a few symbols on a printed page. We all want power, we all want success, but the ultimate reward is the simple joy of understanding." (1995, Incidents from my Career)
Paul Samuelson:
"This is probably a change from what I would have said when I was younger: Have a very healthy respect for the study of economic history, because that's the raw material out of which any of your conjectures or testings will come." (Interview with Paul Samuelson, 2007)
Paul Samuelson:
"My philosophy of scientific method is that it is the empirical reality of history is all important. What we say in the classroom is second." (UBS: Is Economics a Real Science?)
George Akerlof:
"There's almost a total disconnect between sociology and economics. But are they always wrong and we always right? Isn't it some combination of the two more likely to be correct and also relevant for the types of situations we as economists tend to look at?" (AEA Publishing and Promotion in Economics, 2017)
Tony Lawson
"In the social realm, all of its components are internally related to everything else." (Confronting Mathematical Models in Economics, YouTube 2014)
Tony Lawson:
"Underneath and grounding our social practices are social structures. For example social rules. This isn't new, but the claim I want to make is these rules are out of phase with our practices." (Confronting Mathematical Models in Economics, YouTube 2014)
Gary Saul Morson, Morton Shapiro
"Economic models (whether mainstream, behavioral or neuro) typically leave out culture because culture cannot be quantified specified in a lab experiment or discovered in neurons." (Cents and Sensibility, 2017)
Paul Samuelson:
"I can claim that in talking about modern economics I am talking about me. My finger has been in every pie. I once claimed to be the last generalist in economics, writing about and teaching such diverse subjects as international trade and econometrics, economic theory and business cycles, demography and labor economics, finance and monopolistic competition, history of doctrines and locational economics." (Lives of laureates, 1985)
Robert Skidelsky:
"Most economics students are not required to study psychology, philosophy, history or politics... They are never given the mental tools to grasp the whole picture." (Economists versus the Economy, 2016)
Simone Campbell:
"Hard-working people are trying their best, but those who hold on to capital are not sharing the wealth, and there is the problem." (Interviewed by Al Sharpton on Media Matters for America, 2014)
Hillary Clinton:
"Look at the budget that was just proposed in Washington. It is an attack of unimaginable cruelty on the most vulnerable among us, the youngest, the oldest, the poorest, and hard working people who need a little help to gain or hang on to a decent middle class life." (Wellesley commencement speech, 2017)
Barack Obama:
"We don't just want everyone to share in America's success, we want everyone to contribute to our success." (State of the Union Address, 2015)
Barack Obama:
"In a global economy, a country's greatest resource is its people. So by investing in you, this nation can open the door for far more prosperity - because unlocking a nation's potential depends on empowering all its people, especially it's young people." (Yangon University Speech, 2012)
Bernie Sanders:
"[A nation] is judged by how well it treats its weakest a most vulnerable citizens. A truly great nation is one that is filled with compassion and solidarity." (Our Revolution, 2016)
Bernie Sanders:
"In 1979, the top one-tenth of 1 percent owned about 7 percent of the wealth in this country. Now it owns 22 percent." (Our Revolution, 2016)
Thomas Robert Malthus:
"The employment of the poor in roads and public works, and a tendency among landlords and persons of property to build, to improve and beautify their grounds, and to employ workmen and menial servants, are the means most within our power and most directly calculated to remedy the evils arising from that disturbance in the balance of produce and consumption." (An Essay on the Principle of Population 2nd Edition, 1836)
Adam Smith:
"Good roads, canals, and navigable rivers, by diminishing the expense of carriage, put the remote parts of the country more nearly upon a level with those of the neighbourhood of the town. They are upon that the greatest of all improvements." (The Wealth of Nations, 1776)
Karl Marx:
"The product of mental labor - science - always stands far below its value, because the labor-time necessary to reproduce it has no relation at all to the labor-time required for its original production." (Relative and Absolute Surplus Value, 1861)
Simon Kuznets:
"We need far more empirical study than we have had so far of the universe of inventors; any finding concerning inventors... would be of great value... for public policy in regard to inventive activity." (1962, Understanding the Creativity of Scientists and Entrepreneurs)
Anma Silim:
"The lack of narrative around innovation is one of conventional economic theory's greatest flaws." (What is New Economic Thinking? 2012)
Bertil Ohlin:
"International trade theory has, in my opinion, given far too much attention to the effects of certain variations, for example, in duties, on the national incomes, and too little to the effects on individual incomes. In many cases, changes in the sums count for very little, while changes in the individual incomes are distinctly relevant." (2000, Ohlin versus Stolper-Samuelson)
David Ricardo:
"Under a system of perfectly free commerce, each country naturally devotes its capital and labour to such employments as are most beneficial to each. This pursuit of individual advantage is admirably connected with the with the universal good of the whole. By stimulating industry, by rewarding ingenuity, and by using most efficaciously the peculiar powers bestowed by nature, it distributes labour most effectively and most economically: while, by increasing the general mass of productions, it diffuses general benefit, and binds together, by one common tie of interest and intercourse, the universal society of nations throughout the civilized world." (Principles of Political Economy and Taxation, 1817)
Adam Smith:
"The commodities of Europe were almost all new to America, and many of those of America were new to Europe. A new set of exchanges, therefore, began.. and which should naturally have proved as advantageous to the new, as it certainly did to the old continent." (The Wealth of Nations, 1776)
Unlearning Economics:
"In the realm of international trade, economists have been all too inclined to support trade deals - often quite vociferously on the basis of simple ideas like comparative advantage while ignoring the actual details of the trade details." (No, Criticizing Economics is not Regressive, 2017)
Eugene Fama
"The empirical successes of the three-factor model suggest that it is an equilibrium pricing model, a three-factor version of Merton’s intertemporal CAPM or Ross’s arbitrage pricing theory. In this view, SMB and HML mimic combinations of two underlying risk factors or state variables of special hedging concern to investors." (1993, Common risk factors in the returns on stocks and bonds)
Michael Lewis:
"Burry said, 'I have always believed that a single talented analyst, working very hard, can cover an amazing amount of investment landscape, and this belief remains unchallenged in my mind.'" (The Big Short, 2010)
Adam Smith:
"By preferring the support of domestic to that of foreign industry, he intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention." (The Wealth of Nations, 1776)
Adam Smith:
"Every individual is continually exerting himself to find out the most advantageous employment for whatever capital he can command. It is his own advantage, indeed, and not that of the society, which he has in his view. But the study of his own advantage naturally, or rather necessarily leads him to prefer that employment which is most advantageous to the society." (The Wealth of Nations, 1776)
Adam Smith:
"It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest. We address ourselves, not to their humanity, but to their self-love, and never talk to them of our own necessities, but of their advantages." (The Wealth of Nations, 1776)
Joseph Stiglitz:
"The standard neoclassical model the formal articulation of Adam Smith's invisible hand, the contention that market economies will ensure economic efficiency provides little guidance for the choice of economic systems, since once information imperfections (and the fact that markets are incomplete) are brought into the analysis, as surely they must be, there is no presumption that markets are efficient." (Whither Socialism? 1994)
Joseph Stiglitz:
"The reason that the invisible hand often seems invisible is that it is often not there." (Interview with the International Herald Tribune, 2006)
Roger Backhouse, Bradley Bateman:
"Government doesn't cut an abstract entity called 'government spending'. It cuts veterans benefits, homeland security and Medicare/Medicaid." (Wanted Worldly Philosophers, New York Times 2011)
Ragnar Frisch:
"We may perhaps start by throwing all kinds of production into one variable, all consumption into another, and so on, imagining that the notions 'production', 'consumption', and so on, can be measured by some sort of total indices. At present certain examples of micro-dynamic analyses have been worked out, but as far as I know no determinate macro-dynamic analysis is yet to be found in the literature." (Propagation problems and impulse problems in dynamic economics, 1933)
John Kenneth Galbraith:
"I have long felt that there's no economic proposition that can't be stated in clear, accessible language." (Booknotes Interview, 1994)
Alfred Marshall:
"There has always been a temptation to classify economic goods in clearly defined groups, about which a number of short and sharp propositions could be made, to gratify at once the student's desire for logical precision, and the popular liking for dogmas that have the air of being profound and are yet easily handled. But great mischief seems to have been done by yielding to this temptation, and drawing broad artificial lines of division where Nature has made none." (Principles of Economics, 1890)
Alfred Marshall:
"Great mischief seems to have been done by... drawing broad artificial lines of division where nature has made none." (Principles of Economics, 1890)
Noah Smith:
"The modern economics profession made a collective decision, long ago, to develop a system of jargon in which words have multiple, sometimes contradictory meanings. Unfortunately, the general public’s reaction tends to be similar to that of poor Alice [in wonderland] ... So econ vocabulary is, to put it bluntly, a dumpster fire." (Economics Builds a Tower of Babel, 2016)
Thorstein Veblen:
"In itself and in its consequences the life of leisure is beautiful and ennobling in all civilised men's eyes." (The Theory of the Leisure Class, 1899)
Thorstein Veblen:
"In the modern industrial communities... the apparatus of living has grown so elaborate and cumbrous..." (The Theory of the Leisure Class, 1899)
Thorstein Veblen:
"As increased industrial efficiency makes it possible to procure the means of livelihood with less labor, the energies of the industrious members of the community are bent to the compassing of a higher result in conspicuous expenditure, rather than slackened to a more comfortable pace." (The Theory of the Leisure Class, 1899)
Milton Friedman:
"The problem in this world is to avoid concentration of power - we must have a dispersion of power." (YouTube: Big Business, Big Government)
Milton Friedman:
"I say thank God for government waste. If government is doing bad things, it's only the waste that prevents the harm from being greater." (Interview with Richard Heffner on The Open Mind , 1975)
Milton Friedman:
"Governments never learn. Only people learn." (The Cynic's Lexicon : A Dictionary Of Amoral Advice, 1984)
Milton Friedman:
"Society doesn't have values. People have values." (Free to Choose television series, 1980)
George Akerlof:
"Prior to the early 1960s, economic theorists rarely constructed models customized to capture unique institutions or specific market characteristics." (Brainy Quotes)
Maurice Allais:
"Any author who uses mathematics should always express in ordinary language the meaning of the assumptions he admits, as well as the significance of the results obtained. The more abstract his theory, the more imperative this obligation. In fact, mathematics are and can only be a tool to explore reality. In this exploration, mathematics do not constitute an end in itself, they are and can only be a means." (1997, La formation scientifique, Une communication du Prix Nobel d’économie, Maurice Allais)
Mark Blaug:
"Economists have converted the subject into a sort of social mathematics in which analytical rigor is everything and practical relevance is nothing." (Quoted in Economists Dissing Economics. Unlearning Economics)
Milton Friedman:
"Economics has become increasingly an arcane branch of mathematics rather than dealing with real economic problems." (Quoted in Economists Dissing Economics. Unlearning Economics)
Ragnar Frisch:
"I believe that economic theory has arrived at a point in its development where the appeal to quantitative empirical data has become more necessary than ever. At the same time its analyses have reached a degree of complexity that require the application of a more refined scientific method than that employed by the classical economists." (Quoted in Ragnar Frisch 1895-1995 by O. Bjerkholt)
John Kenneth Galbraith:
"The decisive weakness in neoclassical and neo-Keynesian economics is not the error in the assumptions by which it elides the problem of power. The capacity for erroneous belief is very great, especially where it coincides with convenience. Rather, in eliding power — in making economics a nonpolitical subject — neoclassical theory destroys its relation to the real world. In that world, power is decisive in what happens. And the problems of that world are increasing both in number and in the depth of their social affliction. In consequence, neoclassical and neo-Keynesian economics is relegating its players to the social sidelines where they either call no plays or use the wrong ones. To change the metaphor, they manipulate levers to which no machinery is attached." (Power and the Useful Economist, 1973)
Lars Peter Hansen
"I view the work I've done related to statistics and economics as roughly speaking, how to do something without having to do everything. So economic models - how any model by definition isn't right. When someone just says, 'Oh, your model is wrong.' That's not much of an insight. What you want to know is, is it wrong in important ways or wrong in ways that are less relevant? And you want to know what does the data really say about the model?" (2013, Lars Peter Hansen on imperfect models)
James Heckman:
"Calibrated models are models looking at some stylized facts that are putting together different pieces of data that are not mutually consistent. I mean literally you take estimates of this area, and estimates from that area and you assemble something that's like a Frankenstein..." (EconTalks: James Heckman on Facts, Evidence and the State of Econometrics, 2016)
Bengt Holmstrom:
"Models are sort of like conversation partners. You’re asking questions of the models and the models answer." (2013, Open Markets Evan Peterson)
William Stanley Jevons:
"It is clear that economics, if it is to be a science at all, must be a mathematical science." (The Theory of Political Economy, 1871)
William Stanley Jevons:
"You will perceive that economy, scientifically speaking, is a very contracted science; it is in fact a sort of vague mathematics which calculates the causes and effects of man's industry, and shows how it may be best applied." (Letter to Henrietta Jevons, 1858)
William Stanley Jevons:
"In this work I have attempted to treat economy as a calculus of pleasure and pain, and have sketched out, almost irrespective of previous opinions, the form which the science, as it seems to me, must ultimately take." (The Theory of Political Economy, 1871)
William Stanley Jevons:
"Pleasure and pain are undoubtedly the ultimate objects of the calculus of economics. To satisfy our wants to the utmost with the least effort - to procure the greatest amount of what is desirable at the expense of the least that is undesirable - in other words, to maximize pleasure, is the problem of economics." (The Theory of Political Economy, 1871)
Leonid Kantorovich:
"In our time mathematics has penetrated into economics so solidly, widely and variously and the chosen theme is connected with such a variety of facts and problems that it brings us to cite the words of Kozma Prutkrov which are very popular in our country: 'one can not embrace the unembraceable.'" (1975, Lecture in memory of Alfred Nobel)
John Maynard Keynes:
"Too large a proportion of recent mathematical economics is mere concoctions, as imprecise as the initial assumptions they rest on, which allow the author to lose sight of the complexities and interdependencies of the real world in a maze of pretentious and unhelpful symbols." (Quoted in Economists Dissing Economics, Unlearning Economics)
Tjalling Koopmans:
"We looked upon economic theory as a sequence of conceptual models that seek to express in simplified form different aspects of an always more complicated reality." (Three Essays, 1957)
Paul Krugman:
"As I see it, the economics profession went astray because economists, as a group, mistook beauty, clad in impressive-looking mathematics, for truth." (How Did Economists Get It So Wrong? 2009)
Paul Krugman:
"I do not mean to say that formal economic analysis is worthless, and that anybody's opinion on economic matters is as good as anyone else's. On the contrary! I am a strong believer in the importance of models, which are to our minds what spear-throwers were to stone age arms: they greatly extend the power and range of our insight." (How I Work, 1993)
Paul Krugman:
"The strategy is: always try to express your ideas in the simplest possible model. The act of stripping down to this minimalist model will force you to get to the essence of what you are trying to say (and will also make obvious to you those situations in which you actually have nothing to say). And this minimalist model will then be easy to explain to other economists as well." (How I Work, 1993)
Paul Krugman:
"Many of the stories economists tell take the form of models—for whatever else they are, economic models are stories about how the world works." (Economics 4th edition, 2015)
Paul Krugman:
"Here, then, is a revised version of Marshall's rules: (1) Figure out what you think about an issue, working back and forth among verbal intuition, evidence, and as much math as you need. (2) Stay with it till you are done. (3) Publish the intuition, the math, and the evidence - all three - in an economics journal. (4) But also try to find a way of expressing the idea without the formal apparatus. (5) If you can, publish that where it can do the world some good." (Two Cheers for Formalism, 1998)
Tony Lawson:
"Notice that this does not amount to a rejection of all mathematical-deductive modelling. But it is a rejection of the insistence that we all always and everywhere use it."
(The Nature and State of Modern Economics, 2015)
Tony Lawson:
"Even if the ontology I defend is roughly right, there may yet be pockets of social reality that provide the appropriate conditions for successes when utilizing methods of formalistic modeling, as I regularly acknowledge." (The Nature and State of Modern Economics, 2015)
Tony Lawson:
"I don't want to oppose mathematics in economics. It's the emphasis that mathematics is the proper way to do economics is what I'm critical of." (Really Reorienting Modern Economics, YouTube 2010)
Tony Lawson:
"Mathematics is a tool just like any other. The mathematical deductive systems that economists use are tools and they have conditions under which they are appropriate." (Really Reorienting Modern Economics, YouTube 2010)
Tony Lawson:
"In economics faculties, probably more than 90% of what is taught focuses or employs some form of mathematical modeling." (Confronting Mathematical Models in Economics, YouTube 2014)
Tony Lawson:
"If it's the case you see forms of human behavior that seem to conform, then by all accounts model it mathematically." (What's Wrong with Modern Economics? YouTube 2015)
Tony Lawson;
"When do we get systems of isolated systems in the social realm? Well, people get pretty atomistic when they're in traffic jams. That kind of behavior can probably be modeled mathematically." (Confronting Mathematical Models in Economics, YouTube 2014)
Tony Lawson:
"The use of mathematics to do social analysis is a bit like using a hammer to cut the grass." (What's Wrong with Modern Economics? YouTube 2015)
Robert Lucas:
"Like so many others in my cohort, I internalized its view that if I couldn't formulate a problem in economic theory mathematically, I didn't know what I was doing. I came to the position that mathematical analysis is not one of many ways of doing economic theory. It is the only way. Economic theory is mathematical analysis. Everything else is just picture and talk." (2001, memoir)
Thomas Robert Malthus:
"It has been said, and perhaps with truth, that the conclusions of Political Economy partake more of the certainty of the stricter sciences than those of most of the other branches of human knowledge." (An Essay on the Principle of Population 2nd Edition, 1836)
Alfred Marshall:
"I had a growing feeling in the later years of my work at the subject that a good mathematical theorem dealing with economic hypothesis was very well unlikely to be good economics and I went more and more on the rules - 1. Use mathematics as shorthand language, rather than as an engine of inquiry. 2. Keep to them till you have done. 3. Translate into English. 4. Then illustrate by examples that are important in real life. 5. Burn the mathematics. 6. If you can't succeed in 4, burn 3. This last I do often," (Letter to A. L. Bowley, 1960)
Alfred Marshall:
"The laws of economics are to be compared with the laws of the tides, rather than with the simple and exact law of gravitation. For the actions of men are so variable and uncertain, that the best statement of tendencies, which we can make in a science of human conduct, must needs be inexact and faculty." (Principles of Economics, 1890)
Eric Maskin:
"It’s true that my initial training was in mathematics. However, almost by accident, I happened to take a course from Kenneth Arrow on 'Information Economics' which was so inspiring that I decided to change direction. It seemed to me that economics combined the best of both worlds: the rigor of mathematics with the immediate relevance of a social science. As for how much math I would recommend, I’d say that basic analysis, including measure theory, is certainly very useful. Also, linear algebra and stochastic processes always helps. But beyond that, I don’t think a huge mathematical investment is necessary to do economic theory unless you are planning to work in an extremely technical area." (2013, Interview with Eric S. Maskin: Questions by TSE Students)
Robert Merton:
"The special sphere of finance within economics is the study of allocation and deployment of economic resources, both spatially and across time, in an uncertain environment. To capture the influence and interaction of time and uncertainty effectively requires sophisticated mathematical and computational tools." (Brainy Quotes)
Ludwig von Mises:
"The study of economics has been again and again led astray by the vain idea that economics must proceed according to the pattern of other sciences." (Quoted in Economists Dissing Economics, Unlearning Economics)
Oscar Morgenstern:
"As far as the use of mathematics in economics is concerned, there is an abundance of formulas where such are not needed. The are frequently introduced, one fears, in order to show off. The more difficult the mathematical theorem, the more esoteric the name of the mathematician quotes, the better." (Limits of the Use of Mathematics in Economics, 1963)
Oskar Morgenstern:
"All economic decisions, whether private or business, as well as those involving economic policy, have the characteristic that quantitative and non-quantitative information must be combined into one act of decision. It would be desirable to understand how these two classes of information can best be combined." (Quoted in industrial Planning in France by John McArthur and Bruce Scott)
Oskar Morgenstern:
"...the facts of economic life cannot be comprehensively described in terms of statistics." (Limits of the Use of Mathematics in Economics, 1963
Roger Myerson:
"You have to learn the methods, statistical, theoretical, analytical methods of economics and how can you very, very carefully use those methods to shed a little bit more light on these important questions you feel strongly about... If you do great work in economics it will be because you are using good analytical methodology where you learned the mathematical techniques of the field very, very carefully, you will offer a little bit more clearer way of seeing that offers some clarity, some additional perspective on some much bigger question." (Brainy Quotes)
Gunnar Myrdal:
"The further away a scholarly opinion is from direct observation and the more abstract and ‘theoretical’ it is, the more defenseless it becomes against insidious opportunist errors of judgment. In economics, model thinking in particular creates scope for systematic biases... But of course all social studies must nevertheless aim at generalization. It is thus important to be able to think concretely at the same time, as I learnt from Gustav Cassel." (1982, Role of the economist in public debate)
Edward Prescott
"Economists create their own worlds. We're like little gods with our artificial economics, wanting to see what happens." (Brainy Quotes)
Dani Rodrik:
Dani Rodrik:
Dani Rodrik:
Francois Quesnay:
"Calculations are to the economic science what bones are to the human body. Without them it will always be a vague and confused science, at the mercy of error and prejudice." (Letter to Victor Riquetti Mirabeau)
Paul Samuelson:
"To a person of analytical ability, perceptive enough to realize that mathematical equipment was a powerful sword in economics, the world of economics was his or her oyster in 1935. The terrain was strewn with beautiful theorems and begging to be picked up and arranged in unified order." (Brainy Quote)
Paul Samuelson:
"You know the expression in real estate, 'location, location, location'. In prediction it's, 'timing, timing, timing'. Going into present day economics it's, 'math, math, math'. (YouTube: Infinite History Project MIT)
Paul Samuelson:
"Mathematics is just the catalyst that enables you to handle multivariate things." (YouTube: Infinite History Project MIT)
Paul Samuelson:
"You know the expression in real estate, 'location, location, location'. In prediction it's, 'timing, timing, timing'. Going into present day economics it's, 'math, math, math'. (YouTube: Infinite History Project MIT)
Paul Samuelson:
"When Saint Peter admits me into heaven, he's going to ask 'Why did you help make economics so mathematical?' My answer will be, 'Well I couldn't help it.' (YouTube: Infinite History Project MIT)
Paul Samuelson:
"Indeed, until the appearance of the mathematical models there of there is reason to believe that Keynes himself did not truly understand his analysis." (Knowledge and Wealth of Nations by David Warsh)
Jean-Baptiste Say:
"It is, perhaps, a well founded objection to Mr. Ricardo, that he sometimes reasons upon abstract principles to which he gives too great a generalization." (A Treatise on Political Economy, 1832)
Theodore Schultz:
"Human beings are incontestably capital from an abstract and mathematical point of view." (1961, Investment in Human Capital)
Myron Scholes
"All models have faults - that doesn't mean you can't use them as tools for making decisions." (Brainy Quotes)
Lloyd Shapley:
"I'm a mathematician and always have been, as far as I can remember. I don't remember when I first got involved with mathematics, but I think of myself always as a mathematician first." (Brainy Quotes)
Adam Smith:
"I have no great faith in political arithmetic, and I mean not to warrant the exactness of either of these computations." (The Wealth of Nations, 1776)
Noah Smith:
"The problem with Reed's critique, like so many of the others listed above, is that it leaves out much of the story. Auction theory, random-utility models, matching theory, gravity-trade models, and some other mathematical theories have enjoyed enormous quantitative predictive success, sometimes using the neoclassical assumptions of utility maximization and rational action that Reed derides." (Econ Critics are Stuck in the Past, 2018)
Noah Smith:
"[DSGE models] contain so many unrealistic assumptions that they probably have little chance of capturing reality. Their forecasting performance is abysmal... Any rigorous statistical tests tend to reject these models instantly." (Economics Struggles to Cope with Reality, 2016)
Noah Smith:
"Soon, we may even see people insisting in seminars that DSGE models only use assumptions that have been rigorously tested on high-quality micro data! That dream is still far off, but it seems to be getting closer." (Astrologers and macroeconomists, 2016)
Noah Smith:
"As far as I'm aware, private-sector firms don't hire anyone to make DSGE models, implement DSGE models, or even scan the DSGE literature. There are a lot of firms that make macro bets in the finance industry - investment banks, macro hedge funds, bond funds. To my knowledge, none of these firms spends one thin dime on DSGE." (The most damning critique of DSGE, 2014)
Jean-Baptiste Say:
"Some writers maintain arithmetic to be only the only sure guide in political economy; for my part, I see so many detestable systems built upon arithmetical statements, that I am rather inclined to regard that science as the instrument of national calamity." (A Treatise On Political Economy 4th edition, 1832)
Jean-Baptiste Say:
"It is, perhaps, a well founded objection to Mr. Ricardo, that he sometimes reasons upon abstract principles to which he gives too great a generalization." (A Treatise On Political Economy 4th edition, 1832)
Robert Solow:
"Suppose someone sits down where you are sitting right now and announces to me that he is Napoleon Bonaparte. The last thing I want to do with him is to get involved in a technical discussion of cavalry tactics at the Battle of Austerlitz. If I do that, I'm getting tacitly drawn into the game that he is Napoleon Bonaparte. Now, Bob Lucas and Tom Sargent like nothing better than to get drawn into technical discussions, because then you have tacitly gone along with their fundamental assumptions; your attention is attracted away from the basic weakness of the whole story. Since I find that fundamental framework ludicrous, I respond by treating it as ludicrous – that is, by laughing at it – so as not to fall into the trap of taking it seriously and passing on to matters of technique." (1983, Conversations with Economists)
Jan Tinbergen:
"First of all I want to remind you of the essential features of models. In my opinion they are: (i) drawing up a list of the variables to be considered; (ii) drawing up a list of the equations or relations the variables have to obey and (iii) testing the validity of the equations, which implies the estimation of their coefficients, if any. As a consequence of especially (iii) we may have to revise (i) and (ii) so as to arrive at a satisfactory degree of realism of the theory embodied in the model." (The Use of the Models." (The Use of Models: Experience, 1969)
Leonid Hurwicz
"Traditionally, economic analysis treats the economic system as one of the givens. The term "design" in the title is meant to stress that the structure of the economic system is to be regarded as an unknown. An unknown in what problem? Typically that of finding a system that would be, in a sense to be specified, superior to the existing one. The idea of searching for a better system is at least as ancient as Plato’s Republic, but it is only recently that tools have become available for a systematic, analytical approach to such search procedures. This new approach refuses to accept the institutional status quo of a particular time and place as the only legitimate object of interest and yet recognizes constraints that disqualify naive Utopias." (1973, The designs of mechanisms for resource allocations)
Thomas Schelling:
"What this book is about is a kind of analysis that is characteristic of a large part of the social sciences, especially the more theoretical part. That kind of analysis explores the relation between the behavior of individuals who compromise some social aggregate, and the characteristics of the aggregate. These situations, in which people's behavior or people's choices depend on the behavior or choices of other people, are the ones that usually don't permit any simple summation or extrapolation of the aggregates. To make that connection we usually have to look at the system of interaction between individuals and their environment, that is, between individuals and other individuals or between individuals and the collectivity." (1978, Micromotives and Microbehavior)
Karl Marx:
"Money does not arise by convention, any more than the state does. It arises out of exchange, and arises naturally out of exchange; it is a product of the same." (Grundrisse, 1857)
Karl Marx:
"The circulation of commodities is the original precondition of the circulation of money." (Grundrisse, 1857)
Jean-Baptiste Say:
"I have made no distinction between the circulation of goods and of money, because there really is none." (A Treatise On Political Economy 4th edition, 1832)
Robert Mundell:
"I have never believed that central banks should have rigid inflation targeting. That is not a good thing to stabilize. There is nothing in economic theory to back this." (Brainy Quotes)
Milton Friedman:
"Inflation is always and everywhere a monetary phenomenon in the sense that it is and can be produced only by a more rapid increase in the quantity of money than in output." (The Counter-Revolution in Monetary Theory, 1970)
Milton Friedman:
"I know of no severe depression, in any country or any time, that was not accompanied by a sharp decline in the stock of money and equally of no sharp decline in the stock of money that was not accompanied by a severe depression." (Money Masters, 1995)
Milton Friedman:
"The Federal Reserve definitely caused the Great Depression by contracting the amount of money in circulation by one-third from 1929 to 1933." (National Public Radio Interview, 1995)
Milton Friedman:
"The use of quantity of money as a target has not been a success. I'm not sure that I would as of today push it as hard as I once did." (Quoted in the Financial Times, 2003)
Milton Friedman:
"Over short periods, the relation between growth in money and growth in nominal income is often hard to see." (Money Mischief, 1992)
James Meade:
"My interest in economics had the following roots. Like many of my generation I considered the heavy unemployment in the United Kingdom in the inter-war period as both stupid and wicked. Moreover, I knew the cure for this evil, because I had become a disciple of the monetary crank, Major C.H. Douglas, to whose works I had been introduced by a much loved but somewhat eccentric maiden aunt. But my shift to the serious study of economics gradually weakened my belief in C.H. Douglas's A+B theorem, which was replaced in my thought by the expression MV = PT." (2003, James E. Meade - Biographical)
Henry George:
"When land is all monopolized, as it is everywhere except in the newest communities, rent must drive wages down to the point at which the poorest paid class will he just able to live and reproduce, and thus wages are forced to a minimum fixed by what is called the standard of comfort."
Adam Smith:
"People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices. It is impossible indeed to prevent such meetings, by any law which either could be executed, or would be consistent with liberty or justice. But though the law cannot hinder people of the same trade from sometimes assembling together, it ought to do nothing to facilitate such assemblies; much less to render them necessary." (The Wealth of Nations, 1776)
Adam Smith:
"To give the monopoly of the home-market to the produce of domestic industry, in any particular art or manufacture, is in some measure to direct private people in what manner they ought to employ their capitals, and must, in almost all cases, be either a useless or a hurtful regulation." (The Wealth of Nations, 1776)
Adam Smith:
"Monopoly of one kind or another, indeed, seems to be the sole engine of the mercantile system." (The Wealth of Nations, 1776)
Friedrich Hayek:
"I must confess that if I had been consulted whether to establish a Nobel Prize in economics, I should have decidedly advised against it... The Nobel Prize confers on an individual an authority which in economics no man ought to possess." (Nobel Banquet Speech, 1974)
Noah Smith:
"In econ, though, un-validated theories - even empirically unsuccessful theories - do sometimes get Nobel prizes, especially in macro." (Economists don't have 'physics envy', 2015)
Angus Deaton
"Economists focus on income, public health scholars focus on mortality and morbidity, and demographers focus on births, deaths, and the size of populations. All of these factors contribute to wellbeing, but none of them is wellbeing." (2013, The Great Escape)
Friedrich Hayek:
"I have arrived at the conviction that the neglect by economists to discuss seriously what is really the crucial problem of our time is due to a certain timidity about soiling their hands by going from purely scientific questions into value questions. This is a belief deliberately maintained by the other side because if they admitted that the issue is not a scientific question, they would have to admit that their science is antiquated and that, in academic circles, it occupies the position of astrology and not one that has any justification for serious consideration in scientific discussion." (1978, Conversation at the American Enterprise Institute)
Tony Lawson:
"The goal is to see the structures that condition human interaction and identify those we don't want... Identify the structures that stand in the way to human flourishing." (What's Wrong with Modern Economics? YouTube 2015)
Dale Mortensen:
"Economics is a strange science. Our subject deals with some of the most important as well as mundane issues that impinge on the human condition." (Brainy Quotes)
Tony Lawson:
"...the materials and principles of social reality are the same across economics, sociology, politics, anthropology, human geography and all other disciplines concerned with the study of social life." (The Nature and State of Modern Economics, 2015)
Tony Lawson:
"Most people responded to the crisis in economics by putting forward new theories, new policies, new models. What is missing is philosophical discussion." (What's Wrong with Modern Economics? YouTube 2015)
Tony Lawson:
"I'm going to suggest to you that [philosophical discussion] is fundamental. In fact all the problems of the discipline are basically ontological. The orientation of the discipline ought to be ontological as it is in physics, chemistry, biology and almost everything else." (What's Wrong with Modern Economics? YouTube 2015)
Tony Lawson:
"When you look to the physical realm, they don't really start with methods. They start with ontology. If they want to look at a planet far away, they build a telescope. If they want to check a theory about the nature of mass and they need to check out Higgs boson, they build an electron accelerator." (What's Wrong with Modern Economics? YouTube 2015)
Tony Lawson
"With ontology, we can get an insight to what sort of methods might be useful for [economics]." (Really Reorienting Modern Economics, YouTube 2010)
Tony Lawson:
"I'd like to state a case for ontology: the study of being. The study of nature and reality." (Really Reorienting Modern Economics, YouTube 2010)
Tony Lawson:
"Closed systems are those in which correlations and event regularities occur and the ontology that is sufficient for it is a world of isolated atoms and that seems to be the implicit ontology of economics for the last 50 years." (Confronting Mathematical Models in Economics, YouTube 2014)
Christopher Sims:
"There isn't much political coloration in my economic writing; it's not surprising that few people know my political views. They really aren't very important." (Brainy Quotes)
Noah Smith:
"So what seems to unite the new heavyweight macro critics is an emphasis on realism... even the people advocating for more realism acknowledge that there's some ideal middle ground. But if Romer, Kocherlakota, etc. are to be believed, macroeconomists aren't currently close to that optimal interior solution." (The new heavyweight macro critics, 2016)
Kenneth Arrow:
"The formal structure of a decision problem in any area can be put into four parts: 1. the choice of an objective function denning the relative desirability of different outcomes; 2. specification of the policy alternatives which are available to the agent, or decisionmaker, 3. specification of the model, that is, empirical relations that link the objective function, or the variables that enter into it, with the policy alternatives and possibly other variables; and 4. computational methods for choosing among the policy alternatives that one which performs best as measured by the objective function." (The Economics of Information , 1984)
Kenneth Arrow: "It is worth pointing out that in this particular study our authors have abandoned demand and supply functions as a tool for analysis, even as applied to individuals... [The problem] has been reformulated as one of proving that a number of maximizations of individual goals under interdependent restraints can be simultaneously carried out." (Three Essays, 1957)
Herbert Simon:
"Modem mainstream economic theory bravely assumes that people make their decisions in such a way as to maximize their utility. Accepting this assumption enables economics to predict a great deal of behavior (correctly or incorrectly) without ever making empirical studies of human actors." (1990, Invariants of Human Behavior)
Richard Thaler:
"The core premise of economic theory is that people choose by optimizing." (Misbehaving: The Making of Behavioral Economics)
John Maynard Keynes:
"Good economists are scarce because the gift for using 'vigilant observation' to choose good models, although it does not require a highly specialised intellectual technique, appears to be a very rare one." (Letter to Roy Harrod, 1933)
Tony Lawson:
"I think pluralism is the right message. Pluralism isn't saying you're wrong. Pluralism is saying all voices ought to be listened to." (What's Wrong with Modern Economics? YouTube 2015)
Tony Lawson:
"Pluralism can't mean, or isn't very useful if it means anything goes. I take it pluralism means open to others... but it doesn't mean every theory is as good as every other theory." (What's Wrong with Modern Economics? YouTube 2015)
Dani Rodrik:
Dani Rodrik:
Dani Rodrik:
Dani Rodrik:
Dani Rodrik:
Dani Rodrik:
Oliver Williamson:
"For those who, like myself, are inclined to be eclectic, no comprehensive commitment to one approach rather than another needs to be made. What is involved, rather, is the selection of the approach best suited to deal with the problems at hand.” (1975, Markets and Hierarchy)
Thomas Robert Malthus:
"Population, when unchecked, increases in a geometrical ratio, Subsistence, increases only in an arithmetical ratio." (An Essay on the Principle of Population, 1798)
Thomas Robert Malthus:
"The perpetual tendency of the race of man to increase beyond the means of subsistence is one of the general laws of animated nature, which we can have no reason to expect to change." (An Essay on the Principle of Population, 1798)
John Kenneth Galbraith:
"We can safely abandon the doctrine of the eighties, namely that the rich were not working because they had too little money, the poor because they had much." (Quoted in the Guardian, 1991)
John Kenneth Galbraith:
"In recent times no problem has been more puzzling to thoughtful people than why, in a troubled world, we make such poor use of our affluence." (The Affluent Society, 1958)
John Kenneth Galbraith:
"The drive toward complex technical achievement offers a clue to why the US is good at space gadgetry and bad at slum problems." (Quoted in The Saturday Evening Post, 1968)
John Kenneth Galbraith:
"The modern conservative is engaged in one of man's oldest exercises in moral philosophy; that is, the search for a superior moral justification for selfishness." (Interview with Rupert Cornwell, 2002)
Henry George:
"It is true that disappointment has followed disappointment, and that discovery upon discovery, and invention after invention, have neither lessened the toil of those who most need respite, nor brought plenty to the poor." (Progress and Poverty, 1879)
Henry George:
"There is, and always has been, a widespread belief among the more comfortable classes that the poverty and suffering of the masses are due to their lack of industry, frugality, and intelligence. This belief, which at once soothes the sense of responsibility and flatters by its suggestion of superiority, is probably even more prevalent in countries like the United States..."
Thomas Robert Malthus:
"To remedy the frequent distresses of the common people, the poor laws of England have been instituted; but it is to be feared that though they may have alleviated a little the intensity of individual misfortune, they have spread the general evil over a much larger surface." (An Essay on the Principle of Population, 1798)
Thomas Robert Malthus:
"The laboring poor, to use a vulgar expression, seem always to live from hand to mouth. Their present wants employ their whole attention, and they seldom think of the future. Even when they have an opportunity of saving they seldom exercise it, but all that is beyond their present necessities goes, generally speaking, to the ale house." (An Essay on the Principle of Population, 1798)
Robert Owen:
"The advantage of pure, and the disadvantage of impure air are experienced each time we breathe, and all who understand the causes of disease know that an impure atmosphere is most unfavourable to the enjoyment of health, and an efficient cause to shorten human existence within the natural life of man. It is therefore most desirable that decisive measures should be devised and generally adopted to ensure to all a pure atmosphere, in which to live during their lives." (The Book of the New Moral World, 1836)
Robert Owen:
"What ideas individuals may attach to the term 'Millennium' I know not; but I know that society may be formed so as to exist without crime, without poverty, with health greatly improved, with little, if any misery, and with intelligence and happiness increased a hundredfold; and no obstacle whatsoever intervenes at this moment except ignorance to prevent such a state of society from becoming universal." (Address to the Inhabitants of New Lanark, 1816)
Bernie Sanders:
"Study after study has shown that without stable housing it is much harder for working people to hold down jobs and get the health care they need, and children are put at a profound disadvantage in terms of intellectual and emotional development and school performance... Decent-quality affordable housing should be a right of all Americans." (Our Revolution, 2016)
Adam Smith:
"No society can surely be flourishing and happy, of which the greater part of the members are poor and miserable. It is but equity, besides, that they who feed, cloath and lodge the whole body of the people, should have such a share of the produce of their own labour as to be themselves tolerably well fed, clothed, and lodged." (The Wealth of Nations, 1776)
Milton Friedman:
"The price system works so well, so efficiently, that we are not aware of it most of the time. We never realize how well it functions until it is prevented from functioning, and even then we seldom recognize the source of the trouble." (Free to Choose, 1980)
Friedrich Hayek:
"The misconception that costs determined prices prevented economists for a long time from recognizing that it was prices which operated as the indispensable signals telling producers what costs it was worth expending on the production of the various commodities and services, and not the other way around. It was the costs which they had expended which determined the prices of things produced... It was this crucial insight which finally broke through and established itself about a hundred years ago through the so-called marginal revolution in economics." (Coping with Ignorance, 1978)
Friedrich Hayek:
"I don't know what monetarism is... If it means the particular version of Milton Friedman, I think it has because he imagines that he can achieve - ascertain - a clear quantity relationship between a measurable quantity of money and the price level. I don't think that is possible." (Interview with F. A. Hayek, 1983)
William Stanley Jevons:
"Repeated reflection and inquiry have led me to the somewhat novel opinion, that value depends entirely upon utility." (The Theory of Political Economy, 1871)
David Ricardo:
"Utility then is not the measure of exchangeable value, although it is absolutely essential to it." (Principles of Political Economy and Taxation, 1817)
David Ricardo:
"Adam Smith, and other able writers to whom I have alluded, not having viewed correctly the principles of rent, have, it appears to me, overlooked many important truths, which can only be discovered after the subject of rent is thoroughly understood." (Principles of Political Economy and Taxation, 1817)
David Ricardo:
"Possessing utility, commodities derive their exchangeable value from two sources: from their scarcity, and from the quantity of labour required to obtain them." (Principles of Political Economy and Taxation, 1817)
David Ricardo:
"Rent is that portion of the produce of the earth which is paid to the landlord for the use of the original and indestructible powers of the soil." (Principles of Political Economy and Taxation, 1817)
Jean-Baptiste Say:
"Demand and supply are the opposite extremes of the beam, whence depend the scales of dearness and cheapness; the price is the point of equilibrium, where the momentum of the one ceases, and that of the other begins." (A Treatise On Political Economy 4th edition, 1832)
Jean-Baptiste Say:
"A man who applies his labour to the investing of objects with value by the creation of utility of some sort, can not expect such a value to be appreciated and paid for, unless where other men have the means of purchasing it. Now, of what do these means consist? Of other values of other products, likewise the fruits of industry, capital, and land. Which leads us to a conclusion that may at first appear paradoxical, namely, that it is production which opens a demand for products." (A Treatise On Political Economy 4th edition, 1832)
Adam Smith:
"The value of any commodity, therefore, to the person who possesses it, and who means not to use or consume it himself, but to exchange it for other commodities, is equal to the quantity of labour which it enables him to purchase or command. Labour, therefore, is the real measure of the exchangeable value of all commodities." (The Wealth of Nations, 1776)
Adam Smith:
"The value which the workmen add to the materials, therefore, resolves itself in this case into two parts, of which the one pays their wages, the other the profits of the employer upon the whole stock of materials and wages which he advanced." (The Wealth of Nations, 1776)
Adam Smith:
"It is the natural effect of improvement, however, to diminish gradually the real price of almost all manufactures." (The Wealth of Nations, 1776)
Noah Smith:
"New Keynesian theory, which is the academic idea most beloved of central banks around the world, has failed to explain Japan's lack of inflation... Japan offers a clear object lesson that macroeconomic theory is very, very hard to get right." (An Economics Lab where Theories Go to Die, 2016)
Ludwig von Mises:
"If historical experience could teach us anything, it would be that private property is inextricably linked with civilization." (Human Action, 1949)
Douglass North:
"The first economic revolution was not a revolution because it shifted man's major economic activity from hunting and gathering to settled agriculture. It was a revolution because the transition created an incentive change for mankind of fundamental proportions. The incentive change stems from the different property rights under the two systems. When common property rights over resources exist, there is little incentive for the acquisition of superior technology and learning. In contrast, exclusive property rights which reward the owners provide a direct incentive to improve efficiency and productivity, or, in more fundamental terms, to acquire more knowledge and new techniques. It is this change in incentive that explains the rapid progress made by mankind in the last 10,000 years in contrast to his slow development during the long era as a primitive hunter/gatherer." (1990, Economic Behavior and Institutions)
Adam Smith:
"As soon as the land of any country has all become private property, the landlords, like all other men, love to reap where they never sowed, and demand a rent even for its natural produce." (The Wealth of Nations, 1776)
Adam Smith:
"Civil government, so far as it is instituted for the security of property, is in reality instituted for the defence of the rich against the poor, or of those who have some property against those who have none at all." (The Wealth of Nations, 1776)
1986: James M. Buchanan
"Public choice did not emerge from some profoundly new insight, some new discovery, some social science miracle. Public choice, in its basic insights into the workings of politics, in corporates an understanding of human nature that differs little, if at all, from that of James Madison and his colleagues at the time of the American Founding." (Brainy Quotes)
Gary Becker:
"Still, intuitive assumptions about behavior is only the starting point of systematic analysis, for alone they do not yield many interesting implications." (Brainy Quotes)
Paul Krugman:
"When it comes to the all-too-human problem of recessions and depressions, economists need to abandon the neat but wrong solution of assuming that everyone is rational and markets work perfectly." (Economics 4th edition, 2015)
Thomas Sargent:
"My recollection is that Bob Lucas and Ed Prescott were initially very enthusiastic about rational expectations econometrics. After all, it simply involved imposing on ourselves the same high standards we had criticized the Keynesians for failing to live up to. But after about five years of doing likelihood ratio tests on rational expectations models, I recall Bob Lucas and Ed Prescott both telling me that those tests were rejecting too many good models." (2005, Interview with Thomas Sargent)
William Stanley Jevons:
"I protest against deference to any man, whether John Stuart Mill, or Adam Smith, or Aristotle, being allowed to check inquiry. Our science has become far too much a stagnant one, in which opinions rather than experience and reason are appealed to." (The Theory of Political Economy, 1871)
Robert Johnson:
Rob Johnson:
"The tribal practice of what constitutes valid evidence and not can influence what people will study and leave aside." (How the Economics of the Economics Profession Resists New Thinking. YouTube, 2017)
Paul Krugman:
"We’re living in a Dark Age of macroeconomics. Remember, what defined the Dark Ages wasn’t the fact that they were primitive — the Bronze Age was primitive, too. What made the Dark Ages dark was the fact that so much knowledge had been lost, that so much known to the Greeks and Romans had been forgotten by the barbarian kingdoms that followed." (A Dark Age of Macroeconomics, 2009)
Tony Lawson:
"If the situation is one in which two or three mechanisms or tendencies are thought to dominate a phenomenon of interest, perhaps a range of likely outcomes can be safely speculated." (The Nature and State of Modern Economics, 2015)
Tony Lawson:
"The essence of science is this move from phenomenon of interest to underlying cause. We can do this in the social realm because it's structured. We can go practices of interest to underlying cause. Practices bound up with poverty, crisis, whatever to underlying causes. This move is as open to us in economics as it is in any science." (Really Reorienting Modern Economics, YouTube 2010)
Ed Leamer:
"All we have, especially in macro is opinions and their either persuasive and well thought out or not." (EconTalks: Ed Leamer on the State of Econometrics)
Andrew Lo
50. "From an ecological perspective, I know it's hard to not make value judgments but as a scientist what we might want to do is first study the ecosystem, measure all of the various different species and their biomasses and look at mating rituals and behaviors. And once you actually map out all of these relationships, you can then decide what you want to do with the information." (Adaptive Markets: Financial Evolution at the Speed of Light, YouTube 2017)
Franco Modigliani:
"Economists agree about economics - and that's a science - and they disagree about economic policy because that's a value judgment... I've had profound disagreements on policy with the famous Milton Friedman. But, on economics, we agree." (Brainy Quotes)
Gary Saul Morson, Morton Shapiro:
"Aristotle long ago pointed out, one needs a fundamentally different sort of reasoning inasmuch as actual cases have features no theory can anticipate. One needs judgement, wisdom and experience. In practical reasoning, one begins with a deep understanding of the specific situation and reasons from there." (Cents and Sensibility, 2017)
Adam Ozimek:
"I think the research comes out and looks at slightly different angles and adjusts for slightly different mechanisms and we know so much more about the minimum wage than we did 10 years ago... If you look at the literature closely it doesn't look like a draw where two sides just lob evidence back and forth. It looks like progress to me." (EconTalks: Adam Ozimek on the Power of Econometrics and Data, 2016)
Noah Smith:
"The alternative to empiricism in economics is not agnostic humility, but intuitionism - the idea that we can know about the world by thinking about how it works, and that exposure to evidence will only pollute the truths that we divine from our own minds. And that's something I think economists need to avoid." (Anti-empiricism is not humility, 2017)
Milton Friedman:
"We need government to enforce the rules of the game. By prosecuting anti-trust violations, for instance. We need a government to maintain a system of courts that will uphold contracts and rule on compensation for damages. We need a government to ensure the safety of its citizens–to provide police protection." (Playboy Interview with Milton Friedman, 1973)
Milton Friedman:
"The proper role of government is exactly what John Stuart Mill said in the middle of the 19th century in On Liberty. The proper role of government is to prevent other people from harming an individual." (America's Drug Forum Interview, 1991)
Milton Friedman:
"The only effective cure is to reduce the scope of government - get government out of the business." (YouTube: Big Business, Big Government)
Milton Friedman:
"The unions might be good for the people who are in the unions but it doesn't do a thing for the people who are unemployed. Because the union keeps down the number of jobs, it doesn't do a thing for them." (Interview with Brian Lamb, 2000)
Dani Rodrik:
"Verbal arguments that seem intuitive often collapse or are revealed to be incomplete under closer mathematical scrutiny. The reason is that 'verbal models' can ignore nonobvious but potentially significant interactions." (Economics Rules, 2015)
Adam Smith:
"To expect, indeed, that the freedom of trade should ever be entirely restored in Great Britain, is as absurd as to expect that an Oceana or Utopia should never be established in it." (The Wealth of Nations, 1776)
Adam Smith:
"The proposal of any new law or regulation of commerce which comes from this order, ought always to be listened to with great precaution, and ought never to be adopted till after having been long and carefully examined, not only with the most scrupulous, but with the most suspicious attention. It comes from an order of men, whose interest is never exactly the same with that of the public, who have generally an interest to deceive and even to oppress the public, and who accordingly have, upon many occasions, both deceived and oppressed it." (The Wealth of Nations, 1776)
Adam Smith:
"He seems to imagine that he can arrange the different members of a great society with as much ease as the hand arranges the different pieces upon a chess-board. He does not consider that the pieces upon the chess-board have no other principle of motion besides that which the hand impresses upon them; but that, in the great chess-board of human society, every single piece has a principle of motion of its own, altogether different from that which the legislature might choose to impress upon it. If those two principles coincide and act in the same direction, the game of human society will go on easily and harmoniously, and is very likely to be happy and successful. If they are opposite or different, the game will go on miserably, and the society must be at all times in the highest degree of disorder." (Theory of Moral Sentiments, 1759)
Adam Smith:
"Our merchants and master-manufacturers complain much of the bad effects of high wages in raising the price, and thereby lessening the sale of their goods both at home and abroad. They say nothing concerning the bad effects of high profits. They are silent with regard to the pernicious effects of their own gains. They complain only of those of other people." (The Wealth of Nations, 1776)
Joseph Stiglitz:
"The free market policies were never based on solid empirical and theoretical foundations, and even as many of these policies were being pushed, academic economists were explaining the limitations of markets - for instance, whenever information is imperfect, which is to say always." (2007, Bleakonomics)
Jean Tirole:
"Since then, however, the Industrial Organization field has undergone rapid development, indeed a revolution. This revolution has greatly enhanced our understanding of imperfectly competitive markets, which in turn has laid a foundation for better informed competition policy. Comparable progress has been made in the theory of optimal regulation of firms with market power." (2014, Market Power and Regulation)
Harry Markowitz
"During the 1950s, I decided, as did many others, that many practical problems were beyond analytic solution and that simulation techniques were required. At RAND, I participated in the building of large logistics simulation models; at General Electric, I helped build models of manufacturing plants." (Brainy Quotes)
Adam Smith:
"It appears, accordingly, from the experience of all ages and nations, I believe, that the work done by freemen comes cheaper in the end than that performed by slaves." (The Wealth of Nations, 1776)
Milton Friedman:
"Because we live in a largely free society, we tend to forget how limited is the span of time and the part of the globe for which there has ever been anything like political freedom: the typical state of mankind is tyranny, servitude, and misery." (Capitalism and Freedom, 1962)
Tony Lawson:
"Social reality is made up of communities where the components are often human beings and the rights, obligations and positions is what holds it together." (Confronting Mathematical Models in Economics, YouTube 2014)
John Locke:
"[I am] lover of his king and country, a lover of peace and the protestant interest... [Consent] is absolutely necessary to the very being and subsistence of our government and without which our peace and religion cannot possibly be any way secured..." (Letter to Edward Clarke, 1690)
Bernie Sanders:
"When people become old, they often become frail and sick. They are unable to work and earn an income. In a civilized society, the older generation - the people who raised us - are entitled, and allowed, to live out their remaining years in dignity and security." (Our Revolution, 2016)
Bill Gates:
"The only reason I'm optimistic about [renewable energy] is because of innovation... I want to tilt the odds in our favor by driving innovation at an unnaturally high pace, or more than its current business-as-usual course." (We Need an Energy Miracle, 2015)
Bill Nye:
"Desalination of water could be the key to the future for so may of us humans... We could have all the clean water we wanted for everybody all over the world and we would power pumps with solar power..." (Big Think: Can We Desalinate Water for Human Consumption on a Massive Scale? 2016)
Bernie Sanders:
"This is the stuff we do so well when challenged as a nation, whether by putting a man on the moon, eradicating diseases, or developing the Internet. The U.S. can and must dedicate our engineering know-how to a clean energy revolution, in our universities, in our national energy labs, and in businesses and communities all across the country." (Our Revolution, 2016)
Annie Sneed:
"To limit warming, nations will also likely need to physically remove carbon from the atmosphere. And to do that, they will have to deploy 'negative emissions technology' - technologies that scrub CO2 out of the air." (The Search Is on for Pulling Carbon from the Air, 2016)
Milton Friedman:
"I am in favor of cutting taxes under any circumstances and for any excuse, for any reason, whenever it's possible... because I believe the big problem is not taxes, the big problem is spending. I believe our government is too large and intrusive, that we do not get our money's worth..." (Quoted in Conservatives Betrayed, 2006)
Milton Friedman:
"If I spend somebody else’s money on somebody else, I’m not concerned about how much it is, and I’m not concerned about what I get. And that’s government." (Interview on Fox News, 2004)
Milton Friedman:
"What are the least bad taxes? In my opinion the least bad tax is the property tax on the unimproved value of land, the Henry George argument of many, many years ago." (Quoted in The Times Herald, Norristown, Pennsylvania, 1978)
Henry George:
"The tax upon land values is, therefore, the most just and equal of all taxes. It falls only upon those who receive from society a peculiar and valuable benefit, and upon them in proportion to the benefit they receive. It is the taking by the community, for the use of the community, of that value which is the creation of the community."
Gwynn Guilford:
"Cutting taxes on America's rich isn't going to encourage them to invest more - they already have plenty to spend and aren't spending it. Worse, by shifting wealth from middle class families to the moneyed few - a group that is able to consume far less than the working masses - this sort of policy suppresses consumption, which in turn discourages investment in productive businesses." (Almost everything Republicans get wrong about the economy started with a cocktail napkin in 1974, 2017)
Thomas Hungerford:
"The results of the analysis suggest that changes over the past 65 years in the top marginal tax rate and the top capital gains tax rate do not appear correlated with economic growth [in the United States]. The reduction in the top tax rates appears to be uncorrelated with saving, investment, and productivity growth. The top tax rates appear to have little or no relation to the size of the economic pie." (Taxes and the Economy: An Economic Analysis of the Top Tax Rates Since 1945, 2012)
Thomas Hungerford:
"The top marginal rate in the 1950s was over 90 percent and the real GDP growth rate averaged 4.2 percent and the real per capita GDP increased annually by 2.4 percent in the 1950s." (Taxes and the Economy: An Economic Analysis of the Top Tax Rates Since 1945, 2012)
Alana Semuels:
"[In the United States] between 1935 and 1982, the top tax rate did not dip below 70 percent. Part of this was due to a belief among those in charge that government had a role in combating extreme wealth." (Is the U.S. Due for Radically Raising Taxes for the Rich? 2016)
Adam Smith:
"The tax which each individual is bound to pay ought to be certain, and not arbitrary." (The Wealth of Nations, 1776)
Adam Smith:
"It is not very unreasonable that the rich should contribute to the public expense, not only in proportion to their revenue, but something more than in that proportion." (The Wealth of Nations, 1776)
Ronald Coase
"But a theory is not like an airline or bus timetable. We are not interested simply in the accuracy of its predictions. A theory also serves as a base for thinking. It helps us to understand what is going on by enabling us to organize our thoughts. Faced with a choice between a theory which predicts well but gives us little insight into how the system works and one which gives us this insight but predicts badly, I would choose the latter, and I am inclined to think that most economists would do the same." (1981, How should economists choose?)
Tony Lawson:
"...it is clear that the recent crisis situation (like almost any social situation) is something that needs to be understood rather than modeled." (The Nature and State of Modern Economics, 2015)
Tony Lawson:
"Of course, the details of the recent period are complex, and a full understanding requires, amongst other things, a detailed analysis of the numerous structural transformations in the financial sector during this period..." (The Nature and State of Modern Economics, 2015)
Tony Lawson:
"However, I should emphasise that explanatory analysis required to render any chosen contrast phenomenon of interest intelligible can take many forms. It may involve the identification of a hitherto non-existent local mechanism or set of conditions, or a reworking of previous understandings, including seeing connections or relations previously unnoticed, or even the elaboration of a highly abstract account of the workings of a system in its entirety. It all depends on context." (The Nature and State of Modern Economics, 2015)
Oskar Morgenstern:
"At the present time there is an unmistakable tendency to consider only a contribution to mathematical economics as a contributions of value. Hence a certain craving to press everything into some mathematical form... This preoccupation appears to me to be unnecessary and possibly dangerous." (Limits of the Use of Mathematics in Economics, 1963)
Brad Voracek:
"While today's experts hold prestigious positions, their understanding of math is often greater than their understanding of the economy. As the 2008 recession demonstrated, the majority of current experts didn't get things right." (Ending the Econocracy: The Need for Pluralism in Economics, 2017)
William Stanley Jevons:
"My principal work now lies in tracing out the exact nature and conditions of utility. It seems strange indeed that economists have not bestowed more minute attention on a subject which doubtless furnishes the true key to the problems of economics." (The Theory of Political Economy, 1871)
Francois Quesnay:
"To secure the greatest amount of pleasure with the least possible outlay should be the aim of all economic effort... when everyone does this the natural order, instead of being endangered, will be all the better assured." (Quoted in Economics Modern Business by Vassie and Chadburn)
Thomas More:
"The island of Utopia is in the middle two hundred miles broad, and holds almost at the same breadth over a great part of it, but it grows narrower towards both ends... The channel is known only to the natives; so that if any stranger should enter into the bay without one of their pilots he would run great danger of shipwreck." (Utopia, 1516)
Thomas More:
"They have no lawyers among them, for they consider them as a sort of people whose profession it is to disguise matters and to wrest the laws, and, therefore, they think it is much better that every man should plead his own cause, and trust it to the judge, as in other places the client trusts it to a counsellor; by this means they both cut off many delays and find out truth more certainly." (Utopia, 1516)
Thomas More:
"They have but few laws, and such is their constitution that they need not many. They very much condemn other nations whose laws, together with the commentaries on them, swell up to so many volumes; for they think it an unreasonable thing to oblige men to obey a body of laws that are both of such a bulk, and so dark as not to be read and understood by every one of the subjects." (Utopia, 1516)
John Kenneth Galbraith:
"In recent times, no problem has been more puzzling to thoughtful people than why, in a troubled world, we make such poor use of our affluence." (The Affluent Society, 1958)
Bernie Sanders:
"How many times have you heard the refrain, 'America is broke'? Baloney... in reality, we are the richest country in the world, and we are richer than at any other time in history. The U.S. has a record-breaking $88 trillion in total wealth... " (Our Revolution, 2016)
Kenneth Arrow:
"While economic theory in general may be defined as the theory of how an economic condition or an economic development is determined within an institutional framework, the welfare theory deals with how to judge whether one condition can be said to be better in some way than another and whether it is possible, by altering the institutional framework, to achieve a better condition than the present one." (Nobel Lectures, Economics 1972)
Tjalling Koopmans:
"One is led to conclude that economics as a scientific discipline is still somewhat hanging in the air." (Three Essays, 1957)
William Stanley Jevons:
"Among minor alterations, I may mention the substitution for the name political economy of the single convenient term economics. I cannot help thinking that it would be well to discard, as quickly as possible, the old troublesome double-worded name of our science." (The Theory of Political Economy, 1871)
Thomas Robert Malthus:
"The science of political economy is essentially practical, and applicable to the common business of human life. There are few branches of human knowledge where false views may do more harm, or just views more good." (An Essay on the Principle of Population 2nd Edition, 1836)
Alfred Marshall:
"Though a simple book can be written in selected topics, the central doctrines of economics are not simple and cannot be made so." (AZ Quotes)
John Stuart Mill:
Happily, there is nothing in the laws of value for the present writer or any future to clear up; the theory of the subject is complete. (Quoted in Knowledge and the Wealth of Nations by David Warsh)
Adam Smith:
"Political economy, considered as a branch of the science of a statesman or legislator, proposes two distinct objects: first, to provide a plentiful revenue or subsistence for the people, or more properly to enable them to provide such a revenue or subsistence for themselves; and secondly, to supply the state or commonwealth with a revenue sufficient for the public services. It proposes to enrich both the people and the sovereign." (The Wealth of Nations, 1776)
Jan Tinbergen:
Mankind’s problems can no longer be solved by national governments. What is needed is a World Government. This can best be achieved by strengthening the United Nations system." (Human Development Report 1994 by the United Nations)
Jan Tinbergen:
"Some of the most important new institutions would be financial- a World Treasury and a World Central Bank. Just as each nation has a system of income redistribution, so there should be a corresponding ‘World Financial Policy’ to be implemented by the World Bank and the World Central Bank." (Human Development Report 1994 by the United Nations)
Jan Tinbergen:
"Some of these proposals are, no doubt, far-fetched and beyond the horizon of today’s political possibilities. But the idealist of today often turns out to be the realists of tomorrow." (Human Development Report 1994 by the United Nations)
Friedrich Hayek:
"A limited democracy might indeed be the best protector of individual liberty and be better than any other form of limited government, but an unlimited democracy is probably worse than any other form of unlimited government, because its government loses the power even to do what it thinks right if any group on which its majority depends thinks otherwise." (Letter to the Times, 1978)
George Stigler:
"In spite of assigning little influence of economists' preachings on actual public policy, I do not believe that economists' influence is negligible. The reconciliation of these views lies in the fact that economists are scientists as well as preachers. Our science seeks to understand how economic institutions and economic systems work, and no informed person can deny that we have made much progress in this work." (1988, The Effect of Government on Economic Efficiency)
18. Division of labor
Emile Durkheim:
"Nowadays, the phenomenon (of division of labor) has developed so generally it is obvious to all." (The Division of Labor in Society, 1893)
Emile Durkheim:
"The division of labour is not of recent origin, but it was only at the end of the eighteenth century that social cognizance was taken of the principle. Though, until then, unwitting submission had been rendered to it. To be sure, several thinkers from earliest times saw its importance; but Adam Smith was the first to attempt a theory of it. Moreover, he adopted this phrase that social science later lent to biology." (The Division of Labor in Society, 1893)
Adam Smith:
"The greatest improvement in the productive powers of labour, and the greatest part of skill, dexterity, and judgment with which it is any where directed, or applied, seem to have been the effects of the division of labour." (The Wealth of Nations, 1776)
Adam Smith:
"This great increase of the quantity of work which, in consequence of the division of labour, the same number of people are capable of performing, is owing to three different circumstances; first, to the increase of dexterity in every particular workman; secondly, to the saving of the time which is commonly lost in passing from one species of work to another; and lastly, to the invention of a great number of machines which facilitate and abridge labour, and enable one man to do the work of many." (The Wealth of Nations, 1776)
19. Econometrics
Joshua Angrist:
"Regression is just a way to control for things, to try and hold characteristics of groups that you're trying to compare fixed." (EconTalks: Joshua Angrist on Econometrics and Causation, 2014)
Ragnar Frisch:
"Econometrics has as its aim to subject abstract laws of theoretical political economy or 'pure' economics to experimental and numerical verification, and thus to turn pure economics, as far as possible, into a science in the strict sense of the word." (On a Problem in Pure Economics, 1926)
Ragnar Frisch:
"I have insisted that econometrics must have relevance to concrete realities, otherwise it degenerates into something which is not worthy of the name econometrics, but ought rather to be called playometrics." (Quoted in The Concise Encyclopedia of Economics)
Clive Granger:
"Rob Engle and I are concerned with extracting useful implications from economic data, and so the properties of the data are of particular importance." (Brainy Quotes)
James Heckman:
"I've worked on China and trying to look at what technical change is in China. If you were to use 20 year old data sets, it's a waste of time. It's much better to actually go the sites in Shanghai and further in the interior to see what the technologies are, who is actually engaged and what kind of investment is being made. Those anecdotal accounts are things that banks do, what business school people do but it's not what a real economists does." (How the Economics of the Economics Profession Resists New Thinking, YouTube 2017)
James Heckman:
"I think there's been a huge shift away from understanding behavior and moving towards statistical artifacts that are hard to interpret as responses to economic questions. So I think the credibility revolution has been somewhat overstated and not properly appreciated as having really turned focus away from serious economic analysis towards something I think is purely statistical." (EconTalks: James Heckman on Facts, Evidence and the State of Econometrics, 2016)
Adam Ozimek:
"I think Russ is most correct in arguing for more humility from economists. But I would add that this is a general problem not particular to economists, and I would conjecture that on average those who do not attempt to tie down their beliefs with empirical research suffer from an even greater humility gap than those who do. Within economics, failure to regularly cite empirical results, or lack of familiarity with them, seems pretty strongly correlated with lack of humility and not vice versa." (The Value of Empirical Economics, 2017)
Edmund Phelps:
"Statistical studies are all over the lot about the pluses and minuses of raising the minimum wage." (Brainy Quotes)
Russ Roberts:
"One response to the questions I am raising is that we have new techniques that solve a lot of the problems I’m talking about. These new empirical techniques have allowed us to run quasi-experiments that while not perfect, eliminate many of the problems of complexity and multi-causal reality. I remain a skeptic. But maybe the champions of the new empirical techniques will convince the skeptics. We’ll see... We are notoriously unreliable at the things the world really cares about and asks of our profession... What I am arguing here is that the combination of economics with statistics in a complex world promises a lot more than it delivers. We economists should be more humble and honest about the reliability and precision of statistical analysis." (What Do Economics Actually Know? 2017)
Noah Smith:
"Is McCloskey unaware of the fact that physicists regularly use statistical significance testing, of the classic R.A. Fisher type?" (Dierdre McCloskey Says Things, 2015)
Noah Smith:
"The new [econometric] techniques - regression discontinuity, difference-in-difference, synthetic controls - are mostly pretty easy and quick for any smart person to grasp." (A new age of econ imperialism is coming, 2016)
Noah Smith:
"By not teaching our introductory students even the most basic techniques for testing theories, we are asking them to take conventional wisdom - often, incorrect conventional wisdom - on faith. That can’t be good." (Theory Versus Data? You Shouldn't Have to Choose, 2016)
Jan Tinbergen:
"As a boundary science, econometrics is younger than the adjacent regions, which fact likewise has advantages and disadvantages. As a disadvantage, the lack of an established doctrine, and also the lack of established textbooks, can be felt; as an advantage is the fresh enthusiasm, with which its students work." (Econometrics, 1951)
20. Education
Robert Owen:
"Train any population rationally, and they will be rational. Furnish honest and useful employments to those so trained, and such employments they will greatly prefer to dishonest or injurious occupations. It is beyond all calculation the interest of every government to provide that training and that employment; and to provide both is easily practicable." (A New View of Society, 1813)
Bernie Sanders:
"According to a 2007 report by the Federal Revere Bank of Minneapolis, 'The most efficient means to boost the productivity of the workforce 15 to 20 years down the road is to invest in today's youngest children.'" (Our Revolution, 2016)
Bernie Sanders:
"Today in America, hundreds of thousands of bright young people who have the desire and the ability to get a college education will not be able to do so because their families lack the money." (Our Revolution, 2016)
Adam Smith:
"For a very small expence the public can facilitate, can encourage, and can even impose upon almost the whole body of the people, the necessity of acquiring those most essential parts of education." (The Wealth of Nations, 1776)
21. Employment
Henry George:
"Though custom has dulled us to it, it is a strange and unnatural thing that men who wish to labor, in order to satisfy their wants, cannot find the opportunity... The real trouble must be that supply is somehow prevented from satisfying demand, that somewhere there is an obstacle which prevents labor from producing the things that laborers want."
Henry George:
"Why should charity be offered the unemployed? It is not alms they ask. They are insulted and embittered and degraded by being forced to accept as paupers what they would gladly earn as workers. What they ask is not charity, but the opportunity to use their own labor in satisfying their own wants. Why can they not have that? It is their natural right." (How to Help the Unemployed, 1894)
Henry George:
"To admit that labor needs protection is to acknowledge its inferiority; it is to acquiesce in an assumption that degrades the workman to the position of a dependent, and leads logically to the claim that the employee is bound to vote in the interest of the employer who provides him with work." (Protection or Free Trade? 1886)
James Heckman
"The scientific study of labor economics provided the opportunity for me to unite theory with evidence my lifetime intellectual passion." (Brainy Quotes)
Arthur MacEwan:
"It's not hard to figure out what kinds of jobs should be created with government stimulus spending. Prime examples include environmental repair and preservation, education and training and infrastructure repair and extension." (What Would Full Employment Cost? 2015)
Karl Marx:
"The worker's existence is thus brought under the same condition as the existence of every other commodity. The worker has become a commodity, and it is a bit of luck for him if he can find a buyer... " (Paris Manuscripts , 1844)
Karl Marx:"He becomes an appendage of the machine, and it is only the most simple, most monotonous, and most easily acquired knack, that is required of him." (The Manifesto of the Communist Party, 1848)
Ludwig von Mises:
"Government spending cannot create additional jobs. If the government provides the funds required by taxing the citizens or by borrowing from the public, it abolishes on the one hand as many jobs as it creates on the other." (Socialism, Epilogue 1947)
Elinor Ostrom:
"What is missing from the policy analyst's tool kit - and from the set of accepted, well-developed theories of human organization - is an adequately specified theory of collective action whereby a group of principals can organize themselves voluntarily to retain the residuals of their own efforts." (1966, Governing the Commons)
Christopher Pissarides:
"The development of formal mathematical models with search frictions coincided with the time that I was looking for a topic for my PhD research. Two things about search impressed me most. In the Phelps volume, search was claimed as a microfoundation for the natural rate of unemployment, introduced just a year or two before by Milton Friedman (1968) and Edmund Phelps (1967), and for the inflation-unemployment trade-off (the Phillips curve)."
David Ricardo:
"Labour, like all other things which are purchased and sold, and which may be increased or diminished in quantity, has its natural and its market price. The natural price of labour is that price which is necessary to enable the labourers, on with another, to subsist and to perpetuate their race, without either increase or diminution." (Principles of Political Economy and Taxation, 1817)
Adam Smith:
"The real and effectual discipline which is exercised over a workman is that of his customers. It is the fear of losing their employment which restrains his frauds and corrects his negligence." (The Wealth of Nations, 1776)
Adam Smith:
"The annual labour of every nation is the fund which originally supplies it with all the necessaries and conveniences of life which it annually consumes." (The Wealth of Nations, 1776)
Adam Smith:
"The annual produce of the land and labour of any nation can be increased in its value by no other means, but by increasing either the number of its productive labourers, or the productive powers of those labourers who had before been employed." (The Wealth of Nations, 1776)
22. Equilibrium
Ragnar Frisch:
"Questions of convergence under an infinite time horizon will depend so much on epsilontic refinements in the system of assumptions - and on the infinite constancy of these refinements - that we are humanly speaking absolutely certain of getting infinite time horizon results which have no relevance to concrete reality. And in particular we are absolutely certain of getting irrelevant results if such epsilontic exercises are made under the assumption of a constant technology." (Econometrics in the World of Today, 1970)
John Kenneth Galbraith:
"It is my guiding confession that I believe the greatest error in economics is in seeing the economy as a stable, immutable structure." (A Journey Through Economic Time, 1994)
23. Evolutionary economics
Tony Lawson:
"[The social realm] is reproduced and transformed through practice." (Confronting Mathematical Models in Economics, YouTube 2014)
24. Experimental economics
George Akerlof:
"If there is low power of tests for what is good or bad science, there are equilibrium traps. In these traps, new and better paradigms will fail to be adopted. On the contrary, such bad equilibrium traps disappear if there are high power of tests." (AEA Publishing and Promotion in Economics, 2017)
"Regression is just a way to control for things, to try and hold characteristics of groups that you're trying to compare fixed."
Joshua Angrist:
"Each of these is an attempt to generate some kind of apples to apples comparison out of observational data." (EconTalks: Joshua Angrist on Econometrics and Causation, 2014)
Joshua Angrist:
"I can't imagine seeing an empirical paper about cause and effect which doesn't at least show me the author's best effort at some kind of regression estimates where they control for the observed difference between groups." (EconTalks: Joshua Angrist on Econometrics and Causation, 2014)
David Autor:
"It's not that I think our estimates are cooked or even that sensitive. It's that they might miss other important margins. And I'm happy to concede that point. I mean, we've tried. It's not that we've sort of agreed to just sort of punt on that question. There's probably a lot of ways to look for those missing margins. We really haven't found them." (EconTalks: David Autor on Trade, China and U.S. Labor Markets, 2016)
Trygve Haavelmo:
"What makes a piece of mathematical economics not only mathematics but also economics is, I believe, this: When we set up a system of theoretical relationships and use economic names for the otherwise purely theoretical variables involved, we have in mind some actual experiment, or some design of an experiment, which we could at least imagine arranging, in order to measure those quantities in real economic life that we think might obey the laws imposed on their theoretical namesakes." (1994, The Probability Approach in Economics)
Tony Lawson:
"Firms, money, markets, institutions, social relations, even individual identities, cannot be experimentally isolated for each other." (The Nature and State of Modern Economics, 2015)
Tony Lawson:
"Many people think mathematics is essential for economics to be a science. I don't think it's necessary." (Really Reorienting Modern Economics, YouTube)
Ed Leamer:
"Economists don't observe feathers in a vacuum. They observe feathers when the wind is blowing, when humidity varies, eagle feathers, duck feathers. Tons of things that will affect the result." (EconTalks: Ed Leamer on the State of Econometrics)
Daniel McFadden:
"A good way to do econometrics is to look for good natural experiments and use statistical methods that can tidy up the confounding factors that nature has not controlled for us." (Brainy Quotes)
Adam Ozimek:
"The stimulus act isn't something like the minimum wage. It's not a discrete policy where you turn the fiscal level up and it goes from 0 to a 1 to a 2 to a 3. The stimulus act was like a dozen different things and so to say that research hasn't told us whether the stimulus act was good or not or increased jobs, well I mean you could write a 100 page paper on just what was in it... but I do think that within the stimulus package there are things we can learn and have learned." (EconTalks: Adam Ozimek on the Power of Econometrics and Data, 2016)
Alvin Roth:
"Experimental economics is about conducting experiments: bringing economics into the laboratory or creating controlled conditions in the field that allow us to understand better what we are seeing in less controlled circumstances." (Brainy Quotes)
Paul Samuelson:
"I think that it's more important for an economist to be wise and sophisticated in scientific method than it is for a physicist because with controlled laboratory experiments possible, they practically guide you; you couldn't go astray. Whereas in economics, by dogma and misunderstanding, you can go very sadly astray." (Brainy Quote)
Noah Smith:
"The idea seems to be that economists mainly engage in a deductive enterprise, dispensing high theory from Olympian mounts of authority. This may have been an accurate stereotype at one point, but these days it bears little resemblance to reality: most economists are out combing through mountains of data, straining to glean facts about how the world really works. Economists study gender relations in the workplace, racial gaps, changes in labor contracts, early childhood education, minimum wage policy gaps, automation and the future of jobs and a vast array of other highly important, immediately relevant topics." (Econ Critics are Stuck in the Past, 2018)
Noah Smith:
"You can often exploit quirks of how policies happen or how the real process works to get clean identification." (Noah Smith of Whether Economics is a Science, 2015)
Noah Smith:
"The most important difference with natural experiments is you can't replicate them or repeat because each natural experiment happens only once." (Noah Smith of Whether Economics is a Science, 2015)
Noah Smith:
"If you're going to believe the results of an experiment you always have to make a leap of faith that all the reasonable stuff has been controlled for, right? That the experimenter has good controls and that's an assumption and a leap of faith you have to make in every science experiment." (Noah Smith of Whether Economics is a Science, 2015)
Noah Smith:
"I think the thing about the stimulus is... it's not at all clear. The stimulus was not an actual experiment at all." (Noah Smith of Whether Economics is a Science, 2015)
Noah Smith:
"There are some thunderbolt studies but what's much more common is an accumulated weight of studies that all have consistent results... So don't rely too much on these thunderbolt studies even though sometimes they do exist but they're pretty rare." (Noah Smith of Whether Economics is a Science, 2015)
Noah Smith:
"Macro is the glamour division of econ, but maybe more economists should avoid the glamour and get down in the muck where there are real conclusions to be had." (Econ critique scorecard, 2015)
Noah Smith:
"For centuries, even as chemists and physicists and biologists were constructing labs, 'economists' were still basically writing literary tomes full of speculation and hand-waving." (Is econ a science? On it's good days, yes. 2011)
Noah Smith:
"Quasi-experimental research becomes less reliable the further you move away from the conditions where the experiment happened -- and you don’t even know how fast the reliability vanishes." (Elegant Economic Theories Get Shoved Aside by Data, 2016)
Noah Smith:
"Empirical economists may get things wrong, but at least they come with evidence in hand." (How to Restore Faith in Economics, 2017)
Noah Smith:
"My guess is that econ will be dragged kicking and screaming into the empiricist fold, but will get there in the end." (Data vs. Theory in economics, 2015)
Noah Smith:
"The root problem here is that macroeconomics seems to have no commonly agreed-upon criteria for falsification of hypotheses." ('Science' without falsification is no science, 2012)
Richard Stone:
"The usefulness of observation and measurement in testing economic theories arises because the theorems of economics are supposed to relate to the actual world... Any economic theorem rigorously deduced from given postulates may be regarded as a hypothesis about the actual world which experience may show to be false." (1951, Role of Measurement in Economics)
Vernon Smith
"When the theory performs well you also think, 'Are there parallel results in naturally occurring field data?' You look for coherence across different data sets because theories are not specific to particular data sources. Such extensions are important because theories often make specific assumptions about information and institutions which can be controlled in the laboratory, but which may not accurately represent field data generating situations. Testing theories on the domain of their assumptions is sterile unless it is part of a research program concerned with extending the domain of applications of theory to field environments." (Brainy Quotes)
25. Financial regulation
Robert Engel:
"I agree with a lot of the points in Taleb's book, but I don't agree with many of his conclusions. It seems to me that he rightly points out that risk managers miss a lot of the risks, but the conclusion is that he draws, is that we should abandon risk management, whereas my conclusion is we should improve it." (Brainy Quotes)
Andy Haldane:
"Cycles in money and bank credit are familiar from centuries past and yet for perhaps a generation, the symptoms of this old virus were left untreated... The symptoms should have been all too obvious from history." (What have the economists ever done for us? 2012)
Dani Rodrik:
"Models of self-fulfilling panic (a coordination failure in which individually rational withdrawals of credit lines produce collective irrationality in the form of a systemic drying up of liquidity) were well know to every student of economics." (Economics Rules, 2015)
Dani Rodrik:
"A key pattern in the run up to the crisis was excessive risk taking by managers of financial institutions. Their compensation depended on it, but their behavior was not consistent with the interests of the banks' shareholders. This divergence between the interests of managers and shareholders is a centerpiece of principal-agent models." (Economics Rules, 2015)
Dani Rodrik:
"In sum, economists became overconfident in their preferred models of the moment: markets are efficient, financial innovation improves the risk-return trade-off, self-regulation works best, and government intervention is ineffective and harmful. They forgot about the other models." (Economics Rules, 2015)
Joseph Stiglitz:
"The fall of Wall Street is for market fundamentalism what the fall of the Berlin Wall was for communism." (Interview with the Huffington Post, 2008)
26. Forecasting economics
George Akerlof:
"You usually don't know such vacuums exist. But there's actually a signal that such a black hole does exist because there wasn't anything in the economics profession that was detailing what was going to happen when we got into the great recession." (AEA Publishing and Promotion in Economics, 2017)
"John Cochrane:
"Russ explains with great clarity, just how uncertain [economic] estimates are... Economic history teaches us humility: No economist in 1900 could have figured out what farmers, horse-shoers, ice deliverers, street-sweepers, and so forth would do when those jobs disappeared. The people involved did. Knowledge of our own ignorance is useful." (Russ Roberts on Economic Humility, 2017)
Milton Friedman:
"If we are to use effectively these abstract models and this descriptive material, we must have a comparable exploration of the criteria for determining what abstract model it is best to use for particular kinds of problems, what entities in the abstract model are to be identified with what observable entities, and what features of the problem or of the circumstances have the greatest effect on the accuracy of the predictions yielded by a particular model or theory." (The Methodology of Positive Economics, 1953)
Ragnar Frisch:
"The majority of the economic oscillations which we encounter seem to be explained most plausibly as free oscillations." (Propagation problems and impulse problems in dynamic economics, 1933)
David Glasner:
"In economics the simple predictions that can be accurately made is almost nil because economics is inherently a theory of complex social phenomena and simplifying the real world problems to which we apply the theory to allow testable prediction to be made is extremely difficult and hardly ever possible." (What is so Great about Science? How I Learned to Stop Worrying and Love Metaphysics, 2017)
Lars Peter Hansen:
"I believe that the recent financial crisis exposed gaps in our knowledge." (AEA Webcast. Publishing and Promotion in Economics, 2017)
Oliver Hart:
"I never think that economics provides the full answers to almost anything. This is one of the mistakes people make about economics and in this way they are often disappointed. They ask 'why can't the economists predict the great recession?' I think that's misunderstanding what economics is about. Economics is a helpful tool and there are many problems or questions where having economists give their views on what should be done is going to be extremely helpful. But it doesn't mean you only want to listen to them." (2016, Interview with Oliver Hart)
Robert Johnson:
"In 2009, Jeffrey Sachs said to me 'I feel ashamed to be an economist because I didn't know what a credit default swap was and it proved to be very important.'" (How the Economics of the Economics Profession Resists New Thinking, YouTube 2017)
Daniel Kahneman:
"Most of us view the world as more benign than it really is, our own attributes as more favorable than they truly are, and the goals we adopt as more achievable than they are likely to be. We also tend to exaggerate our ability to forecast the future, which fosters overconfidence. In terms of its consequences for decisions, the optimistic bias may well be the most significant cognitive bias. Because optimistic bias is both a blessing and a risk, you should be both happy and wary if you are temperamentally optimistic." (2001, Bias, Blindness and How We Truly Think)
John Maynard Keynes:
"This 'long run' is a misleading guide to current affairs. In the long run we are all dead. Economists set themselves too easy, too useless a task, if in tempestuous seasons they can only tell us, that when the storm is long past, the ocean is flat again." (A Tract on Monetary Reform, 1923)
Lawrence Klein:
"It is my firm belief that the only satisfactory test of economics is the ability to predict, and in crucial predictive situations such as reconversion after WWII, the settlement of the Korean War, the settlement of the Vietnam War, the abrupt economic policy switch of the Nixon administration in August 1972, the oil shock of 1973 (forecast of a world-wide succession by link), the recession in 1990. In these crucial periods, econometric models outperformed other approaches, yet there is considerable room for improvement, and that is precisely what is being examined in the development of high frequency models that aim to forecast the economy, every week, every fortnight, or every month, depending on the fitness of the information flow." (1980, Lawrence R. Klein Biographical)
Paul Krugman:
"Few economists saw our current crisis coming, but this predictive failure was the least of the field’s problems. More important was the profession’s blindness to the very possibility of catastrophic failures in a market economy." (How Did Economists Get It So Wrong? 2009)
Paul Krugman:
"If you want a simple model for predicting the unemployment rate in the United States over the next few years, here it is: it will be what Greenspan wants it to be, plus or minus a random error reflecting the fact that he is not quite God." (What should trade negotiators negotiate about? 1997)
Finn Kydland:
"I think the biggest challenge is the lack of predictability of government policies. It has different facets. The theory with which I’m associated with is called the inconsistency of optimal government policy, or the time inconsistency, I should say." (Brainy Quotes)
Tony Lawson:
"For most mathematical tools, a precondition for them being useful is that there are correlations. Correlations to be uncovered. Regularities for whenever X then Y." (Confronting Mathematical Models in Economics, YouTube 2014)
Alan Jay Levonovitz
"Unlike engineers and chemists, economists cannot point to concrete objects (cell phones and plastic) to justify their high valuation. They can't even point to the predictive power of their theories. They failed to predict the 2008 crisis." (The New Astrology, 2016)
Michael Lewis:
"In early 2004 another stock market investor, Michael Burry immersed himself for the first time in the bond market... He just sat alone in his office, in San Jose, California and read books and articles and financial filings. He wanted to know, especially how subprime mortgage bonds worked." (The Big Short, 2010)
Michael Lewis:
"He read dozens of prospectuses and scoured hundreds more, looking for the dodgiest pools of mortgages, and was still pretty certain even then (and dead certain later) that he was the only human being on earth who read them, apart from the lawyers who drafted them." (The Big Short, 2010)
Michael Lewis:
"He analyzed the relative importance of the loan-to-value ratios of the home loans, of second liens on the homes, of the location of the homes, of the absence of loan documentation and proof of income of the borrower, and a dozen or so other factors to determine the likelihood that a home loan made in America circa 2005 would go bad." (The Big Short, 2010)
Michael Lewis:
"Burry said, 'I was in a state of perpetual disbelief. I would have thought that someone would have recognized what was coming before June 2007. If it really took that June remit data to cause a sudden realization, well, it makes me wonder what a 'Wall Street analyst' really does all day.'" (The Big Short, 2010)
Dani Rodrik:
"That economists were mostly blind-sided by the crisis is undeniable. Many interpreted this as evidence of a fundamental breakdown in economics... But what makes this episode particularly curious is that there were, in fact, plenty of models to help explain what had been going on under the economy's hood. Bubbles (steady increases in asset prices divorced from their underlying value) are not a new phenomenon." (Economics Rules, 2015)
Paul Samuelson:
"Macroeconomics - even with all of our computers and with all of our information -- is not an exact science and is incapable of being an exact science. It can be better or it can be worse, but there isn't guaranteed predictability in these matters." (Interview with Paul Samuelson, 2007)
William Sharpe:
"From a more theoretical viewpoint, one can focus on the nexus between the present and the future. A financial instrument typically represents a property right to receive future cash flows. Such cash flows will, of course, come in the future – hence the economics of time must be understood. In many cases the flows are uncertain, hence the need for an approach to the economics of uncertainty. In addition, cash flows in the far future may depend on actions taken (or not taken) in the near future. This gives rise to the need for a theory of the economics of options (broadly construed). Finally, one needs information to estimate likely future outcomes, hence the requirement for an understanding of the economics of information. I define financial economics so that it embraces all four of these important, difficult, and fascinating aspects of economics." (1992, Lecture at Trinity University)
Robert Shiller:
"What is the world going to look like in 50 years? I'm worried. It should be a big concern to the profession of economics." (What are the challenges for the next generation? YouTube, 2014)
Jean Tirole:
"Failure to foresee or prevent the financial crisis is a sore reminder of hubris. True enough, we are to work on most of its ingredients but like a virus that keeps mutating, new dangers emerged when we thought we understood and avoided existing ones." (Nobel Banquet 2014 - Speech by Jean Tirole. YouTube)
Jean-Claude Trichet:
"Macro models failed to predict the crisis and seemed incapable of explaining what was happening to the economy in a convincing manner." (Reflections on the nature of monetary policy, non-standard measures and finance theory, 2010)
27. Foreign aid
Kofi Annan:
"The international community... allows nearly 3 billion people - almost half of all humanity - to subsist on $2 or less a day in a world of unprecedented wealth." (Can Globalization Really Solve Our Problems? 2002)
Jimmy Carter:
"Human rights is the soul of our foreign policy, because human rights is the very soul of our sense of nationhood." (Remarks on the 30th anniversary of the Universal Declaration of Human Rights, 1978)
Max Friedman:
"Exclusion from economic gains, making individuals believe that elites are not sharing revenue, may also be another significant factor driving extremism." (Why Current Foreign Aid Benefits Terrorists, 2017)
Tessie San Martin:
"Without reliable data we have no way of understanding the magnitude of a problem or evaluating whether and how our programming is helping to address it." (Amen to accountability in foreign aid, 2017)
Mala Yousafzai:
"Why is it that countries which we call 'strong' are so powerful in creating wars but are so weak in bringing peace? Why is it that giving guns is so easy but giving books is so hard? Why is it that making tanks is so easy, but building schools is so hard?" (Nobel Peace Prize Lecture, 2014)
28. Game theory
Robert Aumann:
"The theory of repeated games is able to account for phenomena such as altruism, cooperation, trust, loyalty, revenge, threats (self-destructive or otherwise) – phenomena that may at first seem irrational – in terms of the “selfish” utility-maximizing paradigm of game theory and neoclassical economics." (2005, War and Peace)
John Harasanyi:
"In principle, every social situation involves strategic interaction among the participants. Thus, one might argue that proper understanding of any social situation would require game-theoretic analysis. But in actual fact, classical economic theory did manage to sidestep the game-theoretic aspects of economic behavior by postulating perfect competition, i.e., by assuming that every buyer and every seller is very small as compared with the size of the relevant markets, so that nobody can significantly affect the existing market prices by his actions." (1997, Games with Incomplete Information)
John Forbes Nash:
"I can observe the game theory is applied very much in economics. Generally, it would be wise to get into the mathematics as much as seems reasonable because the economists who use more mathematics are somehow more respected than those who use less. That's the trend." (Brainy Quotes)
Reinhard Selten:
"Models of bounded rationality describe how a judgement or decision is reached (that is, the heuristic processes or proximal mechanisms) rather than merely the outcome of the decision, and they describe the class of environments in which these heuristics will succeed or fail." (2001, Bounded Rationality)
29. General equilibrium theory
Kenneth Arrow:
"Leon Walras first formulated the state of the economic system at any point of time as the solution of a system of simultaneous equations representing the demand for goods by consumers, the supply of goods by producers and the equilibrium condition that supply equal demand on every market."
(Existence of an equilibrium for a competitive economy, 1954)
Kenneth Arrow:
"I then follow up with four major aspects of economic research in the last 60 years, the period of my scholarly activity. One, econometric methodology and practice, is of such fundamental importance that it cannot go unnoticed, although I played no role in it. With the other three, general equilibrium, dynamic processes, and uncertainty and information, I was more intimately involved." (2009, Some Developments in Economic Theory since 1940: An Eyewitness Account)
Kenneth Arrow:
"The evidence is clear that the development of general equilibrium theory would have gone on quite as it did without me." (November 1984 lecture at Trinity University)
Gerard Debreu:
"I had become interested in economics, an interest that was transformed into a lifetime dedication when I met with the mathematical theory of general economic equilibrium." (1983, The Nobel Prizes)
Ragnar Frisch:
"An important object of the Journal should be the publication of papers dealing with attempts at statistical verification of the laws of economic theory, and further the publication of papers dealing with the purely abstract problems of quantitative economics, such as problems in the quantitative definition of the fundamental concepts of economics and problems in the theory of economic equilibrium. The term equilibrium theory is here interpreted as including both the classical equilibrium theory proceeding on the lines of Walras, Pareto, and Marshall, and the more general equilibrium theory which is now beginning to grow out of the classical equilibrium theory, partly through the influence of the modern study of economic statistics." (A Dynamic Approach to Economic Theory, 1927)
30. Government debt
Thomas Robert Malthus:
"When Hume and Adam Smith prophesied that a little increase of national debt beyond the then amount of it, would probably occasion bankruptcy; the main cause of their error was the natural one, of not being able to see the vast increase of productive power to which the nation would subsequently obtain." (An Essay on the Principle of Population 2nd Edition, 1836)
Adam Smith:
"When national debts have once been accumulated to a certain degree, there is scarce, I believe, a single instance of their having been fairly and completely paid. The liberation of the public revenue, if it has ever been brought about at all, has always been brought about by bankruptcy; sometimes by an avowed one, but always by a real one, though frequently by a pretend payment." (The Wealth of Nations, 1776)
William Vickrey:
"In such a context, it should be clear that balancing a nominal budget will solve nothing, and attempting to achieve such a spurious balance will produce much mischief." (2004, Full Employment and Price Stability)
31. Healthcare
American Medical Student Association:
"If Americans believe in an inalienable right to life, how can we tolerate a system that denies people life-saving medications and treatments?" (The Case for Universal Healthcare, 2009)
Commonwealth Fund:
"Despite having the most expensive health care system, the United States ranks last overall among 11 industrialized countries on measures of health system quality, efficiency, access to care, equity, and healthy lives...'" (US Health System Ranks Last Among Eleven Countries, 2014)
Robert Frank:
"The most important source of cost savings under single-payer is that large government entities are able to negotiate much more favorable terms with service providers." (Why Single-Payer Health Care Saves Money, 2017)
Bernie Sanders:
"The United States must join the rest of the industrialized world and guarantee health care to every man, woman and child through a Medicare for all single-payer system." (Our Revolution, 2016)
Bernie Sanders:
"The United States has thousands of different health insurance plans, all of which set different reimbursement rates across different networks for providers and procedures. This results in extremely high administrative costs." (Our Revolution, 2016)
32. History economics
William Ashley:
"The historical method tries to free their minds at the outset of all priori theories and to see how they actually have been..." (An Introduction to English Economic History, 1888)
Tyler Cowen:
"Overall I find that history and theory laden observation tend to be the forms of evidence which have convinced me the most." (Can economics change your mind, 2016)
Howard Davies
"We all have good reason to be grateful that Ben Bernanke is an expert on the Great Depression..." (Economics in Denial, 2012)
Friedrich Engels:
"The conditions under which men produce and exchange vary from country to country and within each country again from generation to generation. Political economy therefore cannot be the same for all centuries and for all historical epochs." (Anti-Duhring, 1877)
Stanley Fischer:
"I think I've learned as much from studying the history of central banking as I have from knowing the theory of central banking and I advise all of you who want to be central bankers to read the history books." (Humanitas: Stanley Fischer at the University of Oxford Lecture, YouTube 2012)
Robert Fogel:
"Economic history has contributed significantly to the formulation of economic theory. Among the economists who have found history an important source for their ideas are Smith, Malthus, Marx, Marshall, Keynes, Hicks, Arrow, Friedman, Solow, and Becker. Failure to take account of history, as Simon Kuznets (1941) stressed, has often led to a misunderstanding of current economic problems by investigators who have not realized that their generalizations rested upon transient circumstances. Nowhere is the need to recognize the role of long-run dynamics more relevant than in such pressing current issues as medical care, pension policies, and development policies." (1993, Economic Growth, Population Theory, and Physiology)
Paul Krugman:
"But the honest truth is that what drives me as an economist is that economics is fun. I think I understand why so many people think that economics is a boring subject, but they are wrong. On the contrary, there is hardly anything I know that is as exciting as finding that the great events that move history, the forces that determine the destiny of empires and the fate of kings, can sometimes be explained, predicted, or even controlled by a few symbols on a printed page. We all want power, we all want success, but the ultimate reward is the simple joy of understanding." (1995, Incidents from my Career)
Paul Samuelson:
"This is probably a change from what I would have said when I was younger: Have a very healthy respect for the study of economic history, because that's the raw material out of which any of your conjectures or testings will come." (Interview with Paul Samuelson, 2007)
Paul Samuelson:
"My philosophy of scientific method is that it is the empirical reality of history is all important. What we say in the classroom is second." (UBS: Is Economics a Real Science?)
33. Holism economics
George Akerlof:
"There's almost a total disconnect between sociology and economics. But are they always wrong and we always right? Isn't it some combination of the two more likely to be correct and also relevant for the types of situations we as economists tend to look at?" (AEA Publishing and Promotion in Economics, 2017)
Tony Lawson
"In the social realm, all of its components are internally related to everything else." (Confronting Mathematical Models in Economics, YouTube 2014)
Tony Lawson:
"Underneath and grounding our social practices are social structures. For example social rules. This isn't new, but the claim I want to make is these rules are out of phase with our practices." (Confronting Mathematical Models in Economics, YouTube 2014)
Gary Saul Morson, Morton Shapiro
"Economic models (whether mainstream, behavioral or neuro) typically leave out culture because culture cannot be quantified specified in a lab experiment or discovered in neurons." (Cents and Sensibility, 2017)
Paul Samuelson:
"I can claim that in talking about modern economics I am talking about me. My finger has been in every pie. I once claimed to be the last generalist in economics, writing about and teaching such diverse subjects as international trade and econometrics, economic theory and business cycles, demography and labor economics, finance and monopolistic competition, history of doctrines and locational economics." (Lives of laureates, 1985)
Robert Skidelsky:
"Most economics students are not required to study psychology, philosophy, history or politics... They are never given the mental tools to grasp the whole picture." (Economists versus the Economy, 2016)
34. Inequality
Simone Campbell:
"Hard-working people are trying their best, but those who hold on to capital are not sharing the wealth, and there is the problem." (Interviewed by Al Sharpton on Media Matters for America, 2014)
Hillary Clinton:
"Look at the budget that was just proposed in Washington. It is an attack of unimaginable cruelty on the most vulnerable among us, the youngest, the oldest, the poorest, and hard working people who need a little help to gain or hang on to a decent middle class life." (Wellesley commencement speech, 2017)
Barack Obama:
"We don't just want everyone to share in America's success, we want everyone to contribute to our success." (State of the Union Address, 2015)
Barack Obama:
"In a global economy, a country's greatest resource is its people. So by investing in you, this nation can open the door for far more prosperity - because unlocking a nation's potential depends on empowering all its people, especially it's young people." (Yangon University Speech, 2012)
Bernie Sanders:
"[A nation] is judged by how well it treats its weakest a most vulnerable citizens. A truly great nation is one that is filled with compassion and solidarity." (Our Revolution, 2016)
Bernie Sanders:
"In 1979, the top one-tenth of 1 percent owned about 7 percent of the wealth in this country. Now it owns 22 percent." (Our Revolution, 2016)
35. Infrastructure
Thomas Robert Malthus:
"The employment of the poor in roads and public works, and a tendency among landlords and persons of property to build, to improve and beautify their grounds, and to employ workmen and menial servants, are the means most within our power and most directly calculated to remedy the evils arising from that disturbance in the balance of produce and consumption." (An Essay on the Principle of Population 2nd Edition, 1836)
Adam Smith:
"Good roads, canals, and navigable rivers, by diminishing the expense of carriage, put the remote parts of the country more nearly upon a level with those of the neighbourhood of the town. They are upon that the greatest of all improvements." (The Wealth of Nations, 1776)
36. Innovation
Karl Marx:
"The product of mental labor - science - always stands far below its value, because the labor-time necessary to reproduce it has no relation at all to the labor-time required for its original production." (Relative and Absolute Surplus Value, 1861)
Simon Kuznets:
"We need far more empirical study than we have had so far of the universe of inventors; any finding concerning inventors... would be of great value... for public policy in regard to inventive activity." (1962, Understanding the Creativity of Scientists and Entrepreneurs)
Anma Silim:
"The lack of narrative around innovation is one of conventional economic theory's greatest flaws." (What is New Economic Thinking? 2012)
37. International trade
Bertil Ohlin:
"International trade theory has, in my opinion, given far too much attention to the effects of certain variations, for example, in duties, on the national incomes, and too little to the effects on individual incomes. In many cases, changes in the sums count for very little, while changes in the individual incomes are distinctly relevant." (2000, Ohlin versus Stolper-Samuelson)
David Ricardo:
"Under a system of perfectly free commerce, each country naturally devotes its capital and labour to such employments as are most beneficial to each. This pursuit of individual advantage is admirably connected with the with the universal good of the whole. By stimulating industry, by rewarding ingenuity, and by using most efficaciously the peculiar powers bestowed by nature, it distributes labour most effectively and most economically: while, by increasing the general mass of productions, it diffuses general benefit, and binds together, by one common tie of interest and intercourse, the universal society of nations throughout the civilized world." (Principles of Political Economy and Taxation, 1817)
Adam Smith:
"The commodities of Europe were almost all new to America, and many of those of America were new to Europe. A new set of exchanges, therefore, began.. and which should naturally have proved as advantageous to the new, as it certainly did to the old continent." (The Wealth of Nations, 1776)
Unlearning Economics:
"In the realm of international trade, economists have been all too inclined to support trade deals - often quite vociferously on the basis of simple ideas like comparative advantage while ignoring the actual details of the trade details." (No, Criticizing Economics is not Regressive, 2017)
38. Investing
Eugene Fama
"The empirical successes of the three-factor model suggest that it is an equilibrium pricing model, a three-factor version of Merton’s intertemporal CAPM or Ross’s arbitrage pricing theory. In this view, SMB and HML mimic combinations of two underlying risk factors or state variables of special hedging concern to investors." (1993, Common risk factors in the returns on stocks and bonds)
Michael Lewis:
"Burry said, 'I have always believed that a single talented analyst, working very hard, can cover an amazing amount of investment landscape, and this belief remains unchallenged in my mind.'" (The Big Short, 2010)
39. Invisible hand
Adam Smith:
"By preferring the support of domestic to that of foreign industry, he intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention." (The Wealth of Nations, 1776)
Adam Smith:
"Every individual is continually exerting himself to find out the most advantageous employment for whatever capital he can command. It is his own advantage, indeed, and not that of the society, which he has in his view. But the study of his own advantage naturally, or rather necessarily leads him to prefer that employment which is most advantageous to the society." (The Wealth of Nations, 1776)
Adam Smith:
"It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest. We address ourselves, not to their humanity, but to their self-love, and never talk to them of our own necessities, but of their advantages." (The Wealth of Nations, 1776)
Joseph Stiglitz:
"The standard neoclassical model the formal articulation of Adam Smith's invisible hand, the contention that market economies will ensure economic efficiency provides little guidance for the choice of economic systems, since once information imperfections (and the fact that markets are incomplete) are brought into the analysis, as surely they must be, there is no presumption that markets are efficient." (Whither Socialism? 1994)
Joseph Stiglitz:
"The reason that the invisible hand often seems invisible is that it is often not there." (Interview with the International Herald Tribune, 2006)
40. Language economics
Roger Backhouse, Bradley Bateman:
"Government doesn't cut an abstract entity called 'government spending'. It cuts veterans benefits, homeland security and Medicare/Medicaid." (Wanted Worldly Philosophers, New York Times 2011)
Ragnar Frisch:
"We may perhaps start by throwing all kinds of production into one variable, all consumption into another, and so on, imagining that the notions 'production', 'consumption', and so on, can be measured by some sort of total indices. At present certain examples of micro-dynamic analyses have been worked out, but as far as I know no determinate macro-dynamic analysis is yet to be found in the literature." (Propagation problems and impulse problems in dynamic economics, 1933)
John Kenneth Galbraith:
"I have long felt that there's no economic proposition that can't be stated in clear, accessible language." (Booknotes Interview, 1994)
Alfred Marshall:
"There has always been a temptation to classify economic goods in clearly defined groups, about which a number of short and sharp propositions could be made, to gratify at once the student's desire for logical precision, and the popular liking for dogmas that have the air of being profound and are yet easily handled. But great mischief seems to have been done by yielding to this temptation, and drawing broad artificial lines of division where Nature has made none." (Principles of Economics, 1890)
Alfred Marshall:
"Great mischief seems to have been done by... drawing broad artificial lines of division where nature has made none." (Principles of Economics, 1890)
Noah Smith:
"The modern economics profession made a collective decision, long ago, to develop a system of jargon in which words have multiple, sometimes contradictory meanings. Unfortunately, the general public’s reaction tends to be similar to that of poor Alice [in wonderland] ... So econ vocabulary is, to put it bluntly, a dumpster fire." (Economics Builds a Tower of Babel, 2016)
41. Leisure
Thorstein Veblen:
"In itself and in its consequences the life of leisure is beautiful and ennobling in all civilised men's eyes." (The Theory of the Leisure Class, 1899)
Thorstein Veblen:
"In the modern industrial communities... the apparatus of living has grown so elaborate and cumbrous..." (The Theory of the Leisure Class, 1899)
Thorstein Veblen:
"As increased industrial efficiency makes it possible to procure the means of livelihood with less labor, the energies of the industrious members of the community are bent to the compassing of a higher result in conspicuous expenditure, rather than slackened to a more comfortable pace." (The Theory of the Leisure Class, 1899)
42. Libertarianism
Milton Friedman:
"The problem in this world is to avoid concentration of power - we must have a dispersion of power." (YouTube: Big Business, Big Government)
Milton Friedman:
"I say thank God for government waste. If government is doing bad things, it's only the waste that prevents the harm from being greater." (Interview with Richard Heffner on The Open Mind , 1975)
Milton Friedman:
"Governments never learn. Only people learn." (The Cynic's Lexicon : A Dictionary Of Amoral Advice, 1984)
Milton Friedman:
"Society doesn't have values. People have values." (Free to Choose television series, 1980)
43. Mathematical economics
George Akerlof:
"Prior to the early 1960s, economic theorists rarely constructed models customized to capture unique institutions or specific market characteristics." (Brainy Quotes)
Maurice Allais:
"Any author who uses mathematics should always express in ordinary language the meaning of the assumptions he admits, as well as the significance of the results obtained. The more abstract his theory, the more imperative this obligation. In fact, mathematics are and can only be a tool to explore reality. In this exploration, mathematics do not constitute an end in itself, they are and can only be a means." (1997, La formation scientifique, Une communication du Prix Nobel d’économie, Maurice Allais)
Mark Blaug:
"Economists have converted the subject into a sort of social mathematics in which analytical rigor is everything and practical relevance is nothing." (Quoted in Economists Dissing Economics. Unlearning Economics)
Milton Friedman:
"Economics has become increasingly an arcane branch of mathematics rather than dealing with real economic problems." (Quoted in Economists Dissing Economics. Unlearning Economics)
Ragnar Frisch:
"I believe that economic theory has arrived at a point in its development where the appeal to quantitative empirical data has become more necessary than ever. At the same time its analyses have reached a degree of complexity that require the application of a more refined scientific method than that employed by the classical economists." (Quoted in Ragnar Frisch 1895-1995 by O. Bjerkholt)
John Kenneth Galbraith:
"The decisive weakness in neoclassical and neo-Keynesian economics is not the error in the assumptions by which it elides the problem of power. The capacity for erroneous belief is very great, especially where it coincides with convenience. Rather, in eliding power — in making economics a nonpolitical subject — neoclassical theory destroys its relation to the real world. In that world, power is decisive in what happens. And the problems of that world are increasing both in number and in the depth of their social affliction. In consequence, neoclassical and neo-Keynesian economics is relegating its players to the social sidelines where they either call no plays or use the wrong ones. To change the metaphor, they manipulate levers to which no machinery is attached." (Power and the Useful Economist, 1973)
Lars Peter Hansen
"I view the work I've done related to statistics and economics as roughly speaking, how to do something without having to do everything. So economic models - how any model by definition isn't right. When someone just says, 'Oh, your model is wrong.' That's not much of an insight. What you want to know is, is it wrong in important ways or wrong in ways that are less relevant? And you want to know what does the data really say about the model?" (2013, Lars Peter Hansen on imperfect models)
James Heckman:
"Calibrated models are models looking at some stylized facts that are putting together different pieces of data that are not mutually consistent. I mean literally you take estimates of this area, and estimates from that area and you assemble something that's like a Frankenstein..." (EconTalks: James Heckman on Facts, Evidence and the State of Econometrics, 2016)
Bengt Holmstrom:
"Models are sort of like conversation partners. You’re asking questions of the models and the models answer." (2013, Open Markets Evan Peterson)
William Stanley Jevons:
"It is clear that economics, if it is to be a science at all, must be a mathematical science." (The Theory of Political Economy, 1871)
William Stanley Jevons:
"You will perceive that economy, scientifically speaking, is a very contracted science; it is in fact a sort of vague mathematics which calculates the causes and effects of man's industry, and shows how it may be best applied." (Letter to Henrietta Jevons, 1858)
William Stanley Jevons:
"In this work I have attempted to treat economy as a calculus of pleasure and pain, and have sketched out, almost irrespective of previous opinions, the form which the science, as it seems to me, must ultimately take." (The Theory of Political Economy, 1871)
William Stanley Jevons:
"Pleasure and pain are undoubtedly the ultimate objects of the calculus of economics. To satisfy our wants to the utmost with the least effort - to procure the greatest amount of what is desirable at the expense of the least that is undesirable - in other words, to maximize pleasure, is the problem of economics." (The Theory of Political Economy, 1871)
Leonid Kantorovich:
"In our time mathematics has penetrated into economics so solidly, widely and variously and the chosen theme is connected with such a variety of facts and problems that it brings us to cite the words of Kozma Prutkrov which are very popular in our country: 'one can not embrace the unembraceable.'" (1975, Lecture in memory of Alfred Nobel)
John Maynard Keynes:
"Too large a proportion of recent mathematical economics is mere concoctions, as imprecise as the initial assumptions they rest on, which allow the author to lose sight of the complexities and interdependencies of the real world in a maze of pretentious and unhelpful symbols." (Quoted in Economists Dissing Economics, Unlearning Economics)
Tjalling Koopmans:
"We looked upon economic theory as a sequence of conceptual models that seek to express in simplified form different aspects of an always more complicated reality." (Three Essays, 1957)
Paul Krugman:
"As I see it, the economics profession went astray because economists, as a group, mistook beauty, clad in impressive-looking mathematics, for truth." (How Did Economists Get It So Wrong? 2009)
Paul Krugman:
"I do not mean to say that formal economic analysis is worthless, and that anybody's opinion on economic matters is as good as anyone else's. On the contrary! I am a strong believer in the importance of models, which are to our minds what spear-throwers were to stone age arms: they greatly extend the power and range of our insight." (How I Work, 1993)
Paul Krugman:
"The strategy is: always try to express your ideas in the simplest possible model. The act of stripping down to this minimalist model will force you to get to the essence of what you are trying to say (and will also make obvious to you those situations in which you actually have nothing to say). And this minimalist model will then be easy to explain to other economists as well." (How I Work, 1993)
Paul Krugman:
"Many of the stories economists tell take the form of models—for whatever else they are, economic models are stories about how the world works." (Economics 4th edition, 2015)
Paul Krugman:
"Here, then, is a revised version of Marshall's rules: (1) Figure out what you think about an issue, working back and forth among verbal intuition, evidence, and as much math as you need. (2) Stay with it till you are done. (3) Publish the intuition, the math, and the evidence - all three - in an economics journal. (4) But also try to find a way of expressing the idea without the formal apparatus. (5) If you can, publish that where it can do the world some good." (Two Cheers for Formalism, 1998)
Tony Lawson:
"Notice that this does not amount to a rejection of all mathematical-deductive modelling. But it is a rejection of the insistence that we all always and everywhere use it."
(The Nature and State of Modern Economics, 2015)
Tony Lawson:
"Even if the ontology I defend is roughly right, there may yet be pockets of social reality that provide the appropriate conditions for successes when utilizing methods of formalistic modeling, as I regularly acknowledge." (The Nature and State of Modern Economics, 2015)
Tony Lawson:
"I don't want to oppose mathematics in economics. It's the emphasis that mathematics is the proper way to do economics is what I'm critical of." (Really Reorienting Modern Economics, YouTube 2010)
Tony Lawson:
"Mathematics is a tool just like any other. The mathematical deductive systems that economists use are tools and they have conditions under which they are appropriate." (Really Reorienting Modern Economics, YouTube 2010)
Tony Lawson:
"In economics faculties, probably more than 90% of what is taught focuses or employs some form of mathematical modeling." (Confronting Mathematical Models in Economics, YouTube 2014)
Tony Lawson:
"If it's the case you see forms of human behavior that seem to conform, then by all accounts model it mathematically." (What's Wrong with Modern Economics? YouTube 2015)
Tony Lawson;
"When do we get systems of isolated systems in the social realm? Well, people get pretty atomistic when they're in traffic jams. That kind of behavior can probably be modeled mathematically." (Confronting Mathematical Models in Economics, YouTube 2014)
Tony Lawson:
"The use of mathematics to do social analysis is a bit like using a hammer to cut the grass." (What's Wrong with Modern Economics? YouTube 2015)
Robert Lucas:
"Like so many others in my cohort, I internalized its view that if I couldn't formulate a problem in economic theory mathematically, I didn't know what I was doing. I came to the position that mathematical analysis is not one of many ways of doing economic theory. It is the only way. Economic theory is mathematical analysis. Everything else is just picture and talk." (2001, memoir)
Thomas Robert Malthus:
"It has been said, and perhaps with truth, that the conclusions of Political Economy partake more of the certainty of the stricter sciences than those of most of the other branches of human knowledge." (An Essay on the Principle of Population 2nd Edition, 1836)
Alfred Marshall:
"I had a growing feeling in the later years of my work at the subject that a good mathematical theorem dealing with economic hypothesis was very well unlikely to be good economics and I went more and more on the rules - 1. Use mathematics as shorthand language, rather than as an engine of inquiry. 2. Keep to them till you have done. 3. Translate into English. 4. Then illustrate by examples that are important in real life. 5. Burn the mathematics. 6. If you can't succeed in 4, burn 3. This last I do often," (Letter to A. L. Bowley, 1960)
Alfred Marshall:
"The laws of economics are to be compared with the laws of the tides, rather than with the simple and exact law of gravitation. For the actions of men are so variable and uncertain, that the best statement of tendencies, which we can make in a science of human conduct, must needs be inexact and faculty." (Principles of Economics, 1890)
Eric Maskin:
"It’s true that my initial training was in mathematics. However, almost by accident, I happened to take a course from Kenneth Arrow on 'Information Economics' which was so inspiring that I decided to change direction. It seemed to me that economics combined the best of both worlds: the rigor of mathematics with the immediate relevance of a social science. As for how much math I would recommend, I’d say that basic analysis, including measure theory, is certainly very useful. Also, linear algebra and stochastic processes always helps. But beyond that, I don’t think a huge mathematical investment is necessary to do economic theory unless you are planning to work in an extremely technical area." (2013, Interview with Eric S. Maskin: Questions by TSE Students)
Robert Merton:
"The special sphere of finance within economics is the study of allocation and deployment of economic resources, both spatially and across time, in an uncertain environment. To capture the influence and interaction of time and uncertainty effectively requires sophisticated mathematical and computational tools." (Brainy Quotes)
Ludwig von Mises:
"The study of economics has been again and again led astray by the vain idea that economics must proceed according to the pattern of other sciences." (Quoted in Economists Dissing Economics, Unlearning Economics)
Oscar Morgenstern:
"As far as the use of mathematics in economics is concerned, there is an abundance of formulas where such are not needed. The are frequently introduced, one fears, in order to show off. The more difficult the mathematical theorem, the more esoteric the name of the mathematician quotes, the better." (Limits of the Use of Mathematics in Economics, 1963)
Oskar Morgenstern:
"All economic decisions, whether private or business, as well as those involving economic policy, have the characteristic that quantitative and non-quantitative information must be combined into one act of decision. It would be desirable to understand how these two classes of information can best be combined." (Quoted in industrial Planning in France by John McArthur and Bruce Scott)
Oskar Morgenstern:
"...the facts of economic life cannot be comprehensively described in terms of statistics." (Limits of the Use of Mathematics in Economics, 1963
Roger Myerson:
"You have to learn the methods, statistical, theoretical, analytical methods of economics and how can you very, very carefully use those methods to shed a little bit more light on these important questions you feel strongly about... If you do great work in economics it will be because you are using good analytical methodology where you learned the mathematical techniques of the field very, very carefully, you will offer a little bit more clearer way of seeing that offers some clarity, some additional perspective on some much bigger question." (Brainy Quotes)
Gunnar Myrdal:
"The further away a scholarly opinion is from direct observation and the more abstract and ‘theoretical’ it is, the more defenseless it becomes against insidious opportunist errors of judgment. In economics, model thinking in particular creates scope for systematic biases... But of course all social studies must nevertheless aim at generalization. It is thus important to be able to think concretely at the same time, as I learnt from Gustav Cassel." (1982, Role of the economist in public debate)
Edward Prescott
"Economists create their own worlds. We're like little gods with our artificial economics, wanting to see what happens." (Brainy Quotes)
Dani Rodrik:
"[A model's] conclusions are true only to the extent that their critical assumptions approximate reality. When they don't, we need to rely on models with different assumptions." (Economics Rules, 2015)
Dani Rodrik:
"As Stanford economist Paul Pfleiderer explains we always need to apply a 'realism filter' to critical assumptions before a model can be treated as useful." (Economics Rules, 2015)
Dani Rodrik:
Dani Rodrik:
Dani Rodrik:
"In truth, simple models of the type that economists construct are absolutely essential to understanding the workings of society. Their simplicity, formalism, and neglect of many facets of the real world are precisely what make them valuable." (Economics Rules, 2015)
Dani Rodrik:
"What are economic models? The easiest way to understand them is as simplifications designed to show how specific mechanisms work by isolating them from other, confounding effects." (Economics Rules, 2015)
Dani Rodrik:
Dani Rodrik:
Dani Rodrik:
"Math ensured that the elements of a model (the assumptions, behavioral mechanism and main results) are clearly stated and are transparent. Once a model is stated in mathematical form, what it says or does is obvious to all who can read it." (Economics Rules, 2015)
Dani Rodrik:
"[Math] ensures the internal consistency of a model (simply put, that the conclusions follow from the assumptions). (Economics Rules, 2015)
Dani Rodrik:
"Economic models are cases that come with explicit user's guides (teaching notes on how to apply them). That's because they are transparent about their critical assumptions and behavioral mechanisms." (Economics Rules, 2015)
Dani Rodrik:
Dani Rodrik:
Dani Rodrik:
Dani Rodrik:
Dani Rodrik:
"Math plays a purely instrumental role in economic models. In principle, models do not require math, and it is not the math that makes the models useful or scientific." (Economics Rules, 2015)
Dani Rodrik:
"Too many economists fall in love with the math and forget its instrumental nature. Excessive formalization (math for it's own sake) is rampant in the discipline." (Economics Rules, 2015)
Dani Rodrik:
"The profession's stars and most heavily cited economists are those who have shed light on important public problems... not its mathematical wizards." (Economics Rules, 2015)
Dani Rodrik:
"Efforts to construct large-scale economic models have been singularly unproductive to date. To put it even more strongly, I cannot think of an important economic insight that has come out of such models." (Economics Rules, 2015)
Francois Quesnay:
"Calculations are to the economic science what bones are to the human body. Without them it will always be a vague and confused science, at the mercy of error and prejudice." (Letter to Victor Riquetti Mirabeau)
Paul Samuelson:
"To a person of analytical ability, perceptive enough to realize that mathematical equipment was a powerful sword in economics, the world of economics was his or her oyster in 1935. The terrain was strewn with beautiful theorems and begging to be picked up and arranged in unified order." (Brainy Quote)
Paul Samuelson:
"You know the expression in real estate, 'location, location, location'. In prediction it's, 'timing, timing, timing'. Going into present day economics it's, 'math, math, math'. (YouTube: Infinite History Project MIT)
Paul Samuelson:
"Mathematics is just the catalyst that enables you to handle multivariate things." (YouTube: Infinite History Project MIT)
Paul Samuelson:
"You know the expression in real estate, 'location, location, location'. In prediction it's, 'timing, timing, timing'. Going into present day economics it's, 'math, math, math'. (YouTube: Infinite History Project MIT)
Paul Samuelson:
"When Saint Peter admits me into heaven, he's going to ask 'Why did you help make economics so mathematical?' My answer will be, 'Well I couldn't help it.' (YouTube: Infinite History Project MIT)
Paul Samuelson:
"Indeed, until the appearance of the mathematical models there of there is reason to believe that Keynes himself did not truly understand his analysis." (Knowledge and Wealth of Nations by David Warsh)
Jean-Baptiste Say:
"It is, perhaps, a well founded objection to Mr. Ricardo, that he sometimes reasons upon abstract principles to which he gives too great a generalization." (A Treatise on Political Economy, 1832)
Theodore Schultz:
"Human beings are incontestably capital from an abstract and mathematical point of view." (1961, Investment in Human Capital)
Myron Scholes
"All models have faults - that doesn't mean you can't use them as tools for making decisions." (Brainy Quotes)
Lloyd Shapley:
"I'm a mathematician and always have been, as far as I can remember. I don't remember when I first got involved with mathematics, but I think of myself always as a mathematician first." (Brainy Quotes)
Adam Smith:
"I have no great faith in political arithmetic, and I mean not to warrant the exactness of either of these computations." (The Wealth of Nations, 1776)
Noah Smith:
"The problem with Reed's critique, like so many of the others listed above, is that it leaves out much of the story. Auction theory, random-utility models, matching theory, gravity-trade models, and some other mathematical theories have enjoyed enormous quantitative predictive success, sometimes using the neoclassical assumptions of utility maximization and rational action that Reed derides." (Econ Critics are Stuck in the Past, 2018)
Noah Smith:
"[DSGE models] contain so many unrealistic assumptions that they probably have little chance of capturing reality. Their forecasting performance is abysmal... Any rigorous statistical tests tend to reject these models instantly." (Economics Struggles to Cope with Reality, 2016)
Noah Smith:
"Soon, we may even see people insisting in seminars that DSGE models only use assumptions that have been rigorously tested on high-quality micro data! That dream is still far off, but it seems to be getting closer." (Astrologers and macroeconomists, 2016)
Noah Smith:
"As far as I'm aware, private-sector firms don't hire anyone to make DSGE models, implement DSGE models, or even scan the DSGE literature. There are a lot of firms that make macro bets in the finance industry - investment banks, macro hedge funds, bond funds. To my knowledge, none of these firms spends one thin dime on DSGE." (The most damning critique of DSGE, 2014)
Jean-Baptiste Say:
"Some writers maintain arithmetic to be only the only sure guide in political economy; for my part, I see so many detestable systems built upon arithmetical statements, that I am rather inclined to regard that science as the instrument of national calamity." (A Treatise On Political Economy 4th edition, 1832)
Jean-Baptiste Say:
"It is, perhaps, a well founded objection to Mr. Ricardo, that he sometimes reasons upon abstract principles to which he gives too great a generalization." (A Treatise On Political Economy 4th edition, 1832)
Robert Solow:
"Suppose someone sits down where you are sitting right now and announces to me that he is Napoleon Bonaparte. The last thing I want to do with him is to get involved in a technical discussion of cavalry tactics at the Battle of Austerlitz. If I do that, I'm getting tacitly drawn into the game that he is Napoleon Bonaparte. Now, Bob Lucas and Tom Sargent like nothing better than to get drawn into technical discussions, because then you have tacitly gone along with their fundamental assumptions; your attention is attracted away from the basic weakness of the whole story. Since I find that fundamental framework ludicrous, I respond by treating it as ludicrous – that is, by laughing at it – so as not to fall into the trap of taking it seriously and passing on to matters of technique." (1983, Conversations with Economists)
Jan Tinbergen:
"Models constitute a framework or a skeleton and the flesh and blood will have to be added by a lot of common sense and knowledge of details." (The Use of Models: Experience, 1969)
Jan Tinbergen:
"First of all I want to remind you of the essential features of models. In my opinion they are: (i) drawing up a list of the variables to be considered; (ii) drawing up a list of the equations or relations the variables have to obey and (iii) testing the validity of the equations, which implies the estimation of their coefficients, if any. As a consequence of especially (iii) we may have to revise (i) and (ii) so as to arrive at a satisfactory degree of realism of the theory embodied in the model." (The Use of the Models." (The Use of Models: Experience, 1969)
44. Mechanism design
Leonid Hurwicz
"Traditionally, economic analysis treats the economic system as one of the givens. The term "design" in the title is meant to stress that the structure of the economic system is to be regarded as an unknown. An unknown in what problem? Typically that of finding a system that would be, in a sense to be specified, superior to the existing one. The idea of searching for a better system is at least as ancient as Plato’s Republic, but it is only recently that tools have become available for a systematic, analytical approach to such search procedures. This new approach refuses to accept the institutional status quo of a particular time and place as the only legitimate object of interest and yet recognizes constraints that disqualify naive Utopias." (1973, The designs of mechanisms for resource allocations)
45. Microeconomics
Thomas Schelling:
"What this book is about is a kind of analysis that is characteristic of a large part of the social sciences, especially the more theoretical part. That kind of analysis explores the relation between the behavior of individuals who compromise some social aggregate, and the characteristics of the aggregate. These situations, in which people's behavior or people's choices depend on the behavior or choices of other people, are the ones that usually don't permit any simple summation or extrapolation of the aggregates. To make that connection we usually have to look at the system of interaction between individuals and their environment, that is, between individuals and other individuals or between individuals and the collectivity." (1978, Micromotives and Microbehavior)
46. Money
Karl Marx:
"Money does not arise by convention, any more than the state does. It arises out of exchange, and arises naturally out of exchange; it is a product of the same." (Grundrisse, 1857)
Karl Marx:
"The circulation of commodities is the original precondition of the circulation of money." (Grundrisse, 1857)
Jean-Baptiste Say:
"I have made no distinction between the circulation of goods and of money, because there really is none." (A Treatise On Political Economy 4th edition, 1832)
47. Money supply
Robert Mundell:
"I have never believed that central banks should have rigid inflation targeting. That is not a good thing to stabilize. There is nothing in economic theory to back this." (Brainy Quotes)
Milton Friedman:
"Inflation is always and everywhere a monetary phenomenon in the sense that it is and can be produced only by a more rapid increase in the quantity of money than in output." (The Counter-Revolution in Monetary Theory, 1970)
Milton Friedman:
"I know of no severe depression, in any country or any time, that was not accompanied by a sharp decline in the stock of money and equally of no sharp decline in the stock of money that was not accompanied by a severe depression." (Money Masters, 1995)
Milton Friedman:
"The Federal Reserve definitely caused the Great Depression by contracting the amount of money in circulation by one-third from 1929 to 1933." (National Public Radio Interview, 1995)
Milton Friedman:
"The use of quantity of money as a target has not been a success. I'm not sure that I would as of today push it as hard as I once did." (Quoted in the Financial Times, 2003)
Milton Friedman:
"Over short periods, the relation between growth in money and growth in nominal income is often hard to see." (Money Mischief, 1992)
James Meade:
"My interest in economics had the following roots. Like many of my generation I considered the heavy unemployment in the United Kingdom in the inter-war period as both stupid and wicked. Moreover, I knew the cure for this evil, because I had become a disciple of the monetary crank, Major C.H. Douglas, to whose works I had been introduced by a much loved but somewhat eccentric maiden aunt. But my shift to the serious study of economics gradually weakened my belief in C.H. Douglas's A+B theorem, which was replaced in my thought by the expression MV = PT." (2003, James E. Meade - Biographical)
48. Monopolies
Henry George:
"When land is all monopolized, as it is everywhere except in the newest communities, rent must drive wages down to the point at which the poorest paid class will he just able to live and reproduce, and thus wages are forced to a minimum fixed by what is called the standard of comfort."
Adam Smith:
"People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices. It is impossible indeed to prevent such meetings, by any law which either could be executed, or would be consistent with liberty or justice. But though the law cannot hinder people of the same trade from sometimes assembling together, it ought to do nothing to facilitate such assemblies; much less to render them necessary." (The Wealth of Nations, 1776)
Adam Smith:
"To give the monopoly of the home-market to the produce of domestic industry, in any particular art or manufacture, is in some measure to direct private people in what manner they ought to employ their capitals, and must, in almost all cases, be either a useless or a hurtful regulation." (The Wealth of Nations, 1776)
Adam Smith:
"Monopoly of one kind or another, indeed, seems to be the sole engine of the mercantile system." (The Wealth of Nations, 1776)
49. Nobel Prize in economics
Friedrich Hayek:
"I must confess that if I had been consulted whether to establish a Nobel Prize in economics, I should have decidedly advised against it... The Nobel Prize confers on an individual an authority which in economics no man ought to possess." (Nobel Banquet Speech, 1974)
Noah Smith:
"In econ, though, un-validated theories - even empirically unsuccessful theories - do sometimes get Nobel prizes, especially in macro." (Economists don't have 'physics envy', 2015)
50. Normative economics
Angus Deaton
"Economists focus on income, public health scholars focus on mortality and morbidity, and demographers focus on births, deaths, and the size of populations. All of these factors contribute to wellbeing, but none of them is wellbeing." (2013, The Great Escape)
Friedrich Hayek:
"I have arrived at the conviction that the neglect by economists to discuss seriously what is really the crucial problem of our time is due to a certain timidity about soiling their hands by going from purely scientific questions into value questions. This is a belief deliberately maintained by the other side because if they admitted that the issue is not a scientific question, they would have to admit that their science is antiquated and that, in academic circles, it occupies the position of astrology and not one that has any justification for serious consideration in scientific discussion." (1978, Conversation at the American Enterprise Institute)
Tony Lawson:
"The goal is to see the structures that condition human interaction and identify those we don't want... Identify the structures that stand in the way to human flourishing." (What's Wrong with Modern Economics? YouTube 2015)
Dale Mortensen:
"Economics is a strange science. Our subject deals with some of the most important as well as mundane issues that impinge on the human condition." (Brainy Quotes)
51. Ontology economics
Tony Lawson:
"...the materials and principles of social reality are the same across economics, sociology, politics, anthropology, human geography and all other disciplines concerned with the study of social life." (The Nature and State of Modern Economics, 2015)
Tony Lawson:
"Most people responded to the crisis in economics by putting forward new theories, new policies, new models. What is missing is philosophical discussion." (What's Wrong with Modern Economics? YouTube 2015)
Tony Lawson:
"I'm going to suggest to you that [philosophical discussion] is fundamental. In fact all the problems of the discipline are basically ontological. The orientation of the discipline ought to be ontological as it is in physics, chemistry, biology and almost everything else." (What's Wrong with Modern Economics? YouTube 2015)
Tony Lawson:
"When you look to the physical realm, they don't really start with methods. They start with ontology. If they want to look at a planet far away, they build a telescope. If they want to check a theory about the nature of mass and they need to check out Higgs boson, they build an electron accelerator." (What's Wrong with Modern Economics? YouTube 2015)
Tony Lawson
"With ontology, we can get an insight to what sort of methods might be useful for [economics]." (Really Reorienting Modern Economics, YouTube 2010)
Tony Lawson:
"I'd like to state a case for ontology: the study of being. The study of nature and reality." (Really Reorienting Modern Economics, YouTube 2010)
Tony Lawson:
"Closed systems are those in which correlations and event regularities occur and the ontology that is sufficient for it is a world of isolated atoms and that seems to be the implicit ontology of economics for the last 50 years." (Confronting Mathematical Models in Economics, YouTube 2014)
Christopher Sims:
"There isn't much political coloration in my economic writing; it's not surprising that few people know my political views. They really aren't very important." (Brainy Quotes)
Noah Smith:
"So what seems to unite the new heavyweight macro critics is an emphasis on realism... even the people advocating for more realism acknowledge that there's some ideal middle ground. But if Romer, Kocherlakota, etc. are to be believed, macroeconomists aren't currently close to that optimal interior solution." (The new heavyweight macro critics, 2016)
52. Optimization
Kenneth Arrow:
"The formal structure of a decision problem in any area can be put into four parts: 1. the choice of an objective function denning the relative desirability of different outcomes; 2. specification of the policy alternatives which are available to the agent, or decisionmaker, 3. specification of the model, that is, empirical relations that link the objective function, or the variables that enter into it, with the policy alternatives and possibly other variables; and 4. computational methods for choosing among the policy alternatives that one which performs best as measured by the objective function." (The Economics of Information , 1984)
Kenneth Arrow: "It is worth pointing out that in this particular study our authors have abandoned demand and supply functions as a tool for analysis, even as applied to individuals... [The problem] has been reformulated as one of proving that a number of maximizations of individual goals under interdependent restraints can be simultaneously carried out." (Three Essays, 1957)
Herbert Simon:
"Modem mainstream economic theory bravely assumes that people make their decisions in such a way as to maximize their utility. Accepting this assumption enables economics to predict a great deal of behavior (correctly or incorrectly) without ever making empirical studies of human actors." (1990, Invariants of Human Behavior)
Richard Thaler:
"The core premise of economic theory is that people choose by optimizing." (Misbehaving: The Making of Behavioral Economics)
53. Pluralism economics
John Maynard Keynes:
"Good economists are scarce because the gift for using 'vigilant observation' to choose good models, although it does not require a highly specialised intellectual technique, appears to be a very rare one." (Letter to Roy Harrod, 1933)
Tony Lawson:
"I think pluralism is the right message. Pluralism isn't saying you're wrong. Pluralism is saying all voices ought to be listened to." (What's Wrong with Modern Economics? YouTube 2015)
Tony Lawson:
"Pluralism can't mean, or isn't very useful if it means anything goes. I take it pluralism means open to others... but it doesn't mean every theory is as good as every other theory." (What's Wrong with Modern Economics? YouTube 2015)
Dani Rodrik:
"Rather than a single, specific model, economics encompasses a collection of models. The discipline advances by expanding its library of models and by improving the mapping between these models and the real world. The diversity of models in economics is the necessary counterpart to the flexibility of the social world." (Economics Rules, 2015)
Dani Rodrik:
"In part because economists take the natural sciences as their example, they have a tendency to misuse their models. They are prone to mistake a model for the model, relevant and applicable under all circumstances." (Economics Rules, 2015)
Dani Rodrik:
"Many of the complaints are well known: economics is simplistic and insular; it makes universal claims that ignore the role of culture, history and other background conditions; it reifies the market; it is full of implicit value judgments; and besides, it fails to explain and predict the developments in the economy. Each of these criticisms derives in large part from a failure to recognize that economics is, in fact a collection of diverse models that do not have a particular ideological bent..." (Economics Rules, 2015)
Dani Rodrik:
"Many of the complaints are well known: economics is simplistic and insular; it makes universal claims that ignore the role of culture, history and other background conditions; it reifies the market; it is full of implicit value judgments; and besides, it fails to explain and predict the developments in the economy. Each of these criticisms derives in large part from a failure to recognize that economics is, in fact a collection of diverse models that do not have a particular ideological bent..." (Economics Rules, 2015)
Dani Rodrik:
"Knowledge accumulates in economics not vertically, with better models replacing worse ones, but horizontally with newer models explaining aspects of social outcomes that were unaddressed earlier." (Economics Rules, 2015)
Dani Rodrik:
"In the end, it was clear that no single theory could fully explain the story of the U.S. inequality since the 1970's. Nor was there a good way of parsing the relative contributions of different theories. Certain theories (models) gave us a better understanding of the channels through which trade, technology and other factors may have operated. The failure of other theories allowed us to rule out mechanisms that appeared equally plausible at the outset. There was no closure, but there was plenty of learning along the way." (Economics Rules, 2015)
Dani Rodrik:
"Today it is almost a mantra for development economists, finance experts, and international agencies that no single set of policies is appropriate for all countries that domestic reforms must be tailored to specific circumstances." (Economics Rules, 2015)
Dani Rodrik:
"Freshly minted PhD's come out of graduate school with a large inventory of models but virtually no formal training (no course work, no assignments, no problem sets) in how to choose among them." (Economics Rules, 2015)
Dani Rodrik:
"Eventually, we developed a decision tree that helped us navigate across potential models... We would start at the top of the tree by asking whether the constraints on investment were mainly on the supply side or on the demand side... At each node of the decision tree, we tried to develop informal empirical tests to help us select among models that would send us down different paths." (Economics Rules, 2015)
Oliver Williamson:
"For those who, like myself, are inclined to be eclectic, no comprehensive commitment to one approach rather than another needs to be made. What is involved, rather, is the selection of the approach best suited to deal with the problems at hand.” (1975, Markets and Hierarchy)
54. Population
Thomas Robert Malthus:
"Population, when unchecked, increases in a geometrical ratio, Subsistence, increases only in an arithmetical ratio." (An Essay on the Principle of Population, 1798)
Thomas Robert Malthus:
"The perpetual tendency of the race of man to increase beyond the means of subsistence is one of the general laws of animated nature, which we can have no reason to expect to change." (An Essay on the Principle of Population, 1798)
55. Poverty
John Kenneth Galbraith:
"We can safely abandon the doctrine of the eighties, namely that the rich were not working because they had too little money, the poor because they had much." (Quoted in the Guardian, 1991)
John Kenneth Galbraith:
"In recent times no problem has been more puzzling to thoughtful people than why, in a troubled world, we make such poor use of our affluence." (The Affluent Society, 1958)
John Kenneth Galbraith:
"The drive toward complex technical achievement offers a clue to why the US is good at space gadgetry and bad at slum problems." (Quoted in The Saturday Evening Post, 1968)
John Kenneth Galbraith:
"The modern conservative is engaged in one of man's oldest exercises in moral philosophy; that is, the search for a superior moral justification for selfishness." (Interview with Rupert Cornwell, 2002)
Henry George:
"It is true that disappointment has followed disappointment, and that discovery upon discovery, and invention after invention, have neither lessened the toil of those who most need respite, nor brought plenty to the poor." (Progress and Poverty, 1879)
Henry George:
"There is, and always has been, a widespread belief among the more comfortable classes that the poverty and suffering of the masses are due to their lack of industry, frugality, and intelligence. This belief, which at once soothes the sense of responsibility and flatters by its suggestion of superiority, is probably even more prevalent in countries like the United States..."
Thomas Robert Malthus:
"To remedy the frequent distresses of the common people, the poor laws of England have been instituted; but it is to be feared that though they may have alleviated a little the intensity of individual misfortune, they have spread the general evil over a much larger surface." (An Essay on the Principle of Population, 1798)
Thomas Robert Malthus:
"The laboring poor, to use a vulgar expression, seem always to live from hand to mouth. Their present wants employ their whole attention, and they seldom think of the future. Even when they have an opportunity of saving they seldom exercise it, but all that is beyond their present necessities goes, generally speaking, to the ale house." (An Essay on the Principle of Population, 1798)
Robert Owen:
"The advantage of pure, and the disadvantage of impure air are experienced each time we breathe, and all who understand the causes of disease know that an impure atmosphere is most unfavourable to the enjoyment of health, and an efficient cause to shorten human existence within the natural life of man. It is therefore most desirable that decisive measures should be devised and generally adopted to ensure to all a pure atmosphere, in which to live during their lives." (The Book of the New Moral World, 1836)
Robert Owen:
"What ideas individuals may attach to the term 'Millennium' I know not; but I know that society may be formed so as to exist without crime, without poverty, with health greatly improved, with little, if any misery, and with intelligence and happiness increased a hundredfold; and no obstacle whatsoever intervenes at this moment except ignorance to prevent such a state of society from becoming universal." (Address to the Inhabitants of New Lanark, 1816)
Bernie Sanders:
"Study after study has shown that without stable housing it is much harder for working people to hold down jobs and get the health care they need, and children are put at a profound disadvantage in terms of intellectual and emotional development and school performance... Decent-quality affordable housing should be a right of all Americans." (Our Revolution, 2016)
Adam Smith:
"No society can surely be flourishing and happy, of which the greater part of the members are poor and miserable. It is but equity, besides, that they who feed, cloath and lodge the whole body of the people, should have such a share of the produce of their own labour as to be themselves tolerably well fed, clothed, and lodged." (The Wealth of Nations, 1776)
56. Price theory
Milton Friedman:
"The price system works so well, so efficiently, that we are not aware of it most of the time. We never realize how well it functions until it is prevented from functioning, and even then we seldom recognize the source of the trouble." (Free to Choose, 1980)
Friedrich Hayek:
"The misconception that costs determined prices prevented economists for a long time from recognizing that it was prices which operated as the indispensable signals telling producers what costs it was worth expending on the production of the various commodities and services, and not the other way around. It was the costs which they had expended which determined the prices of things produced... It was this crucial insight which finally broke through and established itself about a hundred years ago through the so-called marginal revolution in economics." (Coping with Ignorance, 1978)
Friedrich Hayek:
"I don't know what monetarism is... If it means the particular version of Milton Friedman, I think it has because he imagines that he can achieve - ascertain - a clear quantity relationship between a measurable quantity of money and the price level. I don't think that is possible." (Interview with F. A. Hayek, 1983)
William Stanley Jevons:
"Repeated reflection and inquiry have led me to the somewhat novel opinion, that value depends entirely upon utility." (The Theory of Political Economy, 1871)
David Ricardo:
"Utility then is not the measure of exchangeable value, although it is absolutely essential to it." (Principles of Political Economy and Taxation, 1817)
David Ricardo:
"Adam Smith, and other able writers to whom I have alluded, not having viewed correctly the principles of rent, have, it appears to me, overlooked many important truths, which can only be discovered after the subject of rent is thoroughly understood." (Principles of Political Economy and Taxation, 1817)
David Ricardo:
"Possessing utility, commodities derive their exchangeable value from two sources: from their scarcity, and from the quantity of labour required to obtain them." (Principles of Political Economy and Taxation, 1817)
David Ricardo:
"Rent is that portion of the produce of the earth which is paid to the landlord for the use of the original and indestructible powers of the soil." (Principles of Political Economy and Taxation, 1817)
Jean-Baptiste Say:
"Demand and supply are the opposite extremes of the beam, whence depend the scales of dearness and cheapness; the price is the point of equilibrium, where the momentum of the one ceases, and that of the other begins." (A Treatise On Political Economy 4th edition, 1832)
Jean-Baptiste Say:
"A man who applies his labour to the investing of objects with value by the creation of utility of some sort, can not expect such a value to be appreciated and paid for, unless where other men have the means of purchasing it. Now, of what do these means consist? Of other values of other products, likewise the fruits of industry, capital, and land. Which leads us to a conclusion that may at first appear paradoxical, namely, that it is production which opens a demand for products." (A Treatise On Political Economy 4th edition, 1832)
Adam Smith:
"The value of any commodity, therefore, to the person who possesses it, and who means not to use or consume it himself, but to exchange it for other commodities, is equal to the quantity of labour which it enables him to purchase or command. Labour, therefore, is the real measure of the exchangeable value of all commodities." (The Wealth of Nations, 1776)
Adam Smith:
"The value which the workmen add to the materials, therefore, resolves itself in this case into two parts, of which the one pays their wages, the other the profits of the employer upon the whole stock of materials and wages which he advanced." (The Wealth of Nations, 1776)
Adam Smith:
"It is the natural effect of improvement, however, to diminish gradually the real price of almost all manufactures." (The Wealth of Nations, 1776)
Noah Smith:
"New Keynesian theory, which is the academic idea most beloved of central banks around the world, has failed to explain Japan's lack of inflation... Japan offers a clear object lesson that macroeconomic theory is very, very hard to get right." (An Economics Lab where Theories Go to Die, 2016)
57. Private property
Ludwig von Mises:
"If historical experience could teach us anything, it would be that private property is inextricably linked with civilization." (Human Action, 1949)
Douglass North:
"The first economic revolution was not a revolution because it shifted man's major economic activity from hunting and gathering to settled agriculture. It was a revolution because the transition created an incentive change for mankind of fundamental proportions. The incentive change stems from the different property rights under the two systems. When common property rights over resources exist, there is little incentive for the acquisition of superior technology and learning. In contrast, exclusive property rights which reward the owners provide a direct incentive to improve efficiency and productivity, or, in more fundamental terms, to acquire more knowledge and new techniques. It is this change in incentive that explains the rapid progress made by mankind in the last 10,000 years in contrast to his slow development during the long era as a primitive hunter/gatherer." (1990, Economic Behavior and Institutions)
"As soon as the land of any country has all become private property, the landlords, like all other men, love to reap where they never sowed, and demand a rent even for its natural produce." (The Wealth of Nations, 1776)
Adam Smith:
"Civil government, so far as it is instituted for the security of property, is in reality instituted for the defence of the rich against the poor, or of those who have some property against those who have none at all." (The Wealth of Nations, 1776)
58. Public choice theory
1986: James M. Buchanan
"Public choice did not emerge from some profoundly new insight, some new discovery, some social science miracle. Public choice, in its basic insights into the workings of politics, in corporates an understanding of human nature that differs little, if at all, from that of James Madison and his colleagues at the time of the American Founding." (Brainy Quotes)
59. Rational expectations
Gary Becker:
"Still, intuitive assumptions about behavior is only the starting point of systematic analysis, for alone they do not yield many interesting implications." (Brainy Quotes)
Paul Krugman:
"When it comes to the all-too-human problem of recessions and depressions, economists need to abandon the neat but wrong solution of assuming that everyone is rational and markets work perfectly." (Economics 4th edition, 2015)
Thomas Sargent:
"My recollection is that Bob Lucas and Ed Prescott were initially very enthusiastic about rational expectations econometrics. After all, it simply involved imposing on ourselves the same high standards we had criticized the Keynesians for failing to live up to. But after about five years of doing likelihood ratio tests on rational expectations models, I recall Bob Lucas and Ed Prescott both telling me that those tests were rejecting too many good models." (2005, Interview with Thomas Sargent)
60. Reason in economics
William Stanley Jevons:
"I protest against deference to any man, whether John Stuart Mill, or Adam Smith, or Aristotle, being allowed to check inquiry. Our science has become far too much a stagnant one, in which opinions rather than experience and reason are appealed to." (The Theory of Political Economy, 1871)
Robert Johnson:
Rob Johnson:
"The tribal practice of what constitutes valid evidence and not can influence what people will study and leave aside." (How the Economics of the Economics Profession Resists New Thinking. YouTube, 2017)
Paul Krugman:
"We’re living in a Dark Age of macroeconomics. Remember, what defined the Dark Ages wasn’t the fact that they were primitive — the Bronze Age was primitive, too. What made the Dark Ages dark was the fact that so much knowledge had been lost, that so much known to the Greeks and Romans had been forgotten by the barbarian kingdoms that followed." (A Dark Age of Macroeconomics, 2009)
Tony Lawson:
"If the situation is one in which two or three mechanisms or tendencies are thought to dominate a phenomenon of interest, perhaps a range of likely outcomes can be safely speculated." (The Nature and State of Modern Economics, 2015)
Tony Lawson:
"The essence of science is this move from phenomenon of interest to underlying cause. We can do this in the social realm because it's structured. We can go practices of interest to underlying cause. Practices bound up with poverty, crisis, whatever to underlying causes. This move is as open to us in economics as it is in any science." (Really Reorienting Modern Economics, YouTube 2010)
Ed Leamer:
"All we have, especially in macro is opinions and their either persuasive and well thought out or not." (EconTalks: Ed Leamer on the State of Econometrics)
Andrew Lo
50. "From an ecological perspective, I know it's hard to not make value judgments but as a scientist what we might want to do is first study the ecosystem, measure all of the various different species and their biomasses and look at mating rituals and behaviors. And once you actually map out all of these relationships, you can then decide what you want to do with the information." (Adaptive Markets: Financial Evolution at the Speed of Light, YouTube 2017)
Franco Modigliani:
"Economists agree about economics - and that's a science - and they disagree about economic policy because that's a value judgment... I've had profound disagreements on policy with the famous Milton Friedman. But, on economics, we agree." (Brainy Quotes)
Gary Saul Morson, Morton Shapiro:
"Aristotle long ago pointed out, one needs a fundamentally different sort of reasoning inasmuch as actual cases have features no theory can anticipate. One needs judgement, wisdom and experience. In practical reasoning, one begins with a deep understanding of the specific situation and reasons from there." (Cents and Sensibility, 2017)
Adam Ozimek:
"I think the research comes out and looks at slightly different angles and adjusts for slightly different mechanisms and we know so much more about the minimum wage than we did 10 years ago... If you look at the literature closely it doesn't look like a draw where two sides just lob evidence back and forth. It looks like progress to me." (EconTalks: Adam Ozimek on the Power of Econometrics and Data, 2016)
Noah Smith:
"The alternative to empiricism in economics is not agnostic humility, but intuitionism - the idea that we can know about the world by thinking about how it works, and that exposure to evidence will only pollute the truths that we divine from our own minds. And that's something I think economists need to avoid." (Anti-empiricism is not humility, 2017)
61. Regulations
Milton Friedman:
"We need government to enforce the rules of the game. By prosecuting anti-trust violations, for instance. We need a government to maintain a system of courts that will uphold contracts and rule on compensation for damages. We need a government to ensure the safety of its citizens–to provide police protection." (Playboy Interview with Milton Friedman, 1973)
Milton Friedman:
"The proper role of government is exactly what John Stuart Mill said in the middle of the 19th century in On Liberty. The proper role of government is to prevent other people from harming an individual." (America's Drug Forum Interview, 1991)
Milton Friedman:
"The only effective cure is to reduce the scope of government - get government out of the business." (YouTube: Big Business, Big Government)
Milton Friedman:
"The unions might be good for the people who are in the unions but it doesn't do a thing for the people who are unemployed. Because the union keeps down the number of jobs, it doesn't do a thing for them." (Interview with Brian Lamb, 2000)
Dani Rodrik:
"Verbal arguments that seem intuitive often collapse or are revealed to be incomplete under closer mathematical scrutiny. The reason is that 'verbal models' can ignore nonobvious but potentially significant interactions." (Economics Rules, 2015)
Adam Smith:
"To expect, indeed, that the freedom of trade should ever be entirely restored in Great Britain, is as absurd as to expect that an Oceana or Utopia should never be established in it." (The Wealth of Nations, 1776)
Adam Smith:
"The proposal of any new law or regulation of commerce which comes from this order, ought always to be listened to with great precaution, and ought never to be adopted till after having been long and carefully examined, not only with the most scrupulous, but with the most suspicious attention. It comes from an order of men, whose interest is never exactly the same with that of the public, who have generally an interest to deceive and even to oppress the public, and who accordingly have, upon many occasions, both deceived and oppressed it." (The Wealth of Nations, 1776)
Adam Smith:
"He seems to imagine that he can arrange the different members of a great society with as much ease as the hand arranges the different pieces upon a chess-board. He does not consider that the pieces upon the chess-board have no other principle of motion besides that which the hand impresses upon them; but that, in the great chess-board of human society, every single piece has a principle of motion of its own, altogether different from that which the legislature might choose to impress upon it. If those two principles coincide and act in the same direction, the game of human society will go on easily and harmoniously, and is very likely to be happy and successful. If they are opposite or different, the game will go on miserably, and the society must be at all times in the highest degree of disorder." (Theory of Moral Sentiments, 1759)
Adam Smith:
"Our merchants and master-manufacturers complain much of the bad effects of high wages in raising the price, and thereby lessening the sale of their goods both at home and abroad. They say nothing concerning the bad effects of high profits. They are silent with regard to the pernicious effects of their own gains. They complain only of those of other people." (The Wealth of Nations, 1776)
Joseph Stiglitz:
"The free market policies were never based on solid empirical and theoretical foundations, and even as many of these policies were being pushed, academic economists were explaining the limitations of markets - for instance, whenever information is imperfect, which is to say always." (2007, Bleakonomics)
Jean Tirole:
"Since then, however, the Industrial Organization field has undergone rapid development, indeed a revolution. This revolution has greatly enhanced our understanding of imperfectly competitive markets, which in turn has laid a foundation for better informed competition policy. Comparable progress has been made in the theory of optimal regulation of firms with market power." (2014, Market Power and Regulation)
62. Simulation economics
Harry Markowitz
"During the 1950s, I decided, as did many others, that many practical problems were beyond analytic solution and that simulation techniques were required. At RAND, I participated in the building of large logistics simulation models; at General Electric, I helped build models of manufacturing plants." (Brainy Quotes)
63. Slavery
Adam Smith:
"It appears, accordingly, from the experience of all ages and nations, I believe, that the work done by freemen comes cheaper in the end than that performed by slaves." (The Wealth of Nations, 1776)
64. Social contract theory
Milton Friedman:
"Because we live in a largely free society, we tend to forget how limited is the span of time and the part of the globe for which there has ever been anything like political freedom: the typical state of mankind is tyranny, servitude, and misery." (Capitalism and Freedom, 1962)
Tony Lawson:
"Social reality is made up of communities where the components are often human beings and the rights, obligations and positions is what holds it together." (Confronting Mathematical Models in Economics, YouTube 2014)
John Locke:
"[I am] lover of his king and country, a lover of peace and the protestant interest... [Consent] is absolutely necessary to the very being and subsistence of our government and without which our peace and religion cannot possibly be any way secured..." (Letter to Edward Clarke, 1690)
65. Social security
Bernie Sanders:
"When people become old, they often become frail and sick. They are unable to work and earn an income. In a civilized society, the older generation - the people who raised us - are entitled, and allowed, to live out their remaining years in dignity and security." (Our Revolution, 2016)
66. Sustainable technology
Bill Gates:
"The only reason I'm optimistic about [renewable energy] is because of innovation... I want to tilt the odds in our favor by driving innovation at an unnaturally high pace, or more than its current business-as-usual course." (We Need an Energy Miracle, 2015)
Bill Nye:
"Desalination of water could be the key to the future for so may of us humans... We could have all the clean water we wanted for everybody all over the world and we would power pumps with solar power..." (Big Think: Can We Desalinate Water for Human Consumption on a Massive Scale? 2016)
Bernie Sanders:
"This is the stuff we do so well when challenged as a nation, whether by putting a man on the moon, eradicating diseases, or developing the Internet. The U.S. can and must dedicate our engineering know-how to a clean energy revolution, in our universities, in our national energy labs, and in businesses and communities all across the country." (Our Revolution, 2016)
Annie Sneed:
"To limit warming, nations will also likely need to physically remove carbon from the atmosphere. And to do that, they will have to deploy 'negative emissions technology' - technologies that scrub CO2 out of the air." (The Search Is on for Pulling Carbon from the Air, 2016)
67. Taxation
Milton Friedman:
"I am in favor of cutting taxes under any circumstances and for any excuse, for any reason, whenever it's possible... because I believe the big problem is not taxes, the big problem is spending. I believe our government is too large and intrusive, that we do not get our money's worth..." (Quoted in Conservatives Betrayed, 2006)
Milton Friedman:
"If I spend somebody else’s money on somebody else, I’m not concerned about how much it is, and I’m not concerned about what I get. And that’s government." (Interview on Fox News, 2004)
Milton Friedman:
"What are the least bad taxes? In my opinion the least bad tax is the property tax on the unimproved value of land, the Henry George argument of many, many years ago." (Quoted in The Times Herald, Norristown, Pennsylvania, 1978)
Henry George:
"The tax upon land values is, therefore, the most just and equal of all taxes. It falls only upon those who receive from society a peculiar and valuable benefit, and upon them in proportion to the benefit they receive. It is the taking by the community, for the use of the community, of that value which is the creation of the community."
Gwynn Guilford:
"Cutting taxes on America's rich isn't going to encourage them to invest more - they already have plenty to spend and aren't spending it. Worse, by shifting wealth from middle class families to the moneyed few - a group that is able to consume far less than the working masses - this sort of policy suppresses consumption, which in turn discourages investment in productive businesses." (Almost everything Republicans get wrong about the economy started with a cocktail napkin in 1974, 2017)
Thomas Hungerford:
"The results of the analysis suggest that changes over the past 65 years in the top marginal tax rate and the top capital gains tax rate do not appear correlated with economic growth [in the United States]. The reduction in the top tax rates appears to be uncorrelated with saving, investment, and productivity growth. The top tax rates appear to have little or no relation to the size of the economic pie." (Taxes and the Economy: An Economic Analysis of the Top Tax Rates Since 1945, 2012)
Thomas Hungerford:
"The top marginal rate in the 1950s was over 90 percent and the real GDP growth rate averaged 4.2 percent and the real per capita GDP increased annually by 2.4 percent in the 1950s." (Taxes and the Economy: An Economic Analysis of the Top Tax Rates Since 1945, 2012)
Alana Semuels:
"[In the United States] between 1935 and 1982, the top tax rate did not dip below 70 percent. Part of this was due to a belief among those in charge that government had a role in combating extreme wealth." (Is the U.S. Due for Radically Raising Taxes for the Rich? 2016)
Adam Smith:
"The tax which each individual is bound to pay ought to be certain, and not arbitrary." (The Wealth of Nations, 1776)
Adam Smith:
"It is not very unreasonable that the rich should contribute to the public expense, not only in proportion to their revenue, but something more than in that proportion." (The Wealth of Nations, 1776)
68. Understanding in economics
Ronald Coase
"But a theory is not like an airline or bus timetable. We are not interested simply in the accuracy of its predictions. A theory also serves as a base for thinking. It helps us to understand what is going on by enabling us to organize our thoughts. Faced with a choice between a theory which predicts well but gives us little insight into how the system works and one which gives us this insight but predicts badly, I would choose the latter, and I am inclined to think that most economists would do the same." (1981, How should economists choose?)
Tony Lawson:
"...it is clear that the recent crisis situation (like almost any social situation) is something that needs to be understood rather than modeled." (The Nature and State of Modern Economics, 2015)
Tony Lawson:
"Of course, the details of the recent period are complex, and a full understanding requires, amongst other things, a detailed analysis of the numerous structural transformations in the financial sector during this period..." (The Nature and State of Modern Economics, 2015)
Tony Lawson:
"However, I should emphasise that explanatory analysis required to render any chosen contrast phenomenon of interest intelligible can take many forms. It may involve the identification of a hitherto non-existent local mechanism or set of conditions, or a reworking of previous understandings, including seeing connections or relations previously unnoticed, or even the elaboration of a highly abstract account of the workings of a system in its entirety. It all depends on context." (The Nature and State of Modern Economics, 2015)
Oskar Morgenstern:
"At the present time there is an unmistakable tendency to consider only a contribution to mathematical economics as a contributions of value. Hence a certain craving to press everything into some mathematical form... This preoccupation appears to me to be unnecessary and possibly dangerous." (Limits of the Use of Mathematics in Economics, 1963)
Brad Voracek:
"While today's experts hold prestigious positions, their understanding of math is often greater than their understanding of the economy. As the 2008 recession demonstrated, the majority of current experts didn't get things right." (Ending the Econocracy: The Need for Pluralism in Economics, 2017)
69. Utilitarianism
William Stanley Jevons:
"My principal work now lies in tracing out the exact nature and conditions of utility. It seems strange indeed that economists have not bestowed more minute attention on a subject which doubtless furnishes the true key to the problems of economics." (The Theory of Political Economy, 1871)
Francois Quesnay:
"To secure the greatest amount of pleasure with the least possible outlay should be the aim of all economic effort... when everyone does this the natural order, instead of being endangered, will be all the better assured." (Quoted in Economics Modern Business by Vassie and Chadburn)
70. Utopia
Thomas More:
"The island of Utopia is in the middle two hundred miles broad, and holds almost at the same breadth over a great part of it, but it grows narrower towards both ends... The channel is known only to the natives; so that if any stranger should enter into the bay without one of their pilots he would run great danger of shipwreck." (Utopia, 1516)
Thomas More:
"They have no lawyers among them, for they consider them as a sort of people whose profession it is to disguise matters and to wrest the laws, and, therefore, they think it is much better that every man should plead his own cause, and trust it to the judge, as in other places the client trusts it to a counsellor; by this means they both cut off many delays and find out truth more certainly." (Utopia, 1516)
Thomas More:
"They have but few laws, and such is their constitution that they need not many. They very much condemn other nations whose laws, together with the commentaries on them, swell up to so many volumes; for they think it an unreasonable thing to oblige men to obey a body of laws that are both of such a bulk, and so dark as not to be read and understood by every one of the subjects." (Utopia, 1516)
71. Wealth
John Kenneth Galbraith:
"In recent times, no problem has been more puzzling to thoughtful people than why, in a troubled world, we make such poor use of our affluence." (The Affluent Society, 1958)
Bernie Sanders:
"How many times have you heard the refrain, 'America is broke'? Baloney... in reality, we are the richest country in the world, and we are richer than at any other time in history. The U.S. has a record-breaking $88 trillion in total wealth... " (Our Revolution, 2016)
72. Welfare economics
Kenneth Arrow:
"While economic theory in general may be defined as the theory of how an economic condition or an economic development is determined within an institutional framework, the welfare theory deals with how to judge whether one condition can be said to be better in some way than another and whether it is possible, by altering the institutional framework, to achieve a better condition than the present one." (Nobel Lectures, Economics 1972)
73. What is economics?
Thomas Adams, Richard Ely, Max Lorenz, Allyn Young:
"[Economics is] the wealth-getting and wealth-using activities of man." (Outlines of Economics 4th edition, 1926)
Robin Bade, Michael Parkin:
"[Economics is the] social science that studies the choices that individual, business, government and entire societies make as they cope with scarcity." (Foundations of Microeconomics, 2002)
Gary Becker:
"[Economics is] the study of allocation of scarce means to satisfy competing ends." (Economic Theory, 1971)
James M. Buchanan:
"[Economics is] the study of the whole system of exchange relationships."
David Colander:
"Economics is the study of how human beings coordinate their wants and desires, given the decision-making mechanisms, social customs and political realities of the society." (Microeconomics 6th edition, 2006)
Milton Friedman:
"[Economics is] the science of how a particular society solves its economic problems... an economic problem exists whenever scarce means are used to satisfy alternative ends." (Price Theory: A Provisional Text, 1962)
James Gwartney, David MacPherson, Russell Sobel, Richard Stroup:
"Economics is the study of human behavior with a particular focus on human decision-making." (Microeconomics: Private and Public Choice 11th edition, 2006)
Tjalling Koopmans:
"One is led to conclude that economics as a scientific discipline is still somewhat hanging in the air." (Three Essays, 1957)
William Stanley Jevons:
"Among minor alterations, I may mention the substitution for the name political economy of the single convenient term economics. I cannot help thinking that it would be well to discard, as quickly as possible, the old troublesome double-worded name of our science." (The Theory of Political Economy, 1871)
Thomas Robert Malthus:
"The science of political economy is essentially practical, and applicable to the common business of human life. There are few branches of human knowledge where false views may do more harm, or just views more good." (An Essay on the Principle of Population 2nd Edition, 1836)
Greg Mankiw:
"Economics is the study of how society manages its resources." (Principles of Economics 2nd edition, 2001)
Alfred Marshall:
"Though a simple book can be written in selected topics, the central doctrines of economics are not simple and cannot be made so." (AZ Quotes)
Alfred Marshall:
"Political economy or economics is a study of mankind in the ordinary business of life. It examines that part of individual and social action which is most closely connected with the attainment and with the use of the material requisites of well-being... thus it is on the one side a study of wealth and on the other, and more important side, a part of the study of man." (Principles of Political Economy, 1890)
Carl Menger:
"[Economics] is related to the practical activities of economizing men." (Principles of Economics, 1871)
John Stuart Mill:
Happily, there is nothing in the laws of value for the present writer or any future to clear up; the theory of the subject is complete. (Quoted in Knowledge and the Wealth of Nations by David Warsh)
John Stuart Mill:
"[Political economy] is the science which traces the laws of such of the phenomena of society as arise from the combined operations of mankind for the production of wealth in so far as those phenomena are not modified by the pursuit of any other object." (On the definition of Political Economy, 1867)
Lionel Robbins:
"[Economics is] the science which studies human behavior as a relationship between ends and scarce means which have alternative uses." (Essay on the Nature and Significance of Economic Science, 1932)
Paul Samuelson:
"Economics is the study of how people and society end up choosing with or without the use of money to employ scarce productive resources that could have alternative uses, to produce various commodities and distribute them for consumption, now or in the future, among various persons and groups in society. It analyzes the costs and benefits of improving patterns of resource allocation." (Economics 10th edition, 1976)
Jean-Baptiste Say:
"[Political economy is] the science of production, distribution and consumption of wealth." (A Treatise on Political Economy, 1803)
Summer Slichter:
"The subject matter of economics is industry; the process by which men get a living... economics studies industry, not as a technological process, but as a complex of human practices and relationships." (Modern Economic Society, 1931)
Adam Smith:
"Political economy, considered as a branch of the science of a statesman or legislator, proposes two distinct objects: first, to provide a plentiful revenue or subsistence for the people, or more properly to enable them to provide such a revenue or subsistence for themselves; and secondly, to supply the state or commonwealth with a revenue sufficient for the public services. It proposes to enrich both the people and the sovereign." (The Wealth of Nations, 1776)
Adam Smith:
"[Economics is] the nature and causes of the wealth of nations." (The Wealth of Nations, 1776)
George Stigler:
"[Economics is] the study of the principles governing the allocation of scarce resources among competing ends when the objective of the allocation is to maximize the attainment of the ends." (The Theory of Competitive Price, 1942)
Jacob Viner:
"Economics is what economists do." (Quoted by Kenneth Boulding in Economic Analysis, 1941)
74. World government
Jan Tinbergen:
Mankind’s problems can no longer be solved by national governments. What is needed is a World Government. This can best be achieved by strengthening the United Nations system." (Human Development Report 1994 by the United Nations)
Jan Tinbergen:
"Some of the most important new institutions would be financial- a World Treasury and a World Central Bank. Just as each nation has a system of income redistribution, so there should be a corresponding ‘World Financial Policy’ to be implemented by the World Bank and the World Central Bank." (Human Development Report 1994 by the United Nations)
Jan Tinbergen:
"Some of these proposals are, no doubt, far-fetched and beyond the horizon of today’s political possibilities. But the idealist of today often turns out to be the realists of tomorrow." (Human Development Report 1994 by the United Nations)
