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320 Economics
ing of the economy, where the main emphasis is on synchrony and not on
diachrony, although the line of separation is somewhat vague; the problems of
concern are e.g. the rale of the State or, more generally, the individual phases of
a given socio-economic system (which sometimes differ significantly from one
another). The oligopoly capitalism of the twentieth century obviously differs in
many important aspects from the early capitalism studied by Marx.
C. Mathematization of economics: directions and perspectives
Mathematization70, in a broad sense, obviously represents a promising development
in economics. It corresponds to a general trend in scientific thought and
results from certain features proper to economics and its own history. Economics
always had a bias for quantification and, earlier than the other social
sciences, for theories which it developed in mathematical form, although the
initial assumptions might be unrealistic.71
Three distinct aspects must be considered:
a. Quantification methods proper
b. Use of methods of statistical inference in economics72
c. Mathematization of economic theory proper, by the adoption of certain
categories and/or by the use of quantifications and algorithms adapted or spe-
cially elaborated for the purpose.
Computers allow rapid processing of vast quantities of quantitative date and
offer great possibilities in economics. Variant thinking (see above) can be applied
on a much broader scale, and the laboratory experiment of other disciplines
can to some extent be replaced by simulation. On the other hand, computers
represent a temptation : a hasty and over-extensive use of algorithms, harmful
to theoretical thinking. Computer results are too often accepted as absolutely
accurate, which is certainly not the case when the processed data or even the
concepts employed are dubious or insufficiently elaborated.
This danger obviously does not detract from their great practical value; it is at
most a warning against adopting the illusion that computers can, in themselves,
solve problems in economic theory.
Economics has already a long tradition of using statistical inference methods.
They can be successfully used so long as the economist does not indulge in for-
malism, e.g. identifying statistical trends with laws of development. Econometric
methods can be very widely used in micro-economic and in macro-economic
partial analysis when statistical verification is needed to test the interdependence
of two or more variables. It becomes much more difficult, however, to determine
all the relations that enter into a comprehensive model of the national economy,
although attempts at verification have been made, usually after the model was
constructed.
The mathematization of economic theory takes place primarily through the
assimilation into economics of certain categories, concepts and methods of
reasoning.73 Economics is made more rational and less metaphysical by the in-
troduction of differential, difference and probability calculus, the theory of