“Talking like a…
“Talking like a macroeconomics professor always leads to trouble.” – David Plouffe
I don’t mean to beat the horse killed by Paul Krugman but there is nothing more impolite than beginning a conversation using the vocabulary of an economist. Economics is called the dismal science for a reason. At its foundation is the assumption that mankind is inherently selfish and willing to do anything for individual interest given the right incentive structure. As the field has progressed, this assumption has become more nuanced: mankind is inherently selfish but is prone to the irrational desicion-making of a beast rather than the cool calculation of a utility maximizer. The endless list of econ 101 jargon used to describe commonplace human errors that fall outside of the rational actor model compels us to believe we were better off as hunter-gatherers where the consequences of our insatiable yet stupid greed could be properly contained. Yet for all of the jeers economics receives due to its microfoundational assumptions, it manages to be the titan of the social sciences because of its macroeconomic insights. Economics strength lies in its assertion that man’s vice may be systematized into virtue. This is the very essence of capitalism: a counter-intuitive notion. This is why the prescriptions of macroeconomic theory are so easily maligned: the objective of maximizing the collective good is apparently at odds with the market system. Thus macroeconomists are doomed to be ignored to the peril of society. Perhaps if economists were more normative and less positive, their policy prescriptions would be taken more seriously. The reality is that economists like markets because they’re efficient and maximize collective utility, not because of the inherent superiority of capitalism rooted in the morality of productive property ownership. Once economists actively discard the false notion that markets are the optimal mechanism for societal decision-making, their logic will be more easily diffused throughout society. Economists will then cease to be perceived as the useful idiots of the financial sector and gain respect as something greater than mere social scientists. With the right dose of openly normative viewpoints that advocate in favor of a just society defined by tolerance, equity and democratic deliberation, economists have the potential to be viewed as the benevolent architects of civilization rather than the theorem-wielding shills of hedge fund managers. Isn’t wish fulfillment a therapeutic exercise?