Location: Hyderabad, Andhra Pradesh, India

Wednesday, May 17, 2006

A Call for a "One World Forum"

Arun Maria, Chairman, Boston Consulting Group has written an enlightening piece on Economics and the focus that it must take, you might as well check. Click here.

Some excerpts:

Economists tend to over-simplify their assumptions to enable mathematical modelling. For example, The Economist says, “Measuring profits is fairly straightforward; measuring environmental protection and social justice is not. The difficulty is partly that there is no single yardstick...How is any given success for environmental action to be weighed against any given advance in social justice, or, against any given change in profits? Measuring profits—the good old single bottom line—offers a pretty clear test of business success.”

This is sheer intellectual laziness.

In his book, Complexity, M Mitchell Waldrop describes a meeting between physicists and economists (with Nobel Prize winners on both sides) at the Santa Fe Institute some years ago. “As axioms, theorems and proofs marched across the projection screen, the physicists could only be awestruck at (the economists) mathematical prowess —awestruck and appalled. “They were almost too good,” says one, who remembers shaking his head in disbelief. “It seemed as though they were dazzling themselves with fancy mathematics, until they couldn’t see the forest for the trees—I thought they often weren’t looking at what the models were for, and what they did, and whether the assumptions were any good. In a lot of cases, what was required was just common sense.”


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