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In fact, we are all builders and purveyors of unrealistic simplifications. Some of us are self-aware: we
use our models as metaphors. Others, including people who are indisputably brilliant and seemingly
sophisticated, are sleepwalkers: they unconsciously use metaphors as models.
Now of course some people are better sleepwalkers than others. The metaphors of some anti-modelers
stand up very well to the test of time Hirschman's Strategy of Economic Development, for example,
remains very readable and suggestive even today. For the most part, however, economic thinkers who
imagine that they have broadened their vision by abandoning the effort to make simple models have
done no such thing. All that they have really done is to use high-flown rhetoric to disguise, not least
from themselves, their lack of clear understanding.
One good indicator of the perils of imagining that you can do best by avoiding a specific model is the
frequency with which nonmodelers fall into crude fallacies. Look, for example, at any of the many
writers on "competitiveness" whose compelling rhetoric masks a failure to understand that the trade
balance is, by definition, equal to the difference between saving and investment; or who advocate
targeting of "high-value-added" industries without stopping to ask why markets have not competed
away that high value, and thus failed to notice that in practice industries with high value added per
worker are capital-intensive sectors like oil refining, not high technology sectors like computers.
So modeling, which may seem simplistic, is in practice often a discipline that helps you avoid being
even more simplistic. But there is more: a formal model, which may seem like a ridiculously stylized
sketch of reality, will often
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