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Economics’s Vital Role

Here’s a letter to the Washington Post:


Megan McArdle eloquently explains that humans’ perceptions of reality are often shockingly distorted and biased (“Americans can survive seeing two versions of ‘the dress.’ But not two versions of protests.” July 30). This sobering fact makes the discipline of economics vital.

Economists have always been acutely aware that reality frequently fails to reveal itself fully and accurately to the naked eye. Adam Smith famously explained how the market’s “invisible hand” prompts each individual to pursue his or her own goals in ways that enable millions of strangers to better achieve their goals. Among the most noted essays penned by the 19th-century French economist Frédéric Bastiat is “What is Seen and What is Not Seen.” The efforts of the best economists have been to make visible the invisible hand – to reveal the economic forces at work outside of most people’s line of sight.

Unfortunately, many people enjoy their illusions and despise a discipline that erases them. Other people – especially those seeking political power – have a positive interest in their fellow citizens remaining in the dark about economic reality; all the easier to keep citizens unaware of emergent order, frightened with bugaboos, and blind to the dangers and costs of increasing the power of government to do battle against imaginary monsters.

Donald J. Boudreaux
Professor of Economics
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA  22030