Regular readers, lovely and intelligent folk that you are, might remember that a few episodes ago, I went off in search – unsuccessfully, as it turned out – of the economy.
Prominent on the list of people I didn’t ask for help were economists. And this, dear reader, was no accidental oversight.
You see, economists are perfectly excellent at telling us where we’ve been, but perfectly hopeless at identifying where we’re going.
A not insignificant shortcoming I’m sure you will agree, given that economists are asked to make predictions on average 6.35721 times a day.
Someone once called Economics the dismal science. Well, they were half right. It is most definitely dismal.
However, a science it is not.
There isn’t a physicist in the world who would disagree with the laws of gravity.
Ask any mathematician, anywhere, at any time, what two plus two equals and you may be sure that the answer will always be four.
That boys and girls, is science.
However, ask an economist what two plus two is and you will be told something like, “It all depends. If the GDP of Kazakhstan is no less than the volume of Sydney Harbour in fiscal year 13/14; or, conversely, if Kate Perry’s next album sells less than six quadrillion copies, then, indeed, two plus two may equal four.”
Please note the use of the word, ‘may’. Economists do not deal in absolutes.
I once, in a fit of exuberance, subscribed to two investment newsletters, each produced by an economist.
It was a salutary experience. The two letters rarely agreed with each other on the meaning of events, vis a vis the future, and neither prognostication ever seemed to agree with the ensuing reality.
So, how did economics get into such an unsightly pickle, you ask.
There are two reasons.
The first is that for most of its life, economics has based its theories on the quaint notion of the “Rational Market”; that people make rational decisions when they buy and sell stuff.
Look, there isn’t a rational reason in the cosmoverse for buying a Ferrari, but if I could… Well, you know the answer to that one as well as I do.
Ask any member of the female persuasion if she’d buy a cheap, really ugly sweater even if she was guaranteed that it would keep her perfectly warm for the rest of her life.
You get the picture.
The second reason for economics’ dismal failure is that at some point in its evolution it came up against an insoluble problem. How to handle stuff that can’t be measured.
Turned out, the answer was simple. Just ignore it; pretend it doesn’t exist.
Here’s an example of what I mean.
This morning, I listened to Jessica Irvine, an economics journalist about to take a senior role with News Corp, and with an honours degree in the subject, (what a waste of several years in a good educational institution), wax lyrical about a mathematical model developed by an economist, that predicts the optimum moment in life, correct to three decimal places – I kid you not – at which one should stop searching for a life partner and choose the best available fit.
Throughout her entire explanation she didn’t mention the word, ‘love’ even once. Why? Because it can’t be measured, so best to pretend it doesn’t exist.
I could go on, but you get my drift.
So if you want some idea of what your future might hold, go find a palm reader.
Just don’t bother an economist.
They seem like nice people, but what are they good for?