Poincare to Walras

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.


25 Responses to Poincare to Walras

  1. Sacha says:

    It’s interesting that people who are versed in areas that use mathematics (including physics and economics) are aware that there are often inadequacies in theories (eg in the mesh of QM with GR) and they can live with them as they are often very useful nonetheless. It’s wrong to completely damn something just because bits of it don’t aren’t completely satisfactory.

    I think that this was evident in Birdy’s discussion on curved space-time some time ago.

  2. Steve says:

    Thanks Jason,

    I guess I became interested in economics in a roundabout way, via the complexity stuff that I was touching on from the direction of physics. Like many people coming at it from this route, you see the critique before you see what it does explain and it seems easy to dismiss it as nonsense on this grounds. Particularly when most of what is presented in the media as “economics” is just macromancy. In fact it was the macromancy stuff that had made me view economics for so many years as garbage not realising that this was only a portion of the subject.

    Its been a big learning experience for me over the last 3 or so year to actually read up on what the mainstream arguments are and why they do actually work to explain a great deal. Always a good idea if you are coming new to a field is to engage with the mainstream before you get carried away with the critiques.

  3. graemebird says:

    You’re talking nonsense Sacha.

    I never said I was after a clean slate.

    My point of view has always been to have a number of different models held in parallel. Two is unacceptable since people, being who they are, will get divided into heretics and bully-boy advocates of the intellectual status quo.

    And most likely they’ll both be wrong.

    Relativity is on the way out. And may I remind you Sacha of how lame your arguments were in defense of space-time curvature.

    But for the moment its the best model that we have a lot of people trained up on to perform certain calculations

    Here Steve sets up a strawman. Dudes who realise that relativity and this quantum voodoo have a limited shelf-life don’t uniformly want to toss everything out and start again like some sort of Khmer Rouge of science.

    We want the physics community instead, to get its act together so that it can claw its way out of this stalemate its been in for these last several decades.


  4. graemebird says:

    “Its been a big learning experience for me over the last 3 or so year to actually read up on what the mainstream arguments are and why they do actually work to explain a great deal.”

    What on earth are you talking about Edney.

    You would have been better off going with the Austrians three years ago.

    Or better still Reismans Austrian/British Classical School integration that is pretty much the same as Gerrard Jacksons outlook.

    What do you mean the macromancers work to explain a great deal.

    Keynesianism is about the worst backward move in the history of scientific enquiry as can be imagined.

    Its just a disguised rehashing of old fallacies.

  5. Steve says:


    1) When did I say I became a Keynsian?
    2) Where is your evidence that relativity is on the way out? The problem with most relativity critics is that they have no evidence for the flaws. Most of all though trying to predict the direction science is going to take is utter bullshit.

  6. graemebird says:

    The evidence is in the holes in it that have surfaced in our various discussions.

    But its a bit cheeky of you asking me for evidence when you are on the leftist evidence filibuster.

    Do you now acknowledge that you don’t have a stitch of evidence for the likelihood of catastrophic warming?

  7. Sacha Blumen says:

    Bird, identify ONE hole in classical general relativity.

  8. graemebird says:

    Photons move faster then light. Since they move in waves. The individual particles must be moving faster then light.

    Theories of the big bang have it that the universe expanded much faster then the speed of light.

    The idea of the singularity within a black hole. Light cannot escape the event horizon since the escape velocity is greater then the speed of light.

    But somehow the singularity exerts gravitational force. Meaning that gravitrons would have to travel faster then the speed of light…. Something has to go.

    Various experiments have had light exceeding light-speed.

    Shall I go on?

  9. Steve says:

    As I have explained before.

    1) photon’s done move faster than light. Light can have phase velocities faster than light but that is not the speed photon’s travel at its a theoretical velocity to do with the dispersion of light.

    2) Space expands faster than light, which is different from things moving in space. This is not a contradiction.

    3) Quantum and GR don’t sit nicely together. This is well known and an active area of research something will go or be modified, but there is not actual observation, or experiment where GR fails here.

    4) No they haven’t

    Yes, do go on.

  10. graemebird says:


    The first 2 of these ripostes are merely ridiculous.

    Number 3 ought to be an admission of defeat.

    And 4 is just you lying.

  11. graemebird says:

    By the way Steve.

    The rules haven’t changed.

    You have to admit when you are wrong and I am an admission or two short here.

    Where is your evidence for the likelihood of catastrophic warming or your admission that it doesn’t exist?

  12. Steve says:

    No they aren’t ridiculous, you just don’t want to understand.

    As for 3 I have never said that GR will be the last word in gravitational theories. At the same time we don’t know anywhere where it is wrong, so unless we can find this we have no good reason to replace the theory.

    As for 4, you are lying.

  13. Steve says:

    I’ve explained my position on warming any number of times. I’ll state it again.

    1) increasing CO2 forces warming. The level of emissions have increased rapidly.
    2) Models despite their flaws give our best estimates for what is likely and they indicate temperature rises, with a small chance of big temperature rises.
    3) Changes in climate are overall very likely to be detrimental as human population has settled and developed to take advantage of existing climatic conditions.
    4) While in the milder scenarios it is probably not worth acting in advance against AGW, there is a risk that these changes will be very detrimental (eg sea level rises), to insure against this it is worth trying to reduce emission of greenhouse gasses.

  14. Sacha says:

    Steve’s right, Bird. Every physicist knows that QM and GR don’t fit together, but that they work in their own realms. Lots of people are trying to find theories that look like GR in some appropriate limit and also look like QM in another appropriate limit – which is what string theory is all about.

  15. graemebird says:

    No Steve.

    What I was after was EVIDENCE.

    I wasn’t after make-believe-evidence or non-evidence.

    Where is this talk of MODELS?

    Why are you giving me this unscientific assholery and dishonesty of MODELS?

    When you don’t have a model that works.

    Taking one hundred models, none of which works, is not evidence.

    Now stop being such a dishonest prick.

    Will you come up with evidence for the likelihood of catastrophic warming?

    Or will you admit that you don’t have it?

    You don’t have a model that works!!!!

    Which model are you relying on?

    You know these computer programs have names.

    What’s this models NAME that you reckon is evidence.

    Now you are just being a complete asshole.

    Admit you are wrong or show me the model that someone has that works.

    Does this model that you reckon that works…. Does this model predict that its going to be COLDER in the 2030’s then it is now?

    If not why not?

    Stop being a fucking bastard and admit you don’t have the evidence.

    This overheating Jive is a complete fucking fantasy.

    We live in a brutal, pulverising, ice age.

    I don’t think its too much to ask that you stop being an idiot.

    Lets go again……..




  16. graemebird says:


    Fucking Hell Sacha.

    Why the fuck are you lying?

    Steve is not right.

    He’s being an asshole.

    And it does you no good to lie about it.

  17. graemebird says:

    This is what is dominating this hoax.

    People like Steve and Sacha ready and willing to be idiots and to lie for a stupid fraudulent cause.

    No better then Jihadists on the scientific level.

  18. Sacha Blumen says:

    Bird, detail where Steve is wrong in his comment (and don’t bring potential global warming into it).

    What, for instance, is wrong with the idea that space can expand faster than light?

  19. graemebird says:

    He’s got to admit when he’s wrong.

    On the one hand he won’t show me any evidence (real evidence, not make believe) for the likelihood of catastrophic warming.

    But on the other hand he won’t admit he doesn’t have the evidence.

    He’s being a pig-faced shit-headr and its abuse that I’m not putting up with.

    So we’ll not get sidetracked until Edney stops this unacceptable behaviour and stops being a complete cunt.

    Ken Miles has finally admitted he doesn’t have any evidence for the likelihood of catastrophic warming.

    Now you two dishonest pricks ought to own up or pony up the evidence.

    The two of you. Amit you don’t have the evidence or show up with the fucking evidence.

    Thats normal fucking rules you stupid parasites.

  20. Steve says:

    1) tone down the language.
    2) What would you accept as evidence? I actually have no idea what you would accept as evidence as you don’t accept models, and that is how we predict the future.

  21. graemebird says:

    A few models that backtest would be helpful.

    That backtest just as well or better then solar irradiance when you graph the results and superimpose them.

    But don’t be daft about it.

    You know a model that doesn’t backtest doesn’t WORK and therefore isn’t evidence.

    You KNOW that.

    So why all this screwing around?

    The other thing would be a cogent argument as to why that level of heating could even be likely.

    Thats what we are missing here.

    Like for example if there was evidence, in the last 39 million years, of some massive increase in CO2, say from a volcanic eruption…. and if that then led to a massive heating.

    55 million years ago doesn’t count.

    Because the continental arrangements were totally different, the deep oceans were already pre-warmed. So its very easy to see how some massive methane warming could have happened then.

    Totally impossible now.

    But there has been plenty of abnormal CO2 releases surely?

    But where is the evidence that this lead to more-than-negligible warming?

  22. Steve says:

    A model that hasn’t been back tested isn’t wrong, we just don’t know how confident we are in it, but in the absense of other stuff it may be the best thing we have, so long as they are backtested going forward that is what we have to work with.

  23. […] that first saw what was wrong with economics, it is mathematics, namely a mathematician called Raymond Poincaré, in a letter to Walras. In short, Poincaré mentions the hyper-rational, and thus unreal, aspect of economics. Later […]

  24. Hugo says:

    Basic problem with neoclasic economics is that its supporters reject any attempt to discuss the basic hyphotesis. As it is a theory from which political programs are derived, there are lots of people engaged, who will suffer the consequences of budgets cut off, bad salaries, etc.

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