hard deadlines

This month's Scientific American has a most interesting essay by GMU prof Robert Nadeau about the failure of neoclassical economics to account for (and effectively respond to) environmental challenges. He traces this to the origins of economic theory in 19th-century physics and mathematics:

The progenitors of neoclassical economics, all of whom were trained as engineers, developed their theories by substituting economic variables derived from classical economics for physical variables in the equations of a soon-to-be outmoded mid–19th century theory in physics. [...]

The strategy used by the creators of neoclassical economics was as simple as it was absurd—the economists copied the physics equations and changed the names of the variables. In the resulting mathematical formalism, utility becomes synonymous with the amorphous field of energy described in the equations taken from the physics, and the sum of utility and expenditure, like the sum of potential and kinetic energy in the physical equations, is conserved. Forces associated with the field of utility (or, in physics, energy) allegedly determine prices, and spatial coordinates correspond with quantities of goods. Because the physical system described in the equations of the theory in physics is closed, the economists were obliged to assume that the market system described in their theory is also closed. And because the sum of energy in the equations that describe the physical system is conserved, the economists were also obliged to assume that the sum of utility in a market system is also conserved.
— Via Scientific American

Given all we know now about game theory, nonlinear coupling, and the death of rational actors, this makes the Invisible Hand start to look as quaint as a piece of Victorian clockwork in repose on a delicate lace antimacassar. If you want to get your geek on, very much worth a read.