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Quotation of the Day…

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… is the closing line of James Buchanan [2]’s September 1966 Journal of Finance article, “The Icons of Public Debt [3]”; it appears on page 364 of the reprint of this article in Debt and Taxes [4] (2000), which is volume 14 of the The Collected Works of James M. Buchanan [5]:

Let us try to invent more complex and abstruse means of stating the simple propositions; only then can we perhaps carry conviction with the majority of modern economists.

DBx: There are a variety of reasons why too many economists discount, and in some cases almost completely ignore, the elementary propositions of economics that, in my opinion, alone give the discipline of economics scientific legitimacy. A partial list of the reasons why what the late Paul Heyne called the economic way of thinking [6] is not the way of thinking of many economists include:

– Once grasped, the basic principles of economics appear to be too obvious to be the tools of rigorous Scientific work; the thinking seems to run along these lines: ‘Explaining economic reality must require more complex tools and models than these relatively few and obvious ones.’ So the truly scientific core of economics is jettisoned and replaced with complicated tools and models that appear to be Scientific.

– To grasp the basic principles of economics is to become awe-inspired by the marvels of the creative and coordinating powers of free markets and, simultaneously, also to become deeply skeptical of the ability of governments to improve matters with any of the various interventions that are ever-popular. I suspect that many economists resist what they wrongly interpret to be an ideological bias stirred in those who adhere to the economic way of thinking. Admirably committed to being unbiased and scientific, some economists who grasp the economic way of thinking ironically temper it under the wrongheaded assumption that only then will they be – or only then will they appear to their colleagues and the general public to be – unbiased, scientific, and professional.

– Economists remain enchanted by scientistic fallacies and, thus, believe that economic science is much like astronomy: the role of the economist is believed to be to observe as carefully as possible the objective ‘facts’ of economic reality, to measure and record these ‘facts,’ and then to report these ‘facts’ in much the same way that an astronomer observes, measures, records, and reports the facts of the cosmos. (To anticipate an objection: In this paragraph I put scare quote-marks around ‘facts’ not because I believe there to be no true facts of economics; I most certainly hold no such belief. Rather, the scare quote-marks indicate that far too much of what economists treat as facts are artifactual constructions – such as “the” energy sector, or “the” top one-percent of income earners – the boundaries and substances of which are far more fluid and judgment-determined than is realized by economists who theorize about these ‘facts.’)

– Related to the point just above is the fact (!) that economic training more and more is training in technique and a corresponding crowding-out of attention to price theory and, more generally, the economic way of thinking. Students who excel at mathematics, data processing, and computer science are attracted to economics while students who would excel at doing price theory and who have a knack for the economic way of thinking are discouraged from pursuing advanced study in economics.

– Non-economists – and especially journalists and politicians – are excessively impressed with economists whose works look Scientific and who offer precise numbers and detailed predictions. Yet ironically, one of the core conclusions of reasoning done with the economic way of thinking is that economic reality is too complex and dynamic to make most such offerings legitimate.