Feynman and Economics
Richard Feynman was one of the great physicists and Samba drummers. His friend and colleague, the mathematician Freeman Dyson reviewed two recent books about Feynman in the New York Review of Books (subscription required, available later, read it!), Quantum Man: Richard Feynman’s Life in Science, and Feynman by Jim Ottaviani, with art by Leland Myrick and coloring by Hilary Sycamore.
Most people know Feynman from his work on the Rogers Commission, which investigated the Challenger Disaster. It was Feynman who demonstrated that the O-Rings were the probable direct cause of the explosion by putting O-Ring material into a glass of ice water where it grew stiff, showing that the material would not provide a good seal in the solid rocket boosters when it was cold. He found this out by talking to the engineers on the project, not by talking to the managers, whose understanding of the technical details of the space shuttle was disastrously bad. Dyson says he was dying of cancer at the time, but felt it was his duty to the nation to use his last productive days on the project.
He went to Washington and found what he had expected at the heart of the tragedy: a bureaucratic hierarchy with two groups of people, the engineers and the managers, who lived in separate worlds and did not communicate with each other. The engineers lived in the world of technical facts; the managers lived in the world of political dogmas.
The political dogma of the managers, declaring risks to be a thousand times smaller than the technical facts would indicate, was the cultural cause of the disaster. The political dogma arose from a long history of public statements by political leaders that the Shuttle was safe and reliable.
One of Feynman’s important contributions to physics was the Feynman Diagram, a new way of thinking about quantum theory. Historically, physicists worked up equations that described some event, and then worked out mathematically what might happen next. Feynman did it with pictures, like those in the illustration above from Ottaviani’s graphic novel; I’d recommend the book on the strength of that picture. You can find a technical description in Wikipedia.
Feynman skipped the equations and wrote down the solutions directly, using his pictures as a guide. Skipping the equations was his greatest contribution to science. By skipping the equations, he created the language that a majority of modern physicists speak. Incidentally, he created a language that ordinary people without mathematical training can understand. To use the language to do quantitative calculations requires training, but untrained people can use it to describe qualitatively how nature behaves.
From an early age, Feynman was interested in the way things work, not as abstractions in the form of equations, but in their physical interactions. I imagine him thinking that the equations were all very well, but what the hell is a muon actually doing?, and drawing a picture. It is very much in the vein of Einstein, who worked out relativity by trying to figure out what he would see if he were riding a beam of light.
I wonder what Feynman would think of today’s economists. He might very well think of most of them as management at NASA. They know the political dogma, and they make up things that will satisfy politicians and the people who hire consultants. The few economists who pay attention to the facts, to the lessons that observation teaches, are the counterparts to the engineers who understood the problem and were shut out by management.
Based on experimental data, Feynman thought that the world is divided between a quantum layer that operated on probabilities, and a classical layer, where everything is predictable. He was willing to live with that duality and wait until he got evidence from the lab that led somewhere else. The economics profession should do the same, but it doesn’t. Paul Krugman explains it this way in a recent paper. Economic theory is divided into microeconomics and macroeconomics. The former requires one set of assumptions, and the latter requires a different set of assumptions. You need both to make it work, but the underlying assumptions are inconsistent. That isn’t a problem in economics any more than it is in physics.
But economists were bound to push at the dividing line between micro and macro – which in practice has meant trying to make macro more like micro, basing more and more of it on optimisation and market-clearing. And if the attempts to provide “microfoundations” fell short? Well, given human propensities, plus the law of diminishing disciples, it was probably inevitable that a substantial part of the economics profession would simply assume away the realities of the business cycle, because they didn’t fit the models.
I would absolutely love to see someone of Feynman’s stature do a report on the role played by economists in creating the Great Crash. I imagine it would say “skip the math”, and the last sentence would be a variation of this from Feynman’s report on the Challenger disaster:
For a successful technology, reality must take precedence over public relations, for nature cannot be fooled.