[lit-ideas] Re: There's no such thing as a free cremation

  • From: "Andreas Ramos" <andreas@xxxxxxxxxxx>
  • To: <lit-ideas@xxxxxxxxxxxxx>
  • Date: Fri, 17 Nov 2006 10:14:24 -0800

Milton Friedman is dead already.

http://www.ft.com/cms/s/cb74eef8-7599-11db-aea1-0000779e2340.html

Thanks for posting that.

I find economics fascinating, but... well, it's also useless.

I work in the computer industry and we never look to books on economics for information, guidelines, or ideas on how to run our companies. Doesn't that seem a bit odd?

If I want to know when Jupiter will rise in the evening sky, I can consult a textbook on astronomy. Where is the pancreas? Look in a medical textbook. How long will it take to fill my hot tub? Simple mathematics can calculate that.

A science is both theorectical (it explains why things happen) and practical (knowing the "why", we can get desired results).

But economics isn't either of those. We really don't understand the economy. Or, better said, we understand it too well: there's dozens of competing theories on economics. Which means we don't understand it.

And economic theory isn't practical. You can't run a company based on an economic theory, even if it has a Nobel Prize. It just doesn't work that way.

To work in the business world, books by Zig Ziglar and others are useful. It ain't theory, but it works. I deal with many clients. They're VCs, CEOs, or board members of corps. Many of them are Harvard or Stanford MBAs. We've sat around and talked about what they learned at Harvard Business School and what it's like to actually run a company. There's many useful tools and ideas, but there isn't an overall theory of economics or business. We all learned it the same way: everyone makes lot of mistakes, the smart ones don't repeat the mistakes.

Doesn't anyone in economics realize this problem?

yrs,
andreas
www.andreas.com

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