By Mike Gray

In everything from “global warming” to embarking on an “economic stimulus,” people with agendas trash the real world in favor of their models:

“The very term ‘model’ is a pretentious borrowing of the architect’s or engineer’s replica, down-to-scale of something physical,” says Barron’s economics editor, Gene Epstein. “These are not models at all, but just equations that link various numbers, maybe occasionally shedding light, but often not.”

Take this as a throwing down of the gauntlet. Macroeconomic wizards owe us more than the circular justifications for cushy jobs.

Likewise, we have to explain that a scientist’s model, while useful in limited circumstances, is little better than a crystal ball for predicting big phenomena like markets and climate. It is an offshoot of what F. A. Hayek called the “pretence of knowledge.” In other words, modeling is a form of scientism, which is “decidedly unscientific in the true sense of the word, since it involves a mechanical and uncritical application of habits of thought to fields different from those in which they have been formed.” A model is thus a cognitive shortcut for both the wonk and the journalist, the latter of whom wants to peg his story to something authoritative the wonk has to provide. At the receiving end of this wonk-writer alliance are the rest of us—with little besides common sense as a shield. And I don’t mean this as populism. It is rather a defense against scientism launched from the turf of Austrian economics.

Complex phenomena can be counterintuitive. Sometimes they require scrutiny by experts to make sense of them. Notwithstanding their expertise, experts are just as often wrong as right. Can we base policy decisions on what amounts to coin flips? Models are a means of making the most fragile of hypotheses seem strong and substantive. But the only thing we can really predict is that they’ll eventually shatter.

— Max Borders, “The Myth of the Model”, The Freeman