Econophysics; Rothschilds

From: NDCS
Sent: Wednesday, January 04, 2017 2:17 PM
To: Walter Block
Subject: Re: Question about
Good afternoon, Professor Block.
First of all, I want to wish you a Happy New Year. I would like to ask you about two things that have aroused my interest:
1. What do you think about “Econophysics”?
2. Is the House of Rothschild an example of talent and endeavor, virtues highly prized in capitalism, or, on the contrary, is its wealth the result of concessions granted by the State?
Thank you so much. NDCS

Dear NDCS: I think the Rothschilds did both. They were both crony capitalists, and also good capitalists. Econophysics is a combination, mainly, of mathematics and economics. As an Austrian economist, I think we already have far too much math in econ. Here are some readings on that:

As Ludwig von Mises put it:
As a method of economic analysis econometrics is a childish play with figures that does not contribute anything to the elucidation of the problems of economic reality.-The Ultimate Foundation of Economic Science p. 63

As there are in the field of social affairs no constant relations between magnitudes, no measurement is possible and economics can never become quantitative.-The Theory of Money and Credit p. 460

Austrian economists who object to the hyper-mathematicalization of the dismal science include: Anderson, 2001, 2002; Barnett, 2003, 2004; Barnett and Block, 2006, 2010; Bratland, 2000; Bylund, 2011; Callahan, 2001; Cachanosky, 1985, 1986; Hazlitt, 1959; Herbener, 1996; Hutt, 1979; Jablecki, 2007; Kirzner, 1990; Leoni and Frola, 1977; Menger, 1973; Mises, 1977, 1998; Murphy, 2008; Murphy, Wutscher and Block, 2010; Reekie, 1984A, 1984B; Rizzo, 1979; Ropke, 1956; Rothbard, 1960, 1976, 1988, 1993, 2011A, 2011B; Shostak, 2002; Spadaro, 1956; Wutscher, unpublished.

Anderson, William. 2001. “The Limits of Mathematics” November 29
http://www.mises.org/story/839

Anderson, William. 2002. “Mathematics and Economic Analysis.” April 02.
http://www.mises.org/story/926

Barnett, William II. 2003. “The Modern Theory of Consumer Behavior: Ordinal or Cardinal?” The Quarterly Journal of Austrian Economics. 6 (1): 41 − 65; http://www.qjae.org/journals/qjae/pdf/qjae6_1_3.pdf

Barnett II, William. 2004. “Dimensions and Economics: Some Problems.” Quarterly Journal of Austrian Economics. Spring. Vol. 7, No. 1, pp. 95-104; http://www.mises.org/journals/qjae/pdf/qjae6_3_2.pdf;
http://www.mises.org/journals/qjae/pdf/qjae7_1_10.pdf

Barnett, William II, and Walter E. Block. 2006. “Rothbard on V shaped average and
total cost curves.” Quarterly Journal of Austrian Economics, Vol. 9, No. 3, Fall, pp. 61-66; http://mises.org/journals/qjae/pdf/qjae9_3_4.pdf

Barnett, William and Walter E. Block. 2010. “Mises never used demand curves; was he wrong? Ignorant? No: The Antimathematicality of Demand Curves.” Dialogue, Vol. 1, pp. 23-31; March; http://www.uni-svishtov.bg/dialog/2010/1.10.WB.pdf

Brätland, John. 2000. “Human Action and Socially Optimal Conservation: A Misesian Inquiry into the Hotelling Principle.” The Quarterly Journal of Austrian Economics 3, no. 1: 3-26; http://mises.org/journals/qjae/pdf/qjae3_1_1.pdf

Bylund, Per. 2011. “The ‘Mystery’ of the Endowment Effect.” December 28; http://mises.org/daily/5839/The-Mystery-of-the-Endowment-Effect

Callahan, Gene. 2001. “Logical Economics vs. Mathematical Economics ” February 17;
http://www.mises.org/story/616

Cachanosky, J. C. 1985. La Ciencia Economica vs. La Economia Matematica I. (“The pitfalls of Mathematical Analysis in Economics”). Libertas, 3(Octubre). Issue: http://www.eseade.edu.ar/riim/indice42.asp?ID=47
Article: http://www.eseade.edu.ar/servicios/Libertas/47_6_Cachanosky.pdf
http://www.eseade.edu.ar/servicios/Libertas/47_6_Cachanosky.pdf

Cachanosky, J. C. 1986. La Ciencia Economica vs. La Economia Matematica II. (“The pitfalls of Mathematical Analysis in Economics”) Libertas, 4(Mayo). Issue: http://www.eseade.edu.ar/riim/indice42.asp?ID=46
Article: http://www.eseade.edu.ar/servicios/Libertas/46_4_Cachanosky.pdf; http://www.eseade.edu.ar/servicios/Libertas/46_4_Cachanosky.pdf

Hazlitt, Henry, 1959. The Failure of the “New Economics,” (New Rochelle, NY: Arlington House); See especially pp. 98-106.

Herbener, Jeffrey M. 1996. “Calculation and the Question of Mathematics,” Review of Austrian Economics, 9(1), pp. 151-162

Hutt, W. H. 1979. The Keynesian Episode: A Reassessment, (Indianapolis, IN: Liberty Press); See pp. 99-103.

Jablecki , Juliusz. 2007. “How Many Traders Can You Fit into a Model? August 23;
http://www.mises.org/story/2646

Kirzner, Israel M. 1990. “The ‘Austrian’ Perspective on the Crisis.” Austrian Economics, Vol. 1, Edward Elgar, 191-202

Leoni, Bruno, and Frola, Eugenio. 1977. “On mathematical thinking in economics,” The Journal of Libertarian Studies, Vol. 1, No. 2, Spring, pp. 101-110

Menger, Karl. 1973. “Austrian Marginalism and Mathematical Economics,” Carl Menger and the Austrian School of Economics. J.R. Hicks and Wilhelm Weber, eds., Oxford: Clarenden Press.

Mises, Ludwig von. 1977. “Comments about the mathematical treatment of economic problems,” The Journal of Libertarian Studies, Vol. 1, No. 2, Spring, pp. 97-100

Mises, Ludwig von. [1949] 1998. Human Action, Scholars’ Edition. Auburn: Mises Institute.
http://www.mises.org/humanaction/pdf/HumanActionScholars.pdf; http://mises.org/resources/3250 vvv

Murphy, Robert P. 2008. “Austrian Realists.” July 17; http://mises.org/story/3028

Murphy, Robert P., Robert Wutscher and Walter E. Block. 2010. “Mathematics in Economics: An Austrian Methodological Critique.” Philosophical Investigations, January, Vol. 33, No 1, pp. 44-66; http://www3.interscience.wiley.com/cgi-bin/fulltext/123209256/PDFSTART

Reekie, W. Duncan. 1984A. “The Austrain Response at a Micro Level.” Markets, Entrepreneurs, and Liberty, Wheatsheaf Books, pp. 27-55

Reekie, W. Duncan. 1984B The Austrian Macro Retort.” Markets, Entrepreneurs, and Liberty, Wheatsheaf Books, pp. 56-84

Rizzo, Mario. 1979. “Praxeology and Econometrics: A Critique of Positivist Economics,” New Directions in Austrian Economics, Louis Spadaro, ed., Kansas City: Sheed Andrews and McMeel, pp. 40-56

Ropke, Wilhelm, 1956. “The Place of Economics Among the Sciences,” in On Freedom and Free Enterprise, Mary Sennholz ed, (Princeton, NJ: D. Van Nostrand Co.) pp. 111-127.

Rothbard, Murray [1960] 1997. “The Mantle of Science,” in The Logic of Action One (Cheltenham, UK: Edward Elgar), pp. 3-23. Originally published in Scientism and Values, Helmut Schoek and James W Wiggins, eds.

Rothbard, Murray [1976] 1997.“Praxeology: The Methodology of Austrian Economics,” in The Logic of Action One (Cheltenham, UK: Edward Elgar), pp. 58¬-77. Originally published in The Foundations of Modern Austrian Economics, Edwin Dolan, ed.

Rothbard, Murray N. 1988. “Chaos Theory: Destroying Mathematical Economics from Within?” The Free Market. Vol. VI, No. 3; http://www.mises.org/freemarket_detail.asp?control=296

Rothbard, Murray N. 1993. Man, Economy, and State, 2 vols., Auburn, AL: Ludwig von Mises Institute
Rothbard, Murray N. 2011A. “Daniel Bernoulli and the Founding of Mathematical Economics.” February 10; http://mises.org/daily/4941/Daniel-Bernoulli-and-the-Founding-of-Mathematical-Economics
Rothbard, Murray N. 2011B. “Praxeology: the Methodology of Austrian economics.” Chapter 4 in Economic Controversies. Auburn, AL: Mises Institute
http://library.mises.org/books/Murray%20N%20Rothbard/Economic%20Controversies.pdf
https://mises.org/store/Economic-Controversies-P10459.aspx

Shostak, Frank. 2002. “What is Wrong with econometrics?” April 17.
http://www.mises.org/story/940

Spadaro, Louis M. 1956. “Averages and Aggregates in Economics,” in On Freedom and Free Enterprise, Mary Sennholz ed, (Princeton, NJ: D. Van Nostrand Co.) pp. 140-60.

Wutscher, Robert. Unpublished. “Foundations in economic methodology: The use of mathematics by mainstream economics and its methodology by Austrian economics.”
http://www.mises.org/journals/scholar/Wutscher.pdf

All of the above are on economic method in general, but contain critiques of mathematical economics.

There are even some economists not usually associated with the Austrian School who also oppose the hyper-mathematicalization of economics: Boulding, 1971; Champion, 2008; Dolan, 1976; Ingrao and Israel, 1990; Ischboldin, 1960; Mirowski, 1988

Boulding, Kenneth E. “After Samuelson, Who Needs Adam Smith?” History of Political Economy, Fall, Vol. 3, No. 2, 225-237

Champion, Rafe. 2008. “The Rise of Mathematical Economics.”
http://www.the-rathouse.com/2008/Ingrao-Israel.html

Dolan, Edwin. 1976. “Austrian Economics as Extraordinary Science.” The Foundations of Modern Austrian Economics, Sheed & Ward, Inc., pp. 3-18

Ingrao, Bruna and Giorgio Israel The Invisible Hand: Economic Equilibrium in the History of Science, translated by Ian McGilvray, the MIT Press, Cambridge and London 1990 (orig 1987).

Ischboldin, Boris, 1960. “A critique of econometrics,” Review of Social Economy, Vol. 18, No, 2, September

Mirowski, Philip. 1988. Against Mechanism: Protecting Economics from Science. Rowman & Littlefield

http://www.loyno.edu/~wbarnett/math.php?search=&field=title&sort=title

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