Thursday, January 13, 2005

Analyzing Versus Executing II

by Asim Jalis

Economic theorists like Hayek and the Austrians really have no experience in running real economies. And yet they are able to theorize. In fact their lack of real experience might make it easier for them to ignore the details. It might make it easier for them to theorize with abandon and to construct theories that are much more elegant than they would have been if they were constrained by the messy details of reality. At the same time a connection can be retained with the ground reality by ensuring that the ideas and interpretations are consistent with the facts as they are being reported by people who are experiencing the reality directly. What I am trying to say here is that perhaps this focus on action is misguided, and in fact it's the speculative theorizing that we really need more of. Even though I realize the shortcomings of speculative theorizing, I must play this game, as it seems to be the game I am the strongest in.