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Quotation of the Day…

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… is from page 21 of Diane Coyle’s just-released volume, GDP [2]:

Indeed, the idea of the economy as a machine, regulated by appropriate policy levers, took firm hold [in the post-WWII years].  Such firm hold that the engineer-turned-economist Bill Phillips built an actual machine showing the flow of income in the economy and the routes through which government policy could increase that flow.  A few of the machines remain in universities, as curiosities – but the “engineering” mindset still has a firm grip on economic policy.

One way to describe what distinguishes George Mason University’s economics faculty from the economics faculty of almost any other PhD-granting university is that, at GMU, we reject the notion that the economy is a relatively simple machine-like arrangement.  We, at GMU, understand that the parts and interactions of the economy cannot possibly be known in sufficient detail by an observer of the whole in order to allow that observer to sensibly engineer desirable changes in the economy.  We, at GMU, understand that the aggregated data that so fascinate so many economists today are artifacts whose construction reflects a particular theory of what ‘facts’ are relevant and of how those ‘facts’ interact with each other.  (And we, at GMU, understand also that even if the economy could in principle be successfully engineered, no human being or set of human beings is to be trusted with the power to carry out that task.)