“Keynes didn’t make an all-out assault on Economic Man, but he often resorted to plausible psychological theorizing rather than careful analysis of what a rational decision-maker would do. Business decisions were driven by “animal spirits,” consumer decisions by a psychological tendency to spend some but not all of any increase in income, wage settlements by a sense of fairness, and so on.
But was it really a good idea to diminish the role of Economic Man that much? No, said Friedman, who argued in his 1953 essay “The Methodology of Positive Economics” that economic theories should be judged not by their psychological realism but by their ability to predict behavior. And Friedman’s two greatest triumphs as an economic theorist came from applying the hypothesis of rational behavior to questions other economists had thought beyond its reach.”

— Paul Krugman

"Who Was Milton Friedman?", The New York Review of Books (February 15, 2007)
The New York Review of Books articles

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Paul Krugman 106

American economist 1953

Harold Koontz (1909–1984)

Source: "The Management Theory Jungle," 1961, p. 180

“I would rather have a wrong decision made than no decision at all.”

Robert S. McNamara (1916–2009) American businessman and Secretary of Defense

Quoted in: Charles A. Stevenson (2006), SECDEF: The Nearly Impossible Job of Secretary of Defense http://books.google.com/books?id=2NXbS5AG_8QC&pg=PA28, p. 28

“There is much evidence that people are not rational, in the economist’s sense; nor do they take into account expectation, in the precise interpretation of that word. As a result economic theory often does not correspond with what happens in the market. Some would argue that we need descriptive economics. I would argue that all should be taught about probability, utility, and MEU (maximization of expected utility) and act accordingly.”

Dennis Lindley (1923–2013) British statistician

2. Stylistic Questions. p. 22.
Understanding Uncertainty (2006)

“What’s odd about Friedman’s absolutism on the virtues of markets and the vices of government is that in his work as an economist’s economist he was actually a model of restraint. As I pointed out earlier, he made great contributions to economic theory by emphasizing the role of individual rationality—but unlike some of his colleagues, he knew where to stop. Why didn’t he exhibit the same restraint in his role as a public intellectual?
The answer, I suspect, is that he got caught up in an essentially political role. Milton Friedman the great economist could and did acknowledge ambiguity. But Milton Friedman the great champion of free markets was expected to preach the true faith, not give voice to doubts. And he ended up playing the role his followers expected. As a result, over time the refreshing iconoclasm of his early career hardened into a rigid defense of what had become the new orthodoxy.
In the long run, great men are remembered for their strengths, not their weaknesses, and Milton Friedman was a very great man indeed—a man of intellectual courage who was one of the most important economic thinkers of all time, and possibly the most brilliant communicator of economic ideas to the general public that ever lived. But there’s a good case for arguing that Friedmanism, in the end, went too far, both as a doctrine and in its practical applications. When Friedman was beginning his career as a public intellectual, the times were ripe for a counterreformation against Keynesianism and all that went with it. But what the world needs now, I’d argue, is a counter-counterreformation.”

Paul Krugman (1953) American economist

"Who Was Milton Friedman?", The New York Review of Books (February 15, 2007)
The New York Review of Books articles

“All economic decisions, whether private or business, as well as those involving economic policy, have the characteristic that quantitative and non-quantitative information must be combined into one act of decision. It would be desirable to understand how these two classes of information can best be combined.”

Oskar Morgenstern (1902–1977) austrian economist

Attributed to Morgenstern in: John H. McArthur, ‎Bruce R. Scott (1969), Industrial planning in France. p. 21.

“The man who has an intelligent child is doomed to spend his life justifying every decision he makes.”

Orson Scott Card book Stone Tables

Stone Tables (1997)

“The dictionary defines "economics" as "a social science concerned chiefly with description and analysis of the production, distribution, and consumption of goods and services." Here is another definition of economics which I think is more helpful in explaining how economics relates to software engineering.
Economics is the study of how people make decisions in resource-limited situations.
This definition of economics fits the major branches of classical economics very well.
Macroeconomics is the study of how people make decisions in resource-limited situations on a national or global scale. It deals with the effects of decisions that national leaders make on such issues as tax rates, interest rates, foreign and trade policy.
Microeconomics is the study of how people make decisions in resource-limited situations on a more personal scale. It deals with the decisions that individuals and organizations make on such issues such as how much insurance to buy, which word processor to buy, or what prices to charge for their products or services.”

Barry Boehm (1935) American software engineer

Source: Software engineering economics. (1984), p. 4

“Motives, attitudes, and expectations of consumers and businessmen play a significant role in determining spending, saving, and investing and that modern psychology provides conceptual as well as methodological tools for the investigation of economic behavior.”

George Katona (1901–1981) American psychologist

George Katona, Psychological economics. Elsevier, 1975.

“The Psychology of Delay. Some of the causes of delay in coming to economic decisions in our country seem to lie in the psychological realm. There is such a thing as the psychology of power which motivates people: power of control and patronage, power to delay an application, power to hold up a file, power to keep people waiting in an ante-room, all of which are consciously or subconsciously treated as symbols of prestige and hallmarks of importance.”

J. R. D. Tata (1904–1993) Indian businessman

To The Central Advisory Council of Industries, New Delhi, January 3, 1969.
Keynote: Excerpts from his speeches and chairman's statements to shareholders

“The idea of African brotherhood is often just a cover-up for laziness. We must see what is achievable in our circumstances and evaluate all decisions. In terms of regional economic integration, sentimentality is not enough. We really have to be frank and honest.”

Benjamin Mkapa (1938) Tanzanian politician and former president

September 1999 http://ospiti.peacelink.it/npeople/sep99/Pag1sept.html
1999

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Paul Krugman 106

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