Whether Economics exist without assumption?

Answer 1

As an economist that answer is a little challenging. The first graduate school lesson I learned was that newbies challenge assumptions, professional economists challenge the accuracy of theories.

The standard in economics is not are the assumptions good or bad but does the theory model reality well. Most assumptions make physical sense.

Let me provide an example of an assumption and you can decide if the assumption makes sense.

Let us assume that your satisfaction or utility to use economic terms, from eating food is concave in quantity, in the absence of satiation.

What does that mean?

It means that as your stomach gets full, very little additional satisfaction comes from eating the next bite.

Let's assume the reverse, that it is convex. Then as you ate more, you would get increasingly happy. Eventually your stomach would explode, but you would be in such bliss you would continue eating until ultimately you bled out and died.

Another assumption, lets assume the quantity of work you perform is concave in hours. That means that when you start your day you are generally wide awake, but the longer you are compelled to work, the less effective and the more tired you become. The same of course would be true for machines, they wear out and become ineffective with enough usage.

Assumptions in economics are not always "true," but are useful approximations of the truth. The example of concavity is false because you may over eat and fill miserable. You not only can see diminished returns, you can actually lose ground in terms of physical satisfaction. That is still concavity, but it is concavity with a maximum value which would be an additional assumption.

One assumption that most people misunderstand comes from Walras' Law. Walras observed that economic constraints are always over constrained models. Since the models are knowingly over constrained, you can choose any of the over constraining equations to drop. You can assume the bond market or the market for government goods does not exist and the model will not lose information.

It is true, for example, that the government's actions matter, but since that information is already contained in consumer, producer and financial behaviors, dropping the government, in the absence of a policy change, results in no change in the models. If you are modeling governmental impacts you would of course keep the government and drop something else. In fact, for the models to work, you must drop something.

The other big classes of assumptions refer to time. Time varies in importance and effect in different models depending upon what you are doing and what you are studying.

Nominal variables, such as a fixed minimum wage, impact the economy in the short run but not the long run. In the long run, the inefficiencies created by a minimum wage simply factor into the behavior of the public. In the short run, it is very damaging to the poor. In the long run, that damage gets institutionalized and so everything runs with that constraint in the background and so it can be ignored.

Assumptions are useful because the goal of a model is to reduce complexity not describe the environment. We already have a perfect description of the world, the world itself. Models look at a simplified world to understand relationships between variables. A less complex model is better in most cases than a more complex model.

As an example, find the highest point in your room.

If you looked up, you used a simple strategy.

Now instead, completely investigate and measure all things in the room and find it empirically.

It is much easier to look up.

Assumptions permit extraneous information to be dropped, such as the vertical distance of everything not on the ceiling.

So your assumption was that you could ignore the things below ceiling level.

Economics does exist without assumptions, models do not.

Answer 2

I can barely get through OPM's answer.

The reason political science and sociology are so much better is because they start more with observation than assumption. They might note that .1% of the people own 50% of the wealth and then laugh at the idea that a tax on these people would hurt anything. They instinctively know that these people have 0 opportunity cost and make large profits and that regulation will do very little harm. In economics we assume everyone is living and buying on the margin and will instantly quit whatever they are doing if they are taxed or regulated. It is shear nonsense.

Most of what we consider economics is a simple justification for the business or ruling class. As such, it must be developed abstractly, with mathematics and a great deal of assumptions. Without those assumptions, you very likely devolve into politics or sociology, or perhaps statistics, accounting and finance, and linear programming.

Answer 3

No. We assume a lot when I use Economics to find answers.
As an academic "science" it does not exist without formal assumptions. These assumptions show how realistic (usually very abstract) the theory is and allow us to analyse the models.
However the models that exist and are widely used do not match very well with known models of human behaviour or even with matched simulations of human behaviour.

Even more realistic models would never be able to deal wth all the contradictions of humans though:
some assumptions essential to Economics have been falsified by Psychology: even the assumption of a single value of money has been shown many times not to hold (look in any Psychology source under research into Bayes Theorem for example).

Answer 4

You got a limited response because the billionaire class bought out the Democrat party decades ago, so there is actually nobody championing the liberal cause. Liberals know something is terribly wrong, but they have nobody to lead them and can't even articulate what's wrong. All we've had for 40 years is Con propaganda, and it's working. The answer you got is pretty good, but you're not able to understand it because you lack knowledge - you only know the con talking points. Cons have destroyed America with 40+ years of reckless, idiotic tax slashing on the super-rich and big corporations and "borrow & spend" economic policies (and reckless warmongering). We are a third world country now, on our last legs, and intelligent people realize that if you're not already rich, you have very little chance in today's America - people are too beaten-down and disillusioned to even believe in goal-setting anymore. By the way, when is that "trickling down" supposed to start? It's been 40+ years!!!! Don't you get it? They're p*ssing all over us - they call us peons. Wake up already! Big American corporations and super-rich are sitting on TRILLIONS of capital which they are not investing in the economy - THAT'S where the capital is. Why won't they spend it on hiring and getting people back to work? Because the working- and middle-class - the bottom 99% - are BROKE - hence there is nobody to buy anything. Who are American capitalists going to sell to now? The Chinese? LOL - never - the Chinese copy and make their own stuff - they're not going to buy anything from us if they don't have to. Henry Ford paid his workers an above market wage, so they could buy his cars. Today's billionaires are selfish, greedy idiots - they have been destroying America for over 40 years - we're almost finished. “There’s class warfare, all right,” Mr. Buffett said, “but it’s my class, the rich class, that’s making war, and we’re winning.” Do yourself a favor - seek out and try to understand the liberal perspective - it's hard to find, but it's out there - try Atlantic magazine.