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Quotation of the Day…

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… is from page 51 of my late Nobel-laureate colleague Jim Buchanan [2]’s 1996 paper “Economics as a Public Science,” as this paper is reprinted in Economic Inquiry and Its Logic [3] (2000), which is volume 12 of the Collected Works of James M. Buchanan [4]:

That which is observed as economic reality may, indeed, be modified by changes in the rules within which human behaviour is allowed to take place. But that which is romantically imagined is no more possible in economics than in the more clearly restricted realms of the natural world. Economics, and economists, must make the categorical distinction between science fiction and potentially attainable reality. Failure to do so can produce results both exemplified by and experienced in the human tragedy of this century’s failed pursuit of the impossible socialist idyll.

DBx: Yes. The most important job of the good economist is the unenviable one of dashing the dreams of well-intentioned people who share with the good economist the same dismay at the suffering, privation, and plain misfortune of fellow human beings.

While another important job of the good economist is to help identify realistic means of improving the world, most of the good economist’s time and effort are spent playing whack-a-mole with unrealistic – and, therefore, counterproductive (and sometimes even calamitous) – ideas for improving the world.

There is indeed an economic reality that, like physical reality, will lead to harm if actions inconsistent with that reality are taken. People fueled excessively by their emotions – for example, “Progressives” who demand minimum wages as a means of raising the incomes of poor workers, or “conservative nationalists” who scream for tariffs as a means of strengthening the national economy – overwhelmingly don’t want to hear that the schemes dictated to them by their emotions not only will not work as planned, but will backfire and make matters worse even by these dreamers’ own criteria.

And so these dreamers, rather than thank the good economist for pointing out flaws in their schemes, ridicule the good economist and accuse her of all manner of sins of which she is innocent – sins such as believing that “only money matters,” or of being a mercenary spokesperson for the plutocracy, or of simply being enslaved by some antiquated ideology.


(The quotation above from Jim would be a bit more precise had he written, not “science fiction,” but “social fiction.”)