I find that I spend a considerable amount of my time spent on the ‘net talking economics. As such I usually find myself talking to two different types of people: Those who hold the field of economics in high esteem, and those who think it’s snake-oil designed to keep our elites in power and rolling in the dough.
Not that anyone asked, but here’s what I think. I view it through two lens:
Economics is the study of complex systems
As such it’s helpful to think of it as akin to big physics (with a caveat so important it’s my second point). Like physics, our understanding of economics has progressed significantly over the centuries. We can state with certainty specific things, state with high confidence other things, and have a pretty good hunch on a lot more. But there’s still a lot we don’t know. And in fact, we might not even know what we don’t know.
Economics is not the study of a natural system
Unlike physics, economics is the study of a complex system created by human hands. As such, for all the attempts at empiricism, it’s ultimately beholden to the whims of follies of human nature. Why is gold so valuable? It has some interesting physical properties, but its industrial value is limited. It doesn’t shelter or feed us. It’s [elevated] value is solely the product of the legacy that ancient humans thought it valuable.
Economics does not operate independently, but is subject to constant rational – and irrational – political considerations that stand apart from the economic system. A recent example is the policies of austerity being employed in Europe. As constantly pointed out by Paul Krugman & others, austerity goes not only against past understanding of economics but the data that clearly shows it to be a failure. So why does austerity continue to be pushed? Because the economic outcome is not primary concern. Whether it’s the Shock Doctrine being deployed or that it stems from some more primitive impulse1 – the economic system is a system beholden. Why do North Americans insulate their agricultural industry when economic orthodoxy makes the strong case that dropping tariffs & subsidies will bring the best outcome for the North American consumer?
Because agriculture is about national security, not economics. A nation that cannot feed itself is incredibly vulnerable.
So while the one side of me appreciates the field of economics and I love to peruse and cite economic data, I’m also aware on another level we are dealing with, basically, voodoo.
1For many see economics as a morality play. One is poor not because of vast & complicated socio-economic factors, but because one is a lazy motherfucker…who deserves to rot.