Is This What Economists Dream of Being? | Mark Corner | TEDxKULeuvenBrussels

Quick Overview

The speaker argues that economists, unlike hard scientists like Newton or Halley, often fail to predict major economic crises, suggesting that the reliance on mathematical models creates a complacent certainty that misses the inherent randomness and uncertainty in human behavior, which a historian might better grasp.

Key Points: The speaker contrasts economists with hard scientists like Isaac Newton and Edmond Halley, noting that Newton accurately predicted Halley's Comet's return, while economists failed to predict the 2008 financial crisis. Economists often rely on complex mathematical formulas and models that assume human behavior is rational and organized, overlooking inherent randomness and uncertainty. The speaker references an article about 'The Economist in a Lab Coat' to illustrate the trend of increasing mathematical emphasis in economics. The speaker recounts a personal anecdote about his children's nanny, who was more effective at predicting the return of Halley's Comet than the economists were at predicting the financial crisis. The speaker suggests that economists are often unable to make predictions about human behavior (like when a comet will return or when a financial crisis will occur) with the same certainty as natural scientists predict physical events. The speaker concludes that economists must accept the inherent uncertainty in human affairs, which is often better understood by historians than by mathematicians. The speaker jokingly suggests that economists should be taught chaos theory and perhaps even hire a ski instructor or a personal chef to better understand human decision-making, contrasting this with the Queen of England's long reign and the expectation of predictability.

Context: Mark Corner delivers this TEDx talk at TEDxKULeuvenBrussels, using the theme of 'Organized Chaos' to question the reliance on overly complex and deterministic mathematical models in modern economics. He contrasts the predictable success of natural science predictions (like Newton predicting Halley's Comet) with the repeated failures of economists to foresee major events like the 2008 financial crisis, suggesting a fundamental flaw in their discipline's approach to human uncertainty.