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Quotation of the Day…

… is from page 212 of the late Daniel Boorstin’s great 1973 volume, The Americans: The Democratic Experience:

Within a decade after the passing of the Income Tax Amendment, a new phrase, “National Income,” had entered the vocabulary of economists and was heard in the more sophisticated political speeches.  The phrase and the concept were products of imaginative scholars in the new social sciences who were building institutions to gather quantitative facts and explore their meaning.  What the new American law schools were to American faith in legislation as ways of shaping society (what Dean Roscoe Pound of Harvard Law School called “social engineering”), these new American institutes of economics were to the American faith in quantitative norms.

This development in economics was simultaneously profoundly good and profoundly dangerous.

Data are of course very useful (although they – also of course – never ‘speak for themselves’; theory is always necessary and in play; especially in the social sciences, data standing alone are meaningless).  But the intellectual mindset of the early- and mid-20th century ran too much toward the notion that society and the economy are machine-like, and machines need engineers and mechanics.  (Note Roscoe Pound’s description of the role of legislation.)  The reality and role of spontaneous order were tossed into the intellectual shadows.  The importance and dignity of the flesh-and-blood individual was hidden beneath piles of aggregate data on quintiles, deciles, “total” this and that, and a variety of more or less subjective (and often suspect) collective categories (for example, “white,” “negro”; “American”; “Southern”; “goods-producing industries”).  The relatively few scholars who, during those days, emphasized spontaneous order and who insisted that much relevant social and economic reality is not capturable in quantitative data (especially Mises and the Hayek) were denigrated as being old-fashioned and unscientific – naive or bone-headed antiquarians who missed the bullet train to Modernity.

Data, again, are vitally important, but a danger lies in the fact that their ready and voluminous existence gives the wholly mistaken impression that the economy is a machine, and that its features, parts, and outcomes are more objective than they really are.  This ready and voluminous existence of data, therefore, fuels the passions and ambitions of men and women ‘of system’ to use the force of government to engineer society and the economy into states that these men and women of system always naively and unscientifically believe are ‘correct.’