The Infamous “Ceteris Paribus”

Economics is a social science. It deals with human behavior, decision-making, power, scarcity, and the complex web of incentives that drive individuals, businesses, and governments. And yet, for much of its modern history, economics has pursued a level of precision and abstraction more at home in physics than in sociology or anthropology. The seductive allure of clean graphs, elegant equations, and predictive models has led generations of economists to try to tame the chaos of human life using the language of mathematics. At the heart of this attempt is one Latin phrase: ceteris paribus — “all other things being equal.”

This infamous phrase is ubiquitous in economic theory. It is the great simplifier. It allows economists to isolate variables in a world that never, ever cooperates. “If the price of apples goes up, demand will fall — ceteris paribus.” That’s the theory. But in practice, all other things are never equal. Consumers might shift preferences due to trends, health concerns, or advertising. Incomes might be rising or falling. Competing products might be changing in price or quality. The environment is in constant flux. And yet, the assumption persists.

The reason is partly methodological. Economics, especially since the neoclassical revolution of the late 19th century, has aimed to emulate the “hard” sciences, particularly physics. The goal has been to…