By James McCusker
Agincourt is a village in northern France, about 20 miles from the Atlantic seacoast. With a population of just over 300 people, it would barely register on the world’s consciousness, except for one thing. Six hundred years ago a remarkable battle was fought there and won by an unlikely English force over the best army the French.
The date of the battle was Oct. 15, 1415, and Agincourt was enjoying the famously bad weather of the Pas-de-Calais area in autumn. Cold rains had soaked the area for days.
It was a holiday in England, St. Crispin’s Day. The English troops, though, led by Henry V, had marched through the rain all night until arriving, just before the battle, as thoroughly soaked as their surroundings. Hungry, soaking wet, and tired, they were a bedraggled bunch.
They faced a disciplined French army that had been lying in wait for them for several days; long enough to build temporary shelters from the chilling rain. The troops were fresh, rested, and had taken up positions to block Henry’s escape route to the seacoast. The French troops, bolstered by cavalry and artillery were eager for the fight.
It certainly did not look good for the English, who in addition to their fatigue were outnumbered five to one — “fearsome odds” as one of Henry’s officers described the situation in Shakespeare’s version. In fact, if modern mathematics and statistical modeling techniques were applied, the chances of an English victory were close to nil. The smart money would be on the French.
It would take the mother of all motivational speeches to transform this bedraggled bunch and its dispirited leaders into a band of brothers that would not accept defeat. Henry delivered just that in his “St. Crispin’s Day” speech, immortalized by Shakespeare, but based on the historical fact of the king’s ability to rally his troops and ready them for the battle.
Henry’s words, or Shakespeare’s if you prefer, were given a boost by some factors which appeared as negatives but turned out to favor the English. The same rains which soaked the English troops unto misery turned the battlefield and the entire surrounding area into a muddy mess. The French artillery was mired down and could not be brought to bear effectively, and the mud even bogged down the cavalry, severely limiting its mobility and battlefield effectiveness.
In the end, against all odds the English won. And, nearly 600 years later, English schoolboys still commit Henry’s St. Crispin’s day speech to memory.
So should we. Or, at least we should commit to memory a lesson learned from that Agincourt battle: when human behavior is involved, math and statistics can help us understand the past but they cannot predict the future. They can uncover patterns of behavior and these added insights can help us make better forecasts… sometimes.
Economic forecasts are like bank loans, though. Just as it is easy to borrow money if you don’t need it, economic forecasts are most accurate when you least need them — because things aren’t changing much.
The potential and the limitations of math in economics have once again become an important issue in the econ industry. Part of this was the result of the puffery-busting failure of Long Term Capital Management (LTCM) and its showcase wonks. The main impetus, though, came from the colossal failure of Wall Street’s forecasting models that had been developed by its own mathematicians and economists from our country’s best schools. The failures caused economists to rethink their devotion to ever deeper mathematics.
A recent article by Paul Romer in the American Economic Review, one of the most prestigious economic journals, was titled “Mathiness in the Theory of Economic Growth.” In it, NYU Professor Romer defines mathiness as a style of argument that “lets academic politics masquerade as science.”
Professor Romer’s very thoughtful journal article pointed out that simply writing or talking in a mathy way can cause us to overvalue an idea because the math disguises its flaws. It doesn’t take a leap of imagination to see how this applies to our current romance with ”Analytics,” “Big Data,” and “The Cloud.” Each of these terms has the vague, mathiness quality used to disguise its limitations and make it more attractive to both corporate buyers and the public.
Overall, the rigor of mathematics has helped economics distance itself from fantasy and build a theoretical structure that is sound and worthwhile. There has been a tendency in economics, though, to use mathematics sometimes as a substitute for thought rather than its disciplinarian.
The lesson of Agincourt is worth remembering. Predictions don’t always work out, odds-on favorites don’t always win, and math’s usefulness and beauty shouldn’t blind us to its limitations.
James McCusker is a Bothell economist, educator and consultant. He also writes a column for the monthly Herald Business Journal.
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