A “tragic science”

20 Jun A “tragic science”

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He’s an economics professor. He understands the economy and the future of work more than most people out there. Why? Because he’s an economist? I’ve told you before, in my opinion, some of y’all are going to listen to these economists and follow them right off a damn cliff. You’re gonna listen to them like the Pied Piper of Hamelin and go right off a cliff. You can buy an economist to say anything. Yeah, I said it. I’ll put it out there. There are plenty of these so-called journalists and so-called experts and so-called economists out in the media that can get paid to say anything. You wave enough money or you give enough leverage, enough incentive to somebody, and you tell them, “This is the narrative we’re pushing. Are you going to go along to get along or are you going to be a problem, pal?” And watch how quickly they fall in step. This is the world we live in. I’m sorry if that is really offensive to you. Frankly, it should be offensive to you because the system is rigged.

-“Telemigration,” Bad Journalism, and Scare Tactics  https://www.buzzsprout.com/1125110/12752459

Recently on Naked Capitalism, Yves Smith asked the question: “Does Economics Do More Harm than Good?” (https://www.nakedcapitalism.com/2023/06/does-economics-do-more-harm-than-good.html) My reaction:

Image by Messan Edoh from Pixabay

YAAAAAAAASSSSS. I am so incredibly glad that this question is getting asked. I have warned repeatedly that, IMO, some people are gonna listen to these so-called economists and so-called journalists and follow them right off a cliff. The very idea of an economist seems to be devolving into a snake oil salesman who’ll say whatever the paying customer wants.

“[George] DeMartino points out that economists have influence but no power, ironically the same position McKinsey occupies. That allows them to shrug off bad results by arguing their policy was not implemented properly. DeMartino argues that if a policy is not robust enough to survive less-than perfect production, maybe it wasn’t robust enough to recommend in the first place. similarly debunks the idea that if a policy change on paper produces more net gains than loss, the winners can alway pay off the ones who suffer. But not only does that seldom happen, DeMartino points out that some losses are incommensurable, that they can’t be reduced to a monetary calculus (like species loss).” –https://www.nakedcapitalism.com/2023/06/does-economics-do-more-harm-than-good.html  emphasis mine

Exactly. There is no accountability. I put this in the same bucket as influencers who can leave you broke also with zero accountability.

Yves references DeMartino’s recent book, The Tragic Science: How Economists Cause Harm (Even as They Aspire to Do Good), and a Rhodes Center Podcast episode to discuss the book, which you can find here: https://www.youtube.com/watch?v=qr6_pKlNJGw. In the summary, we find:

Does economics do more harm than good? And if it does, how would we know harm when we see it?

In 1849, the historian and philosopher Thomas Carlyle referred to economics as the “dismal science.” The pejorative stuck, and is still slung by critics of the field today.

But what if economics is worse than “dismal”? What it’s…harmful?

George DeMartino’s recent book, “The Tragic Science: How Economists Cause Harm (Even as They Aspire to Do Good)”, makes exactly that claim: that economists aren’t just ineffective at solving social problems; they often end up creating new ones. Worse still – since economics lacks a meaningful criteria for defining what harm is, economists often don’t know how to measure (and fix) the problems they create.

George is an economist himself, and his work isn’t just a pile-on against the field. Rather, his critique points a way towards a more socially engaged version of economics – one that takes the notion of harm seriously.

This feels to me like the idea of moral hazard:

“In economics, the term ‘moral hazard’ refers to a situation where a party lacks the incentive to guard against a financial risk due to being protected from any potential consequences.” –https://www.investopedia.com/terms/m/moralhazard.asp

Bingo. These talking heads can throw out all sorts of “data” and analysis and nothing ever happens if they are wrong. It’s like, “Oh well, oopsy daisy, I made a bad call, ha ha.”

Around 9:00, DeMartino uses the analogy of a doctor misdiagnosing a patient and that patient suffering harm from the misdiagnosis. In economics, however, the impacts are not as direct as a patient standing in the doctor’s office saying, “Hey, bud. You misdiagnosed me and I am getting sicker. We clearly have a problem.” If a bad political/economic policy is enacted, the ramifications aren’t always immediate and direct. It’s also easier to pass the buck by saying, “Well, my policy wasn’t bad. It wasn’t implemented correctly, so therefore, it’s someone else’s fault that it went pear-shaped.” 😒 We hear this type of narrative from lefties who assure us that communism is great, but it merely hasn’t ever been implemented properly any time it’s been tried.

Caveat emptor. Use common sense. Use good judgment. If you’re hearing information that sounds bogus as hell and doesn’t match what you can plainly see with your own eyes, I don’t think it’s smart to say, “That guy has an economics degree, so I guess I’ll blindly trust what he’s got to say on the matter.” I could hire one economist to say the job market is in the toilet and another to tout how robust it is. A lot of journalists do the same thing – they begin with a narrative they want to push (or have been explicitly told to push) and then ask for quotes to match the story.

“Alsop is one of more than 400 American journalists who in the past twenty‑five years have secretly carried out assignments for the Central Intelligence Agency, according to documents on file at CIA headquarters. Some of these journalists’ relationships with the Agency were tacit; some were explicit. There was cooperation, accommodation and overlap. Journalists provided a full range of clandestine services—from simple intelligence gathering to serving as go‑betweens with spies in Communist countries. Reporters shared their notebooks with the CIA.” –https://www.carlbernstein.com/the-cia-and-the-media-rolling-stone-10-20-1977?rq=the%20cia%20and%20the%20media

To be honest with you: I don’t give a rip what some economist or politician says about the job market. I don’t. I trust what I see every day and the deep expertise I have on the subject. Naivete is not your friend. The onus is on you to wise up and pay attention.