This quote might be very well known, but I hadn’t heard it until skim reading a book at lunchtime. Essentially Poincare had identified the main critique of the assumptions of neoclassical equilibrium economics back in October 1901 in a letter to Walras.
“at the beginning of every mathematical speculation there are hypotheses and that, for this speculation to be fruitful, it is necessary (as in applications to physics for that matter) to account for these hypotheses. If one forgets this condition, then one goes beyond the correct limits”.
“You regard men as infinitely selfish and infinitely farsighted. The first hypothesis may perhaps be admitted in a first approximation, the second may call for some reservation.”
The critique is valid but despite the basic assumptional flaw hasn’t prevented the deriving of some useful theories. Ultimately a theory does have to be both usefully predictive but also simple enough to be tractable. Some, such as sections of the “post-autistic economics” movement, seem to have become a little carried away with the critique and think the whole edifice should be thrown out. Making such calls without having a better theory to put in its place is typical crank behaviour and an analogous style can be seen in the anti-relativity and anti-quantum mechanics nuts.
I have great hopes for new modelling and understanding of economics from areas like complexity theory, but the people who call for a clean slate are ridiculous. The critique is not new as the quote shows, but fortunately for everyone Walras chose to ignore it. Economics reached where it is by following a path that, despite its flaws, led to many fruitful results. Perhaps its a path that doesn’t lead to the top of the mountain, but one that made the first stage much easier and given us a better view of where we might go to now.