Measurement, Quantification and Economic Analysis: Numeracy in Economics.

• Author: Larson, Bruce

Edited by Ingrid H. Rima. London and New York: Routledge, 1995. Pp. viii, 462. $99.95.

Measurement, Quantification and Economic Analysis compiles twenty-four papers, most of which appear for the first time, which relate to the roles of measurement and quantification in the development of economic theory; neoclassical economics is emphasized. Rima undertakes the formidable job of imposing order upon them in her paper "From political arithmetic to game theory: an introduction to measurement and quantification in economics" [pp. 1-21].

According to Rima there have been three broad stages of development. In the first, roughly coinciding with mercantilism, "the essential role of measurement and quantification tools was to serve as a policy instrument." This was the era of Petty, Graunt, and King. In the second, "the chief concern of measurement and quantification techniques was the discovery of static economic laws." Here Smith and Marshall seem to define the time period. Finally, in the third stage, "economics is perceived to have emerged . . . as a true science; mathematical formalism is relied on to create economic models which are joined to gaming experiments and econometric tests to evaluate whether the outcomes they generate from data are consistent with the model's predictions" [p. 3]. This is the era of Hicks and Samuelson, Tinbergen and Haavelmo, von Neumann and Morgenstern. It is our era.

Rima's paper leaves one with the impression of progress from the simple to the complex, from the naive to the sophisticated, from the amateur to the professional. As such the development of numeracy and quantification in economics appears as the time equivalent of the Amazon River, originating in the isolated streams of the distant Andes and the earth-laden rivers of the Brazilian forests, continually joining and relentlessly flowing toward oneness with the Atlantic Ocean. There can be little doubt that the progress to which Rima refers has taken place.

It must be recognized, though, that many of the papers of this volume rest uncomfortably in a framework in which the progressive aspects of the development of numeracy and quantification are stressed. In fact, the papers generally draw upon history to make inferences about the role of mathematics in economic analysis -- some outrightly critical. As such they provide historical examples of many of the issues raised in the symposium "Has Formalization in Economics...