Economics is a disgraceful profession
My rant today is on economics, a phony science if there ever was one; a compilation of accounting, abstract statistics, and absurd assumptions that’s nothing but a labyrinth of mirrors having no relevance to reality.
Edmund Phelps, winner of the 2006 Sveriges Riksbank Prize in Economic Sciences (dishonestly called the Nobel), gives us a typical demonstration of fraudulent quackery in today’s FT. The article’s not worth spending time on, it’s the standard nonsense tying the current crisis to insufficient productivity growth, excessive wage demands, fiscal deficits, and household wealth levels. Phelps even calculates the net present value of future US “entitlements” as if it somehow had meaning.
If we exit the pre-scientific fog of economics and enter the real world, though, we encounter an entirely different reality. Productivity remains important but it becomes a “horse of a different color” as they say. What is the productivity rate of a normal basket of goods that’s likely to be consumed by an average person? How many people, in other words, does it take to produce a healthy consumption of food, housing, clothing, healthcare, furniture, travel, entertainment, etc.? I don’t have the stats handy but I’m sure they could reasonably be constructed. Is there any doubt it would be substantially less than the total of the working age population? Think not only of the vast number of unemployed and underemployed, but also the very many in professions that don’t produce anything of real worth to most people. The lawyers, the financial industry, the huge army of salespeople, government bureaucrats, economists, the military complex, the health insurance industry, most of advertising, the yacht and corporate jet industry, and the list goes on and on. All major societies in the world today are incredibly rich in the only true sense of the word: they can produce far and above what’s needed for everyone to live well.
Economists, though, focus like a laser on accounting numbers and then descend from the temple and tell us whether or not our current life style is “sustainable”, whatever that can mean. If economics were a real science, its prime agenda would be trying to discover how it could possibly be the case that anyone in rich societies could live poorly. But, it’s exactly the opposite – all we hear are proclamations on why rich societies are actually quite poor.
Is there a more disgraceful profession than economics?