Professor Mark J. Perry's Blog for Economics and Finance
When you can measure what you are speaking about, and express it in numbers, you know something about it. But when you cannot measure it, when you cannot express it in numbers, your knowledge is of a meager and unsatisfactory kind: it may be the beginning of knowledge, but you have scarcely, in your thoughts, advanced to the stage of science, whatever the
Dr. Mark J. Perry is a professor of economics and finance in the School of Management at the Flint campus of the University of Michigan. Perry holds two graduate degrees in economics (M.A. and Ph.D.) from George Mason University near Washington, D.C. In addition, he holds an MBA degree in finance from the Curtis L. Carlson School of Management at the University of Minnesota. In addition to a faculty appointment at the University of Michigan-Flint, Perry is also a visiting scholar at The American Enterprise Institute in Washington, D.C.
5 Comments:
What about things like confidence and trust? Aren't those things very important to our economic system? And yet aren't those things difficult to measure quantitatively?
I quote the committee hearing that took place right after the Panic of 1907 during which JP Morgan testified:
"Congressman: Is not commercial credit based primarily upon money or property?
Morgan: No, sir. The first thing is character.
Untermyer: Before money or property?
Morgan: Before money or anything else. Money cannot buy it ... a man I do not trust could not get money from me on all the bonds in Christendom."
We cannot measure trust, but we know it is important. Banking is an industry built on trust and government should be ready to provide trust in the role of "lender of last resort" when trust is missing from the system.
Machiavelli,
read the damn quote. Lord Kelvin is not saying that unquantifiable things are not important. He's saying that if you can not quantify something, then your knowledge about it is limited and unscientific.
It underscores why it's so hard for the government to "fix" the current crisis. If we can not measure things like trust then how can the government articulate a fiscal plan to restore it?
I think meaningless math is mesmerizing, and is the conman's best tool. Just because you can spout a bunch of figures and equations does not in any way indicate that you have a comprehension of what they mean. "General Theory" to the point!
"Just because you can spout a bunch of figures and equations does not in any way indicate that you have a comprehension of what they mean"...
In other words if YOU can't understand the arithmetic that accuarately describes subject then just go ahead and ignore it...
Dang those pesky facts!
> I think meaningless math is mesmerizing,
That's because you don't grasp math.
If you can't put it in mathematical terms, it's not Science, it's Opinion (or Religion).
It's easy to pull the wool over someone's eyes by faking the math, if that person accepts the math unverified.
That's not a flaw in math, it's a flaw in how people take assurances of validity.
As the saying goes:
Tell a man that there are 300 billion stars in the universe, and he'll believe you.... Tell him that a bench has wet paint upon it and he'll have to touch it to be sure.
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