Notes on the Keynes-Ramsey Rule

Abstract

Keynes has often been associated with a contemptuous view of mathematical economics. After all, it was he who wrote (Keynes, 1936, pp. 297–8):

It is a great fault of symbolic pseudo-mathematical methods of formalising a system of economic analysis, such as we shall set down in section VI of this chapter that they expressly assume strict independence between the factors involved and lose all their cogency and authority if this hypothesis is disallowed; whereas in ordinary discourse, where we are not blindly manipulating but know all the time what we are doing and what the words mean, we can keep ‘at the back of our heads’ the necessary reserves and qualifications and the adjustments we shall have to make later on, in a way in which we cannot keep complicated partial differentials ‘at the back’ of several pages of algebra which assume that they all vanish.

It is not my purpose to dissect this passage although it strikes me as contrary to general experience. No one I think is worse than the truly non-mathematical economist at holding at the back of his head the fact of his particular assumptions, or indeed of doing anything about them later on. However, everyone would agree that there is no substitute for flair and there can be little doubt that Keynes’s words were particularly directed at Professor Pigou, of whose mathematical economics, flair was not a notable feature.