Brian Arthur and Paul David, two economists, have developed a parallel idea, that of path dependence. This post is about false statements Stan Liebowitz and Stephen Margolis like to make about this work. Liebowitz and Margolis quote Paul David:
"The foregoing account of what the term 'path dependence' means may now be compared with the rather different ways in which it has come to be explicitly and implicitly defined in some parts of the economics literature. For the moment we may put aside all of the many instances in which the phrases 'history matters' and 'path dependence' are simply interchanged, so that some loose and general connotations are suggested without actually defining either term. Unfortunately much of the non-technical literature seems bent upon avoiding explicit definitions, resorting either to analogies, or to the description of a syndrome - the set of phenomena with whose occurrences the writers associate path dependence. [Rather than telling you what path dependence is, they tell you some of the symptomology - things that may, or must happen when the condition is present. It is rather like saying that the common cold is sneezing, watering eyes and a runny nose.]" -- Paul DavidLiebowitz and Margolis somehow think you will be persuaded to believe the following:
"So here we see David disqualifying, at least from others, any efforts to connect path dependence to observable phenomena. David would have path dependence discussed only in the context of the most severe abstraction, an immaculate concept immune from criticism: it is a dynamic stochastic process that is non-ergodic." -- Stan Liebowitz and Stephen MargolisNotice Paul David never says that path dependence, under a rigorous definition, never will be manifested in observable empirical phenomena. Elsewhere Paul David notes that Markov processes can be non-ergodic, that is, path dependent. And he notes that economists have connect Markov processes, not all of which need be path-dependent, to observable penomena:
"Homogeneous Markov chains are familiar constructs in economic models of the evolving distribution of workers among employment states, firms among size categories, family lineages among wealth-classes or socio-economic (occupational) strata, and the rankings of whole economies among in the international distribution of per capita income levels." -- Paul DavidWhy are certain economists so willing to tell untruths?
- W. Brian Arthur (1989) "Competing Technologies and Lock-In by Historical Small Events", Economic Journal, V. 99, N. 1: pp. 116-131.
- W. Brian Arthur (2009) The Nature of Technology: What It Is and How It Evolves, The Free Press. [I haven’t read this]
- Paul A. David (1985) "Clio and the Economics of QWERTY", American Economic Review. V. 75, N. 2 (May): pp. 332-337.
- Paul A. David (2000) "Path Dependence, It's Critics and the Quest for 'Historical Economics'"
- Paul A. David (2007) "Path Dependence - A Foundational Concept for Historical Social Science", Cliometrica, V. 1, N. 2: pp. 91-114 (working copy)
- Stan J. Liebowitz and Stephen E. Margolis (2010) "How the Lock-In Movement Went off the Tracks"