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Quotation of the Day…

… is from page 436 of the 2014 collection – The Market and Other Orders (Bruce Caldwell, ed.) – of some of F.A. Hayek’s most influential essays; specifically, it’s from Hayek’s 1963 lecture, delivered at the University of Chicago, “Economists and Philosophers”:

The characteristic problems of the social sciences seem to me to arise out of the fact that neither acting man nor the social scientist can ever know all the facts which determine human action and that the problem of the social sciences is essentially how man copes with this essential ignorance.

Indeed so.  This reality gives rise to at least two important characteristics of the good economist.

The first characteristic is his or her insistence on constantly remaining alert to unintended and unseen consequences.  The good economist does more than recognize that there are economic consequences that generally escape the notice of the ‘man in the street.’  The good economist also is ever-aware that the words we use, the data we collect, the particular ‘models’  that we use for our analyses, the aggregates in which we have become accustomed to think and about which we theorize (such as “the U.S. economy” or “the teen unemployment rate”), and the familiar surroundings of our daily lives themselves can often blind us to important aspects of reality. The good economist never fancies that his or her favorite theories and models (no matter how impressive to historians and other social scientists less skilled at math) can possibly reveal all of the vital details of economic reality.

The good economist, in short, knows that there is a great deal of relevant detail about reality that he or she does not and cannot possibly know.  The good economist, therefore, is content to understand the general principles and patterns of human action, interaction, and spontaneous formation of social phenomena such as prices, advertising, large-scale enterprise, economic growth….  this list is practically endless.

And thus the second notable characteristic of the good economist: a focus on the formation and role of rules and institutions.  This focus almost necessarily comes along with a scientific skepticism of social-engineering schemes, big and small.  The good economist understands, deeply, his or her “curious task” and knows that this task never involves designing “improvements” to be imposed or mandated by the state.

The good economist is never very impressive to the ‘man in street,’ to politicians, or to pop-journalists, for the good economist, when talking to these people, mostly tells them that their assumptions are false and their fancies are futile.  The good economist never offers grand blueprints for saving society.  For this reason, the good economist will never be celebrated in ways that faux economists – those who assure the man-in-the-street and his pandering politicians that their superstitions and hopes are valid – are celebrated.


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