Will the Real Economist please shut up?
By James West
Friday, January 23, 2009
There once was a pitched battle of words raging at slate.com that is as effusive a case of kettle-calling-the-pot-black as I've ever seen. Rock star economist Paul Krugman and comparatively anonymous Professor James K. Galbraith were arguing over who is the "real" economist. This was back in 1998.
I don't have anything against academically trained economists. I really don't. The pure causal supply-and- demand-theory economists from the intellectual literary side and their natural enemies, the economists of the quantitative mathematical analytical school are both equally viable in their competition to complicate the simplest of so-called sciences. Much like statistics, you can select the outcome you want and then generate the logic to achieve it.
Such is the case with our current situation. Thanks to economists, we have Asset Backed Commercial Paper, Credit Default Swaps, (it's economists who rated theses Triple "A"), not to mention Off Balance Sheet Transactions, deficit spending, and fiat currency.
It is economists who perpetuate the myth of globalization, which is merely the age old pursuit of free trade with a modernized handle.
It is economists who dominate media interpretation of what has happened, what is happening, and what will happen. The general public notes that their track record is virtually perfect in its failure on all fronts. The government, however, selects the theoretical style it requires to justify its special interest-oriented economic policy, and, regurgitated ad infinitum in speeches and "position statements", force-feeds it to the citizenry of this apparently newly globalized globe. Then, they hire these same economists to oversee the national bank account and lending window.
Now I lack the Ph. D., or any of the other post-secondary credentials that might make me a "respected economic theorist", but my two eyes and both ears are fully functional. Those are the only attributes necessary for the practice of economics, as opposed to the theory of economics.
Presently, my own personal economy is in recession, and all of us in this isolated little country warren - the dog, the cat, and myself - are suffering the effects of a significant drop in our collective GDP. Especially since, what we have here, is a welfare state, where only one third of the population is employed, and the other two laze around all day torturing mice and birds (the cat) or deer and squirrels (the dog).
Since the principle product of our economy is dead wildlife and words, only one of those products is currently finding much in the way of demand, and that substantially reduced relative to a year ago.
I attribute the sharp drop in demand to the sudden contraction of credit and capital in the external globalized economy, combined with an excess of supply. Especially from the academic economist crowd, who seem to have emerged from the financial catastrophe in a festive deluge of postulating and theorizing.
In my admittedly limited exposure to academic theory (I've limited my research to Friedman, Keynes, Mises, Hobbes, Smith, Mill, Ricardo, and Winnie the Pooh), the most memorable theory to explain the past hundred years or so comes from a poster my Uncle used to have on his wall in his bathroom over the scale.
It was a picture of a pile of hippopotami piled onto a little boat, and one after another, additional chubby cartoon hippopotami were gleefully somersaulting and cart-wheeling off the dock and onto the increasingly overloaded boat. The caption on the poster said "More is not always better".
It took me the better part of 10 years to read all the books and all the theories of these great economic thinkers, and it took a flash of a second to read that poster at my Uncle's house. I have reached the conclusion that the author of that poster is probably the greatest economic thinker I've encountered in my admittedly intellectually miniscule world.
So we've decided to institute that complex theoretical economic stratagem into our local economy. We're travelling more without the expense of fossil fuels, and easing the high fat and sugar diet into a vegetable and grains and fish-dominant one (much cheaper). This has resulted in an immediate dividend of reduced expenses and improved overall physical infrastructure health, and surplus energy.
Calculations recently undertaken have revealed that it is actually cheaper to rent than to own a house, both in terms of psychological impact and baseline GDP requirement to service the associated debt of ownership, a situation which has gone from a significant amount stretching into decades, to a non-existent state, but for some relatively minor outstanding personal amount. According to these highly scientific quantitative analyses, you don't actually own your house anyways. As long as it is encumbered with debt, the bank owns it.
Arguing about who is a real economist is akin to vying for official recognition as World's Biggest Public Asshole. Who cares? Who needed economists in the first place?
The archaic definition of an "economist" is one who lives "economically". Economy of motion, economy of lifestyle.and economy of words. Nuff said.
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