Strong Towns Podcast
Episode 270

Newtonian Economics

Charles Marohn published on

After listening to the lecture series Redefining Reality: The Intellectual Implications of Modern Science, Chuck has some questions about whether or not modern economics, with it's Keynesian paradigm, is stuck at the Newtonian phase and is in need of an Einstein.

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  • Jesse Bailey

    Great podcast. Economics and the history of science are two topics that fascinate me, and I'll have to pick up this Great Course to listen to it at some point.

    I'm reminded of studying undergrad economics in college, with all its neat assumptions about the world, many of which involve rational people striving to maximize utility. That is foundational to modern day economics, but it hardly describes the world as it is. The world as it is consists of human beings in all their emotions and complexity making economic decisions for reasons that may have nothing to do with maximizing utility. The world of behavioral economics is shedding new light into some of this complexity. What will the next revolution in economics look like? I don't know but I suspect it will have to account for much more of the complexity and nuance of human relationships. It will need to examine the groupthink that happens at times in markets (see: Irrational Exuberance by Robert Shiller). It may be that this kind of knowledge is currently 'unknowable' with the tools we have.

    One of my favorite courses in college was the history of science, prehistory through Newton. Fascinating. We read Thomas Kuhn's seminal book, "Structure of Scientific Revolutions", that served to weave together the threads of scientific ideas and place them into historical context. If you haven't read it, pick it up.