Economics Is About Human Interaction
not about impressing with mathematics
"It seems to me that this failure of the economists
to guide policy more successfully is closely connected
with their propensity to imitate as closely as possible
the procedures of the brilliantly successful physical
sciences - an attempt which in our field may lead to
outright error. It is an approach which has come to be
described as the 'scientistic' attitude - an attitude
which, as I defined it some thirty years ago, 'is decidedly
unscientific in the true sense of the word, since it
involves a mechanical and uncritical application of habits
of thought to fields different from those in which they
have been formed.'" -- Friedrich von Hayek, Nobel
Too often well educated individuals take the bit of
focused knowledge they have acquired through years of
schooling and then leverage it to proclaim themselves
experts in other disciplines. In economics most economists
have decided that math and statistics is their field
- an entire discipline has wandered outside of its expertise.
The initiates of the economics inner circle know their
models are inaccurate - they just hope they will prove
useful. Overly complex economic models also serve the
purpose of eliminating competition, few wish to spend
years of schooling creating and understanding models
that they know don't work.
Normal people need
a high priest of the economic future to act as interpreter
of the math based oracles. The priests confusing wording
and frequent guesses allow them the comfort of pointing
back at one of their guesses and stating - "see,
I was right." If
you can't guess right, guess often.
I am not saying that economists exist to make weather
men look good; instead they frequently exist to explain
the mistakes of leadership - even before mistakes are
made. An economist waving his wand and pronouncing appropriate
actions validates a country's leadership taking self-indulgent
short term actions, with terrible long term effects.
After the next election those nasty long term effects
will be someone else's problem.
Since economist John
Maynard Keynes mentioned it might be good, at times,
for the government to spend money; do you think any leadership
has spent less effort selecting
economic advisors than they spend selecting judges?
The economist Keynes, when asked about
large long term problems stemming from expedient short
term solutions, said something like "In the long term
we will all be dead." The oracle said in effect
- we will
look good today, the disaster will be someone else's
Not all economists can be painted with this same brush.
While the peaking of the industrial age has increased
the emotional value of mechanical approaches, there
are still many economists that realize economics is about human
and that humans even on a large scale are very hard to
In short, most economists are fancy talking salespeople.
If they work for a stock broker - they want you to make
a transaction. If they work
for the government, they want you to let it take more
of your money to increase its power. If they work for
a bank - they want you to seek the security they pretend
Do not be fooled by fancy mathematical models, another
economist could deconstruct their model and show its
errors. If you want to listen to an economist, find one
that you can understand, that doesn't make oracle like
pronouncements, and doesn't work for the organization
selling you something.
In all endeavors we as humans
are still quite ignorant,
distrust anyone that tells you they know the future
- however dim their forecast. Walk away from those that
say they not only know the future - they can control
the future. Invariably the latter are trying to sell
Life is not linear, economists using linear methods
distort reality, and create traps. When the economic
conversation turns to statistics and models, turn away.
In economics it is the simple
powerful ideas and the long term approaches that have value.
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