Economic theorists are often criticized for making assumptions that conflict with what practitioners haughtily term the "real world." Since these practitioners seem unmoved by simple, elegant models, I offer instead that the law is on our side.
First, the Honorable Irving Loeb Goldberg outlawed empirical work over thirty years ago, instead favoring sound theorists:
The expert ... need not be armed on the right hand with a slide rule, on the left hand with a computer. He is allowed some economic imagination so long as it does not become fantasy.1
But how can we publish entirely contradictory theories, often by the same author, and occasionally in the same journal? Judge MacMahon channels F. Scott Fitzgerald,2 ruling:
An expert's assumptions, if within the realm of reason, need not be the only possible set of assumptions based on the data.3
Even if my theories are at odds with the data, no less than the Supreme Court of these United States has forbidden you from challenging me:
Even assuming that any economic assumptions ... might be disproved in a specific case, we think it an unwarranted and counterproductive exercise to litigate a series of exceptions.4
1Terrell v. Household Goods Carriers' Bureau, 494 F.2d 16, at 25 (5th Cir. 1974)
2"The true test of a first-rate mind is the ability to hold two contradictory ideas at the same time."
3International Wood Processors v. Power Dry, Inc., 593 F. Supp. 710 (D.S.C. 1984)
4Kansas v. UtiliCorp United, Inc., 497 U.S. 199, at 217, 111 L. Ed. 2d 169, 110 S. Ct. 2807 (1990)
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