Monday, May 9, 2011

Paul Krugman on David Hume

Over at his blog, Conscience of a Liberal, Paul Krugman talks about the liberating effects of reading David Hume. I must concur entirely. Then he applies the principles of one of Hume's quotes to the field of economics.

David Hume:
I have long entertained a suspicion, with regard to the decisions of philosophers upon all subjects, and found in myself a greater inclination to dispute, than assent to their conclusions. There is one mistake, to which they seem liable, almost without exception; they confine too much their principles, and make no account of that vast variety, which nature has so much affected in all her operations. When a philosopher has once laid hold of a favourite principle, which perhaps accounts for many natural effects, he extends the same principle over the whole creation, and reduces to it every phænomenon, though by the most violent and absurd reasoning.
Paul Krugman:
That applies to lots of things; to stay with my home field, the idea of maximizing behavior, which is a useful gadget for thinking about many economic issues, all too often becomes a sacred principle in the minds of economists, who refuse even to consider any story that doesn’t involve perfect rationality on the part of all players.
Definitely something to think about.

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