It is a conjunction of a bunch of themes he has touched on in the last few weeks, including the great debt debate and categorization.
I asked him:
In your previous post, you advocated adopting the most "useful" way of dividing up the world into categories. But what does that mean? Useful in terms of teaching students, reaching the layman, articulating theory amongst other economists, calculating statistics, conducting policy?The last bit about mathematics reminds me of an exchange I had with Daniel Kuehn a while back about the use of words and math in economics.
Are you saying that economists should have multiple "categorical universes" in their head? Or is their "one ring to rule them all" way of dividing up the universe that you are trying to tease out?
One useful reason for having one standardized way of splitting the world into categories is it makes conversation easier. Having multiple ways adds subtlety but confusion.
I am learning that the core of economics (or at least near to it) is about words. We create meanings for things in the real world using some of our existing words, and this creates categories, but since other words can also be used to create similiar-though-not-overlapping categories, we have to choose between categories. This process comes prior to mathematical econ, since the math needs categories like C and I before mathematical phrases can be put together.
Here is Nick's response:
I'm not sure on the answers to all your questions. Even if we all agreed on what the true theories were, we might want one theory for one purpose and a different theory for another purpose. And each theory would have its own most useful set of categories.I can't disagree with him. Is this an argument in favor of heterodox economic? After all, entire schools can form around a divergent way of categorizing the world. Should economists be fluent in multiple economic viewpoints? The blogosphere is surely a great place for that. Actually, this reminds me of a recent Perry Mehrling post on which I participated. Here is Mehrling:
Yep, it might make conversation harder. But maybe some conversations would be impossible if we had to stick to one set of categories that didn't fit the topic at hand.
...it is important to emphasize that each of these heterodox schools exist, and persist, because it is organized around some essentially correct insight about how the banking system works... The problem is that, so far as I can see, each of the heterodox schools has part of the truth, not the whole thing. The same could be said about the orthodoxy against which the heterodox schools define themselves... We don't therefore want to choose which school to belong to; rather we want to determine which of these correct insights provides the most useful explanatory frame for whatever issue is currently at hand. Today it might be one; tomorrow it might be another. That is what the debate is about, or should be anyway.See an earlier and related post.