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Economic ignorance

Many people are ignorant of many things.  This is not surprising and entirely forgivable, given how much knowledge there is to be had, and how much of it is highly specialized.  What is less forgivable is how people feel free to spout off and propose things without the slightest idea of the complexities they are dealing with.  The French revolutionaries blithely imagined they could create a whole new society with its own rules, just by thinking it up.  They ended with a bloodbath in a pigsty.

This tendency seems nowhere more true than in economics.  The average ignoramus hesitates to propose how theoretical nuclear physics should proceed, but feels quite at ease making economic proposals that seem plainly daft to anyone who has the slightest knowledge of the subject.  If anything, economics could well be more complex than theoretical nuclear physics because it deals with objects that are profoundly dissimilar in more respects. Yet some people think they can make a new economic reality simply by wishing it so.

They blithely suggest new taxes on various activities without the slightest inclination of how this will change behaviour, or what incalculable damage might be done.  They suppose that taxes on fatty foods or a minimum price for units of alcohol will suddenly somehow change everyone’s behaviour and solve health problems.  From their protected middle class balconies they have not the slightest idea of how this might impact upon the lives of the poorer people down below.  The people who pushed through biofuel subsidies and had hungry people competing with cars for food crops probably never thought about the effect on food prices.  Some economists did, but politicians and campaigners didn’t realize the depths of their own ignorance of the subject.  They rarely do until it is too late.

I wrote “Economics Made Simple” to redress some of that ignorance, but it’s an uphill task made harder because people are unaware of their need either to learn or to stop making economically illiterate proposals, or preferably both.

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One Response

  1. ‘a bloodbath in a pigsty’ in our namby-pamby, weasel-worded world, how refreshing you are!

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