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?
Comments on Inequality 
>Economists, though, focus like a laser on accounting numbers …
If only! Most are even to ignorant do to that. Instead they parade through the media with their ideological agenda and nonsensical arguments. Reading Phelps in the FT I had a good lough. Edmund Phelps is a loser. Only 66 trillion? We can do better! Lawrence Kotlikoff warns about 211 trillion. These people are so ridiculous their net present value to me is equivalent to listening to some very funny clowns in circus.
“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.”
Very true. Not only is the output of much of this activity of very little benefit and unnecessary under a different social system, but conducting it wastes the time and potential of anyone involved in these activities who would prefer to do something more fulfilling with their lives. The current system is preposterously wasteful, yet most economists think they are studying a system that is by and large an “efficient” allocator of resources.
“yet most economists think they are studying a system that is by and large an “efficient” allocator of resources.”
Well said. Sadly this is true for most economists to the right of Marx. The center left economists criticize income distribution but don’t take the next step and declare that “market” decisions on what is produced are therefore wasteful and inefficient. If income is mal-distributed, then what’s produced is necessarily wasteful. You’ve made that point on your site a few times, as did Marx himself – distribution precedes production. Real key points.
Yes, but there is some understanding, at the heart of the beast. I remember reading about, or reading reports produced by the US military some time ago, on the question of how many people are really needed to keep the economic machine going. How many could be mobilized and taken away from the “private sector” to form a giant army – to fight invading aliens from space I guess. Something like 95%, with only 5% needed, people like farmers, truckdrivers to supermarkets, etc. Far, far fewer than earlier in the century, in WWII say. No Goldman-Sachsers necessary – enlist those parasites as privates.
The NPV of the idiot anti-economists like Phelps is not just zero, as it would be to the economically literate. They would be just museum exhibits & case studies in abnormal psychology textbooks in a sane world. In the madhouse where we all reside, which lunatics like Phelps help administer, it is enormously negative. Maybe -66 trillion or -211 trillion for the profession as a whole. So the average value of each newly moron-ified anti-economist must be in the negative billions or hundreds of millions or thereabouts.
Pretty much, the anti-economics profession supports a ruling class that has been working hard to find the most wasteful, most inflationary, least productive way of running things, in order to impoverish their uppity enemies, the human race.
yes, there is a more disgraceful profession, the “meat puppets” known as politicians.
There’s some merit to putting politicians below economists but I still give it to the economists. They’re actually pretty similar in that they’re both salespeople for those who actually rule. But the foundation of legitimacy comes from the priestly caste of economists as the system does need an underlying scientific sounding creed. Economists legitimate power, politicians just represent it.
Well said Calgacus!
I’d love to see that military report – I’ll do some searches. Let me know if you come across it.
Read such things a long time ago. Perhaps Seymour Melman’s books could help, similar themes.
Reminded me of some personal anecdotal evidence that (modern mainstream) economists are ignorant charlatans. First time I taught differential equations – many years ago, at Phelps’s university – my vanity was stroked because I got a number of economics students auditing the course, because they needed to understand them in order to pass qualifying exams. Did more PDE because of them. They said the tenured econ prof who always taught the necessary course was incomprehensible, and suggested that he didn’t seem to understand what he was talking about.