I think having a background as a physicist is kind of fortuitously good for people who work on Wall Street because there are a lot of fields that use mathematics, but physics is sort of the field par excellence. It has made the best use of mathematics. And I think physicists understand what’s a really good theory and what’s accurate and they also, in their every day life, work on models which are like approximations that give you some idea of the way something behaves. And they have a good sense for what’s a good theory and what’s a good model and where the boundary lies between them.
Mathematics is a way of formulating an idea, not an idea itself. At least, that’s the way I look at it. And when you look at people who come straight out of pure mathematics - obviously there are exceptions - they tend to get too entranced by the mathematics itself and less about the actual idea. Physicists, however, are concerned with nature, Mathematics is, to some extent, the language in which they express it. And if you forget that if you’re trying to describe people or nature or objects, I think you loose a lot and you go wrong. So I think that’s the advantage of coming from a physics background.
Unfortunately these days economists have become increasingly in love with mathematics too. And if you look at economics journals, they look superficially much more rigorous than physics journals do. They look like they’re living in the world of pure mathematics and axioms and theorems and lemurs and they’re superficial rigors sort of inversely proportional to the actual use you can put it to. It’s not their fault, but I think economists tend to put too much reliance on their mathamatizing some of their ideas.
In Their Own Words is recorded in Big Think's studios.
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