Monthly Archives: January 2022

“Economics: The romance of truth through measurement.

An understanding of the value of economics can best be established by using its own methods. Draw up a list of the large economic problems that have struck the West over the last quarter-century. Determine the dominant strand of advice offered in each case by the community of economists. Calculate how many times this advice was followed. (More often than not it was.) Finally, add up the number of times this advice solved the problem.

The answer seems to be zero. Consistent failure based on expert methodology suggests that the central assumptions must have been faulty, rather in the way sophisticated calculations based on the assumption that the world was flat tended to come out wrong. However, streams of economists are on record protesting that they weren’t listened to enough. That the recommended interest rate or money supply or tariff policy was not followed to its absolute conclusion.

This ‘science’ of economics seems to be built upon a non-scientific and non-mathematical assumption that economic forces are the expression of a natural truth. To interfere with them is to create an unnatural situation. The creation and enforcement of standards of production are, for example, viewed as an artificial limitation of reality. Even economists who favor these standards see them as necessary and justifiable deformations of economic truth.

Economic truth has replaced such earlier truths as an all-powerful God, and a natural Social Contract. Economics are the new religious core of public policy. But what evidence has been produced to prove this natural right to primacy over other values, methods and activities?

The answer usually given is that economic activity determines the success or failure of a society. It follows that economists are the priests whose necessary expertise will make it possible to maximize the value of this activity. But economic activity is less a cause than an effect—of geographical and climatic necessity, family and wider social structures, the balance between freedom and order, the ability of society to unleash the imagination, and the weakness or strength of neighbors. If anything, the importance given to economics over the last quarter-century has interfered with prosperity. The more we concentrate on it, the less money we make.”

Excerpted from: Saul, John Ralston. The Doubter’s Companion. New York: The Free Press, 1994.