Asking For Proof in the Economic Pudding
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Articles > Business and FinanceAsking For Proof in the Economic Pudding
by: Donald R. Carroll III
There are no stupid questions, only stupid people. Ask an economist for proof of one of their pet theories and you'll find quickly that the age old axiom that we all learned in school and work place training seminars is dead wrong. You can ask a stupid question if you're talking to an economist and that question can, in fact, make you stupid.
It's a well accepted fact that scientists are not the greatest communicators around. They generally are not strong in the customer service or public relations fields. Scientists spend their time preaching to the well educated, well informed, scientific choir. When the time comes that a scientific discovery leads to a consumer product, it is not scientists that explain the benefits and dangers of the new product, a marketing company will handle that. Because of the disconnect between the science behind a product and the actual implementation of that science, there are a slew of products which are around 1.25% scientific fact and 98.75% marketing hype (take a look at your average diet pill). Consumers don't know the difference because scientists won't talk to us.
Economists also fancy themselves as scientists. They like to say that they have laws and they also don't feel the need to deign to speak to the general public about their work. They talk to each other, develop their theories, push for the implementation of those theories and generally think that Liberal Arts majors and auto mechanics should mind their own business. Maybe it's time that we lowly non-economists demand a few answers.
It's tremendously irksome to hear an economist speak about an economic law. Ask the economist to demonstrate the law and he will fall quickly to an explanation of the theories which, in his opinion, make the law true. Supply and Demand can only be verified by reading those theorists who endorse the idea. The theory cannot be measured, cannot be duplicated under scientific standards, cannot be certain to have the same outcome at all times, even given the same circumstances. It is therefore not a law. It's just a widely accepted theory.
I've got no problem with widely accepted theories. What I do find disturbing and even dangerous is the application of widely accepted theories into public policy without regard to whom is being hurt and without question as to whether or not the theory is working. Take free trade for instance. It's an economic policy which is not demanded by the average working person, but which both major political parties endorse to some extent and which the Libertarian Party makes a cornerstone of it's platform. The theories all indicate that some job loss, even great displacement of a given society's workers, is to be expected. In fact, the displacement is a good thing, since it allows once unskilled laborers to study and become highly skilled technitions, or accountants or something. Unfortunately, the American people aren't privy to this part of the working economic theory and thusly aren't excited to hear that the reason that their job was offshore is due to India's comparative advantage in call center operations. The displaced worker may not feel that they are a worthy subject for the grand experiment of free trade.
Of course, no theory says that America has to be the winner in the free trade free-for-all rush to the top of the comparative/absolute advantage heap. No, economists don't often talk about nations at all. Their theories do not aim to find ways of make America the most economically powerful nation, or the richest, or the most comfortable; their theories work to ensure a true free market. The problem with a truly free market is that the displaced workers can just as easily be upper middle class Americans and the new skills that they may be acquiring just may be menial labor. Ask an economist why the displaced workers are always poor and always must be and I'll bet you money that they cannot give even a small piece of evidence to show a reason why that is so.
Yet our politicians, being taught economics in universities which are almost universally in support of free trade, themselves support free trade. They support an economic theory that has no evidence of actually being affective, but which may cause damage to the American economy, a fact which any honest free trade supporting economist would have to admit doesn't matter to them. Yet, the average person is not supposed to question these theories and certainly not the logic of the theorocrats that endorse them. If you fail to remain quietly on the sidelines of history and make the mistake of questioning the theory behind free trade, then you will be the recipient of a litany of the names of long dead authors who will all prove you wrong. You'll be called an idiot (trust me, I've had these discussions), they will threaten your mother's virtue before they admit that they can provide no evidence that they are correct.
Does a lack of evidence prove that the economists are wrong? Not at all. In fact, my desire for evidence is proof that I don't know enough about economics to ask more informed questions than, "can you prove that?" I do think, though, that is a damn fine place to start. Maybe more economists should start their path of theoretical enlightenment by questioning the fundamental truth of what they are being taught. Maybe economists should consider being the first scientists to learn customer service. If that seems like a bit of a demotion, just call it retraining for new economic conditions.
About The Author
Donald R. Carroll III is a student, insurance adjuster and freelance writer from Kansas City, Missouri.
dcarroll04@kc.rr.com
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