Myths
Monday, May 25, 2009 at 8:25AM I am currently listening to Mark Scouzen's excellent book The Big Three In Economics from Audible. In it he covers the history and philosophies off Adam Smith, Karl Marx and John Maynard Keynes. It is a great primer on the basics of economic thinking over the last few hundred years and, certainly for me, clarifies a lot of ideas that underlie our modern view of the world.
What becomes apparent is that any prevailing economic view is a currently useful, working hypothesis rather than an absolute truth. However, in common with the other sciences and religion, there are those who would have you believe that what is being presented is the absolute truth. Not only is it the absolute truth but, unlike you, they understand it.
The trouble starts when those absolute truths start to fall apart, as they are in the world of economics at the moment. The perception that experts can be right all the time, be basing their comments on an absolute truth, and be deserving of our complete trust, is beginning to look more difficult to sustain by the day.
And yet we feel the need or ways of making sense of things. We feel the need of myths on which to hang our judgements. Maybe this will always be the case but maybe we should all resolve to admit that they are myths and not take them too seriously?
Reader Comments (6)
Thought-provoking post, Euan.
I am re-reading Arthur Herman's The Scottish Enlightenment: The Scots Invention Of The Modern World. I have lost count of the number of times he says "This is a myth" on topics as diverse as the break-up of the clan system and reasons why the Glasgow tobacco barons were so globally successful.
There are economic truths. Experience tells us that economic boom and bust is a reality, a truth. Gordon Brown's declaration of the end of boom and bust was staggering.
How to separate myth from truth? That for me is a constant quest.
(Currently blogging more at a group blog I kicked off, Ambiance) What you say about economics reminds me of what's happened recently in cosmology -- the discovery of dark matter (first detected in 1930s by Fritz Zwicky, confirmed in 1980s by Vera Rubin) and of dark energy (1998) has thrown conceptions of the cosmos into a cocked hat. Dark Matter: the vast preponderance of the universe, gravity-wise, is otherwise undetectable by us, gives off no light and does not interact with the matter we know. Dark Energy: the expansion of the universe is accelerating, not contracting as it should if the force of the Big Bang was spent and gravity was beginning to predominate. WTF??? Talk about models being inadequate.
Great post. Currently reading 'The ascent of Money'. I am starting to understand how History can give you perspective. With ref to the post above amba's comments about dark matter/energy mirror discussion of the ether before Einstein. The Human race seems to have a need to believe which can distort our perspective. Perhaps the Buddha was right in his experential approach. If you want to know what sea water tastes like start walking and keep walking until you come to the sea.
Hi Euan- Perhaps the great big truths are after all, smaller and more personal. Economists seem to me to be a bit like astrologers. Kind of sort in a territory, but mostly guessing. Anyway, working with applicable economies, region by region, good old E.F. Schumacher, might yet prove to be the most functional and sustainable approach to financial relating. Good stopping by and happy birthday! :) ps- take a look at this - http://tinyurl.com/qwh6pq
Euan, I wonder what you think of Naomi Klein's book 'The Shock Doctrine'?
I haven't managed to read it yet Bonnie - should I?