Economics and its relatives are well entrenched disciplines in academia. They are commonly placed in an administrative unit of their own: School, or a College, of Business, is the usual address. The place invariably reeks of money, and the faculty acts accordingly. Now, I have nothing against it being part of the academic environment, it is just like sociology, political science, ethnic studies of various flavors, etc. The practitioners in these fields have usually an interesting story to tell, and they are quite often very good and entertaining speakers, both in the classroom and at a lunch in the faculty club. It is only when the subject is dressed up as an exact science, in particular, when one hears of "Mathematical Theory of Economics", an odor permeates the air. It is clear that if one treats the subject as a part of mathematics, one engages, to say politely, in witchcraft. In reality, it is an intellectual fraud. Since these people have an access to considerable amount of money, and know well how to control it, sentiments such as these are not heard on campuses very often. I was therefore pleasantly surprised to see an article in Scientific American, April 2008, page 42, which reflects quite well my feelings and opinions on the subject. The author is Robert Nadeau, and the title of the article is "The Economist Has No Clothes." It also available on line
Here are some excerpts of what Mr. Nadeau has to say:
[...] The theory is based on unscientific assumptions that are hindering the implementation of viable economic solutions for global warming and other menacing environmental problems.
[...] The strategy the economists used was as simple as it was absurd—they substituted economic variables for physical ones. Utility (a measure of economic well-being) took the place of energy; the sum of utility and expenditure replaced potential and kinetic energy. A number of well-known mathematicians and physicists told the economists that there was absolutely no basis for making these substitutions. But the economists ignored such criticisms and proceeded to claim that they had transformed their field of study into a rigorously mathematical scientific discipline.