By David James.
Economics may not be a science, but it is an extreme example of scientism: the bane of what is laughably referred to as modern civilisation. Scientism, the religion that science should be applied far beyond what it is devised to do, has in economics been turned into a reversal of what causes what. Whether a cart is pulling a horse or a horse pulling a cart. Volition, that which impels human behaviour, is removed, producing at times comic results.
Economist pseudo-scientists alight, as all would-be scientists do, on what is measurable. Quantifiable. You know, those wonderfully reassuring numbers that preferably involve a % sign or two. This means that the focus is on transactions, because that is mainly what economic measures are (although occasionally we get something a bit more fuzzy like measures of “sentiment” which disturbingly hint that there might be some shadowy creatures, customers or investors, behind all those concrete numbers).
This results in putting transactions before what causes the transactions. That is, transactions come first, human being second. It produces some amusing contradictions. We saw an example of this in this comment about Pippa Malmgren, an economics pundit, who is opining that Australia has not actively diversified its industry base to deal with Dutch disease brought on by the mining boom. The comment was this:
(Malmgren) is an economic neo-liberal. Yet here she is asking why it is that we embraced the Dutch disease thrust upon us by global markets.
Why, in other words, would someone, a neo-liberal, who believes that markets should roam free – in other words that nations should be ruled by the price mechanism – be arguing that markets should have been shaped by human (even, perish the thought, government) action? That is, Australia should not have let itself be ruled by the price mechanism. One minute we let the cart pull us. Next minute, when the cart does not take us where we want to go, we complain that the horse hasn’t done enough. Time to blame the horse, I suppose, which is where the article went.
This is the ambivalence of scientism. On the one hand, anything that resembles an industry policy is demonised, especially by poorly educated economists in Canberra, as a distortion, an interference in the price mechanism. We must let those prices roam free, gorgeously intersecting the balance of supply and demand.
On the other hand, if we don’t like the results, we turn to our lack of volition in changing things to our advantage.
So here’s a couple of suggestions.
- First, introduce some basic philosophy into economics education. I know it’s too late for those who have already got their “training”, but maybe we can help a little for the future.
- Explain patiently that humans create artefacts, not the other way round. Money and the architecture of capital is a social artefact, they are the rules by which we live. Volition comes first.
- Gradually introduce ideas like actions and consequences, and, if you are feeling really brave, responsibility for those actions. Don’t want to scare the horses. Sorry, carts.
Scientism is enough of a problem with the genuine sciences. As the brilliant author GK Chesterton observed, the “rebuilding of this bridge between science and human nature is one of the greatest needs of mankind.” This is even more required in a pseudo-science, a social science, that is supposedly concerned with human behaviour. Yet all economics can come up with on human nature is tautologies about “rational choices”. Actually, that is a bit unfair. Paul Romer’s ideas about “endogenous” growth does at least hint that there may be some human beings involved in economic activity.
The mathematical physicist James Clerk Maxwell said that “one of the severest tests of a scientific mind is to discern the limits of the legitimate applications of the scientific method.” Quite. And human behaviour is largely outside those limits. As a discipline, economics is a road to nowhere. Worse, it is a dismal part of the hyper materialism and scientism that dominates the modern mind.
Chesterton, as ever, beautifully described the delusion that “men of science” fall into:
“Men of science are beginning to be aesthetic, like the rest of the world, beginning to talk of the creeds they imagine themselves to have destroyed, they are beginning to be soft about their own hardness. That is, they are becoming conscious of their own strength – that is, they are growing weaker.”
Such posturing is replicated by many in economics. It looks even more ridiculous when it is considered that the underlying discipline is not a science at all.