"I would argue that mathematics can only give you false confidence if you fail to understand it completely."
Yes, that's the problem. In economics, it's difficult to know what all of the relevant variables are and the basic inputs are not well-understood (like the behavior of people).
Even if you did create a perfect model, most of the assumptions would have to be nearly wild guesses, and probably even small errors in the assumptions would lead to wild errors in the result. And the resulting model would be so complex that I'm not at all sure it would even be useful for crafting policy.
Then, let's say we had a perfect and simple model that anyone could understand. Everything would be wonderful, right? No, you still have to collect all the relevant data for inputs, run the simulation, and then distribute the results to all of the relevant parties -- all before the economy plays out in real time.
So what actually happens with mathematical models is that people oversimplify, but because it has the aura of formalism they become very confident. There are always so many wild variables like wars or drought that it's easy to later dismiss any deviation from their model as "a special event" (e.g. an earthquake).
And what's the optimization target, by the way? The total number of shoes produced? Using GDP as an optimization target has a lot of known problems and embeds a lot of assumptions itself. And some people simply prefer living under a certain kind of economic system.
So, trying to approach economics from a purely mathematical standpoint is useless, in my opinion.
Yes, that's the problem. In economics, it's difficult to know what all of the relevant variables are and the basic inputs are not well-understood (like the behavior of people).
Even if you did create a perfect model, most of the assumptions would have to be nearly wild guesses, and probably even small errors in the assumptions would lead to wild errors in the result. And the resulting model would be so complex that I'm not at all sure it would even be useful for crafting policy.
Then, let's say we had a perfect and simple model that anyone could understand. Everything would be wonderful, right? No, you still have to collect all the relevant data for inputs, run the simulation, and then distribute the results to all of the relevant parties -- all before the economy plays out in real time.
So what actually happens with mathematical models is that people oversimplify, but because it has the aura of formalism they become very confident. There are always so many wild variables like wars or drought that it's easy to later dismiss any deviation from their model as "a special event" (e.g. an earthquake).
And what's the optimization target, by the way? The total number of shoes produced? Using GDP as an optimization target has a lot of known problems and embeds a lot of assumptions itself. And some people simply prefer living under a certain kind of economic system.
So, trying to approach economics from a purely mathematical standpoint is useless, in my opinion.