Quotation of the Day…

by Don Boudreaux on September 20, 2016

in Complexity & Emergence, Creative destruction, Economics, Hubris and humility, Man of System, Myths and Fallacies, Scientism

… is from page 304 of the final (2016) volume – Bourgeois Equality – of Deirdre N. McCloskey’s pioneering trilogy on the essence of bourgeois values, on their transmission, and on their essential role in modern life (original emphasis):

The central error of comprehensive socialism or the regulatory impulse is to suppose that betterment does not need to be tested by trade, that no discoveries are to be made by performing cash tests on millions of individual and idiosyncratic people about what they value, that we already know everything we need to know to satisfy and protect the consumers.  Therefore it seems right  and proper to hand over the regulation of the economy to the state – that is, for the state to act, in John Kenneth Galbraith’s brilliant rhetoric of 1952 (which installed the notion in the minds of American Democrats) as a “countervailing power,” a perfectly unbiased referee, between unions and businesses.

The point is that the prejudices against the middleman, the boss, the banker – vile things – if it gets beyond cheap talk, and it often does, can stop cold all discovery, betterment, and creative destruction.

“Progressives” mistake as “science” their habit of lumping countless idiosyncratic individuals and things, each always in an ever-changing set of deeply nuanced circumstances, into catch-all categories (such as “consumers,” “labor,” “government,” “the environment,” “the health-care sector,” “the money supply,” “the unemployment rate,” “the capital stock,” and “imports”) and then theorizing about how these big blobs of people and things interact with each other, and how these interactions can be ‘improved’ by an apolitical, loving, intelligent, ever-diligent scientific guiding hand.  That professors and their graduate students can assemble data on each of these big blobs of people and things, can write intricate equations describing mathematically how the professors and their graduate students imagine these blobs interacting with each other, and use the gathered data and sophisticated software to “test” the equation-ladened “models” seems oh-so-objective and truly scientific.

Yet most such exercises are b.s.  Far too many of these exercises, when done by economists, are done in utter disregard of the meaningful, if impossible to observe from afar, differences that separate from each other each of the individuals and things that comprise each constructed blob.  Far too many of these exercise are done by people whose impressive, deep, and vast knowledge of econometric techniques does not begin to compensate for their innocence of price theory, of history, and of formal and informal institutions.

Correctly taught and understood, economics reveals that reality is vastly more complex than the economically untutored mind realizes.  Yet this message of complexity is unwelcome by those who want to rule and command.  The reason is that to understand the reality of reality’s complexities is to understand that ruling and commanding – the actions of the “man of system” – can only worsen most individuals’ lives.  Ruling and commanding of the sort that “men – and women – of system” itch to do can only disrupt for the worse, and not improve for the better, the spontaneous forces of society.


Add a Comment    Share Share    Print    Email

Previous post:

Next post: