Math, Engineering, and the Evolution of Economics

"Why Economics after Engineering?" was one common question people often asked after I left my engineering profession to study for a master's in economics. Therefore, this article aims to show the vast number of people from engineering and other fields who turned to economics and founded its basic structure. For that, I will briefly delve deep into the evolution of economic thought and show that some of the most revered economists were not economists initially. This exposes where many attempts to build economics as "the mechanics of utility and self-interest" originate.

The emergence of the standardised study of economics as a distinct discipline may be traced back to the seventeenth and eighteenth centuries when Europe underwent many radical changes in how its commodity production was organised. However, references to issues now commonly attributed to economic problems were already present from classical antiquity to the Middle Ages. From Plato, Aristotle, Xenophon, or Kautilya in classical antiquity to the various schools of thought throughout the later periods, including the Patristic Thought consisting of Christian thinkers until the eleventh century, the Scholastics in the twelfth and thirteenth centuries, and the Bullionists and Mercantalists in the seventeenth century, all analysed one or more of the limited economic challenges before them. The great leap happened when the study of all sciences and techniques was hugely impacted by the significant discoveries in natural sciences, from Galileo's contributions in astronomy to the discovery of blood circulation by Harvey, from Newton's physics to Lavoisier's quantitative chemistry. Economics was heavily affected by it, thus shifting it from a combined study of morals to a more "scientific" plane.

William Petty, often regarded as the founder of the political economy, was in charge of this endeavour. After retiring from his services, a medical practitioner by qualification who studied anatomy along with Thomas Hobbes spent hours formalising and exploring the various economic affairs at his Irish estates. Petty naturally used his medical expertise to theorise the economic phenomenon and came up with a political and anatomical analogy: just as blood circulates throughout the human body, so do we now have the circularity problems in economics concerning the realisation of prices of production. Though economics underwent many transformations from Petty's "Body Politic" to the time of classical economists, they were not exclusively economists either. For instance, this period saw philosophers like David Hume and John Locke, physicians like Francois Quesnay, and doctors like Richard Cantillon and Bernard de Mandeville study, debate, and write on economics to lay some of its now widely accepted foundations.

This evolution finally culminated in the works of Adam Smith, who is credited with bringing up the "conceptual scheme that characterised subsequent economic science". Smith was not an economist but a logic, theology, philosophy, and ethics professor. Gradually, owing to the works of Malthus, Say, Sismondi, Bentham, and Ricardo, political economy was now officially raised as a field of study. Consequently, in 1754, the first chair in political economy was established in Naples for the first time in history. Gradually, universities across Europe followed this trend. Max Weber, regarded as the father of modern sociology, was also a chair of political economy. Economics, the new science that emerged, was primarily influenced by the unifying models of Newtonian approaches of the seventeenth century. Even the great Karl Marx, who studied law and philosophy, used "metabolism", a biological analogy, to study commodities in his magnum opus' Das Kapital'. Interestingly, he might be the only economist, if one may say, who is widely cited across disciplines, an exception to the reverse trend that we have been seeing till now.

Towards the end of the nineteenth century, the formalisation reached a pinnacle with the marginal revolution, referred to as the neo-classical school of thought in economics, which laid the foundation for the utilitarian and rational notion of mainstream economics. Hereon, curricula and pedagogy in economics were carefully designed to provide consistent teachings of economics globally. On top of that, publishing research papers was prioritised to advance the fresh trajectory that economics was heading. Thus, economics evolved from a social science to a science concerning individual choices, or, to put it another way, "a problem of maximisation subject to constraints."

Now, we will take a slight digression and talk about some engineers who left their profession and joined economics studies. Leon Walras left engineering to study literature and journalism and later went on to become one of the forerunners of the marginal revolution. His successor at Lausanne chair, Vilfredo Pareto, was also an engineer whose Pareto optimum principle is a widely used concept in economics. Paretto's 80-20 rule is applied across fields from computer network theory to income inequality. Even Charles Babbage, commonly hailed as the father of computers, has written a book 'The Economics of Machinery and Manufactures' focusing on the issues of production and division of labour. The eminent mathematician John von Neumann founded game theory in economics. Another mathematician, Karl Menger, made a significant contribution to the general equilibrium debates of that time. A substantial proportion of economists during the 20th century either had some mathematical training or desired to use mathematics as the foundation of their economic models.

It was reasonably usual because no formal borders existed between social sciences in the classical period. It anticipated that many people would write and comment on diverse economic problems. Nevertheless, starting from the twentieth century, mathematics and science have had an enormous role in the development of mainstream economics. There is a growing tendency to reduce everything to mathematical models, and a theory is only approved if it is mathematically proven or verified. In pursuing formal rigour, the field has separated itself from the reality of actual-world situations. Keynes identified this phenomenon as early as 1936 and wrote: "Too large a proportion of recent 'mathematical economics' are mere concoctions, as imprecise as the initial assumptions they rest on, which allow the author to lose sight of the complexities and interdependencies of the real world in a maze of pretentious and unhelpful symbols." This is not to say that formalisation is not required, but it should not forget the real world below. The point is, even though valuable mathematical techniques are used to check empirical results and verify conclusions from nonmathematical reasoning, they should be used as something other than the modus operandi to understand human societies.

Even if the pundits of mainstream economics deny that their formalisation is devoid of biases, it has solid ideological undercurrents. What is presented as an ideologically neutral and universal science is rooted within the morals and structures of capitalism. Moreover, over the last century or so, every other school of thought has been systematically removed from curricula across the globe. To overcome this riddle, economics itself has to be radically transformed to be equipped to address and analyse societal problems with a meaningful perspective. Recently, there has been an increased interest in reviving and rejuvenating other schools, too, and this growing interest is conspicuously visible in academia. With the unprepared state of our economic machinery when confronted with recurring financial crises and slowdowns, it is high time that we prioritise alternate thinking and its history to bring about a paradigm shift in how we see economic studies and problems. Like Schumpeter once said, Economic History should be the focal point of the economics curriculum around which everything else should be organised.

Write a comment ...

Write a comment ...