p4
"As econometricians, engaged in what passes for empirical research, we do not try, how- ever, to ascertain the actual shapes of these functions and to measure the magnitudes of these parameters by turning up new factual information."
p5
"The orderly and systematic nature of the entire procedure generates a feeling of comfortable self-sufficiency."
"This complacent feeling, as I said before, discourages venturesome attempts to widen and to deepen the empirical foundations of economic analysis, particularly those attempts that would involve crossing the conventional lines separating ours from the adjoining fields."
"True advance can be achieved only through an iterative process in which im- proved theoretical formulation raises new empirical questions and the answers to these questions, in their turn, lead to new theoretical insights. The "givens" of today become the "unknowns" that will have to be explained tomorrow. This, incidentally, makes untenable the admittedly convenient methodological position ac- cording to which a theorist does not need to verify directly the factual assumptions on which he chooses to base his deductive arguments, provided his empirical conclusions seem to be correct. The prevalence of such a point of view is, to a large ex- tent, responsible for the state of splendid isolation in which our discipline nowadays finds itself."
"Preoccupation with the standard of living of the rural population has led agricultural economists into collaboration with home economists and sociologists, that is, with social scientists of the "softer" kind."
p6
"Without invoking a misplaced methodological analogy, the task of securing a massive flow of primary economic data can be compared to that of providing the high energy physicists with a gigantic accelerator."
"The scientists have their machines while the economists are still waiting for their data."
p7
Amazing conclusion: "We, I mean the academic economists, are ready to expound, to any one ready to lend an ear, our views on problems of public policy: give advice on the best ways to maintain full employment, to fight inflation, to foster economic growth.
We should be equally prepared to share with the wider public the hopes and disappointments which accompany the advance of our own often desperately difficult, but always exciting intellectual enterprise.
This public has amply demonstrated its readiness to back the pursuit of knowledge.
It will lend its generous support to our venture too, if we take the trouble to explain what it is all about."
Through these four examples we believe to have shown that critics of the foundations of mainstream economics are not new and that there has been criticism of the assumptions made by neoclassical and therefore equilibrium economists throughout time.
New inputs in economics today
As Georgio Israel puts it in the late part of their reference work \cite{Israel2015}, the study of equilibrium, while still used by central banks to this day for economic planning has lost momentum in the academic profession. After Arrow and Debreu showed in their 1954 paper : "Existence of an Equilibrium for a Competitive Economy" \cite{Arrow1954} that under very strong assumptions in a certain competitive economy their exists an equilibrium [CITE KIRMAN]. After a few more years of trying (and failing) to prove that the equilibrium was stable and/or unique there has been a loss of interest of the profession in the research program of general equilibrium \cite{Israel2015}.
Dead ends and possible improvements
Although we believe we now have an overview of the historicity of the notion of equilibrium in economics, there are two points where we believe to have failed so far:
- Having a good understanding of the social context of the emergence of the notion of equilibrium at the junction of the 18th and 19th centuries.
- Understanding what is the precise role of equilibrium models today. The study of equilibrium theory seems to have lost momentum since the 1980s, however we do not understand what possible research is done on them today.
- Understanding how science is made in the economics community, just like Bruno Latour does it in his book : "Laboratory life" \cite{latour1986laboratory}. However, this might be more difficult, as economics has a direct link to power and might therefore be less open that "pure" science to the incoming of social science outsiders.
Conclusion
\cite{Ferraro_2005} – Interesting article describing how social theories need to be done with caution as they can become self-fulfilling. The article takes the example of economics as a field with a huge social impact. The examples of the Black-Scholes becoming self-fulfilling as it became widely used in the 1970s can be used to describe this phenomenon.
\cite{Blaug_2001} --> Need to incorporate the article from Mark Blaug about the lack of history of Economic Thought in the economics curriculums. However, as we have tried to show in the present article, history of science can become a tool for a deeper understanding of concepts used in economics. As a historiographical approach in physics helps to understand that Einstein did not create every new concept at the beginning of the 20th century (as he was part of a movement/tendency that would allow for the emergence of his ideas, there was Poincaré etc.), a historiographical approach of economy can show us that history of economic thought has been told in different ways so that the concepts presented by some overconfident "experts" today can be readily dismantled a mere arguments of authority, leading to more productive and constructive criticisms of economics.
On a more personal note, although the article tries to put into perspective both current challenges of the history of economic thought as well as a historical review of the emergence of the notion of equilibrium and how it has evolved since the 18th century's preconceptions it was hard to bring some new work to the table, understanding the whole picture being already time taking. As Georgio Israel put it in his 1990 book: "new historical inquiries have emerged meanwhile", most of which we surely missed and we therefore believe that the work here written could be the basis for more specific historical research projects.
Acknowledgements
Beginning this historical work, we were both (two first authors) very ignorant of the different economic controversies that played a role inside the profession. Clearly out the way for us to start our investigation was therefore a necessary task, we therefore thank André Breedt and Jean-Philippe Bouchaud (from CFM, Capital Fund Management) who took time to discuss the new field of econophysics and how it is trying to tackle economic problems in a different way from the one of the classical economics profession. We also thank Jean-Pierre Nadal from the E.H.E.S.S. in Paris for introducing us to his work in mathematical social science and in the fast-developing field of agent-based models. We thank Alan Kirman (also affiliated to E.H.E.S.S.) for talking to us about his shift from orthodox to heterodox economics and on how rationality has crippled the economics profession. We are deeply grateful for his advice that led us to concentrate our time and effort the the notion of general equilibrium and its historical aspects. Finally, we thank our professor, Frédéric Brechenmacher for having left us with the time and the liberty to launch ourselves into such a research project during a history of science seminar that took place at the Ecole polytechnique.
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Previous abstract : This aim of this article is to extend the work of Giorgio Israel who in his famous book The Invisible Hand. Economic Equilibrium in the History of Science, published in 1990 reviewed the history of the notion of equilibrium in economy. As he pointed out in the foreword of the 2015 edition, there had been some new discoveries in the field, especially with the upbringing of a new field of research : econophysics. With such of revival of links between physics and economics, this paper shall try to understand the early causes of the apparition of the notion of equilibrium in economics (be it physics or not).
Résumé des articles sur l'histoire de la notion of equilibrium
Israel 2015 (published in 1990) : The invisible Hand. Economic Equilibrium in the History of Science.
\cite{giorgio2015} : Livre dont le titre est : The Invisible Hand. Economic Equilibrium in the History of Science. Traite de l'histoire d'une théorie de l'équilibre. Presque exhaustif, le livre reconnait les propres limite du travail. Il remonte jusqu'à l'époque de Walras, et remonte avant lui. Analyse en partie basée sur l'adoration des scientifiques de l'époque (période des lumières) de la mécanique newtonienne.
--> je pense que c'est la référence la plus importante que l'on ait. Approche externe et interne, très intéressant.
Chapter II : The Origins, 1. An open problem
"No one studying the theory's origins in contemporary manuals can help seeing Walras as an isolated peak rising from a plain broken only by a few modest foothills" --> The problem of Walras' forerunners, who are they ? Réponse (José) : je dirais dans un premier temps Adam Smith, son concept de main invisible n'est rien d'autre que l'équilibre qui fait que, malgré les intérêts égoïste des individus, un marché arrive à s'organiser comme un équilibre de "forces", ensuite dans la mathématisation de ces concepts Cournot est une référence indispensable. Réponse (Quentin) : Certes mais je pense qu'il y a plus que ça. Il parle de la volonté d'une grande partie de la communauté scientifique de l'époque de mathématiser le social comme en mécanique et la thèse du livre est justement que c'est parce que l'on voulait tout mathématiser que l'on en est arrivé à tout traiter sous forme d'équilibre. La partie II du livre traite de ces questions d'Origins et trouve quelques réponses qui remontent à avant Walras.
Importance of Mark Blaug
Historian of economic thought, "specialist" of the notion of equilibrium, cited by Kirman multiple times. Published a lot in the 90s and 00s, but we can see only to references to this author in \cite{giorgio2015}'s work. This is where it becomes interesting regarding the fact that this major book is not up to date. --> We need to look this way.
He published an article titled : A Methodological Appraisal of Marxian Economics, North-Holland, 1982, on voit bien où il va et comme il a développé tout ça hyper tardivement on voit l'importance qu'il a.
\cite{Blaug_2001} --> Critical article of the lack of history of economics into most of the economic curriculums in top research universities.
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