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The Reality of Economics

In about ten years of work that has led to this space—both in general and Quora “space”—I have encountered more than a few thoroughly outraged economists, from amateur investors to undergrads to eminences gray, who furiously argue the holy verities of Econ 101 with me as if I am an idiot.

I note that only to warn those who are doing piano warm-up exercises, preparing to type in their entire basic econ understanding as a counter to my radical vision here. You’re welcome to—space and electrons are free—but if your takeaway is that I don’t grasp the sacred precepts of Econ and you need to explain them to me, especially from some literal, long-ago Econ 101 whiteboard-model understanding… I suggest you lurk and read a while first.

And consider this bit of wisdom as it may be relevant to your own:

“Economics is best regarded as the intersection of accounting and behaviorism. That the accounting can be carried out with fantastic precision almost universally imbues economic thinking with the delusion that the behavioral component is equally precise and predictable.”

J.K. Greyfriars

That is: much of economics is nothing like absolutes or natural law, but indistinct observations that fall within generalized models… models upheld as absolute until they break, in which case the next absolute model is created.

You’re ready to comment meaningfully when you understand that ACE is just as valid a model as that of Greenspan, Keynes and Smith… it’s just constructed using different assumptions. And besides the accounting, assumptions are all economics has.

Selah.

—published on Quora, 13 Dec 2021

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