It is not that there exists any fundamental reason why mathematics should not be used in economics. The arguments often heard that because of the human element, of the psychological factors etc., or because there is--allegedly--no measurement of important factors, mathematics will find no application, can all be dismissed as utterly mistaken. Almost all these objections have been made, or might have been made, many centuries ago in fields where mathematics is now the chief instrument of analysis.
The lack of real success is largely due to a combination of unfavorable circumstances, some of which can be removed gradually. To begin with, the economic problems were not formulated clearly and are often stated in such vague terms as to make mathematical treatment a priori appear hopeless because it is quite uncertain what the problems really are. There is no point in using exact methods where there is no clarity in the concepts and issues to which they are to be applied. Consequently the initial task is to clarify the knowledge of the matter by further careful descriptive work. But even in those parts of economics where the descriptive problem has been handled more satisfactorily, mathematical tools have seldom been used appropriately. They were either inadequately handled, as in the attempts to determine a general economic equilibrium by the mere counting of numbers of equations and unknowns, or they led to mere translations from a literary form of expression into symbols, without any subsequent mathematical analysis.1
Theory of Games and Economic Behavior↩