Faulty Thinking: The Use of Theories

My brother has a fairly rad shirt. He got it from Harvard (yes, Harvard U, that Harvard) when he went there for an "econ bee"¹. It bugs the crap out of me.

See, the shirt has this quote on it:

Sure, it works in practice, but does it work in theory?

Which apparently is rather funny if you're an economist, but I hate it because it reflects (or appears to reflect, and in practice there's no difference in how you get treated) utterly flawed thinking.

The whole point of theories is to reflect (or explain) reality. If a theory or its predictions differ from reality, then it is worthless to the extent that it differs from reality. For example, Newtonian mechanics, the simple version of reality where you add speeds together, isn't the whole picture. It's still useful, because it holds together at any and every speed we humans can actually reach². A theory that doesn't reflect reality (makes wrong predictions) is useless at best -- at worst, people keep using it anyways and they are wrong.

This way of thinking ignores that. It rejects anything that doesn't fit into its existing theory. That's a recipe for irrelevance. Now ordinarily, I'd be perfectly content to let people be idiotically irrelevant into oblivion. But this is expressed by Economists, so-called "experts" who people actually listen to. Almost by definition, they are not irrelevant. And so this is a huge problem.

The lesson here is, if your thinking doesn't match reality then you need to update your thinking. And watch out for your economist -- even if they know what they're talking about, they might still be wrong, maybe even on purpose (the worst kind of wrong).

Footnotes:

¹ Not really an "econ bee", it was an Econ quiz thing. I'm not super sure of the details, and "econ bee" gets most of the idea across by way of analogy to "spelling bee". It was probably a bit more like Jeopardy.

² As of this writing, anyways.