A Quantifiable Economy, Part I

About the Author: Mr. Conrad is a retired college Economics Instructor who is hoping to remove a lot of the confusion, misunderstandings, and myths that surround contemporary economic thinking.

There are many people who seem confused by the differences between SCIENCE and ART.  Is describing our ECONOMY a science or an art?

 

Math is a science; music is an art.  And, surprisingly, they can’t really do the same things.  When you try to write up a formula for a hit song, somehow it just doesn’t work.  There’s something more to it than just so many beats per measure, and so many chord changes here and there.  It’s even surprising that many of the people who are good at one discipline aren’t very good at the other.

 

How about pitching a baseball?  Do you think that’s a science that can be taught, or do you think it’s an art that starts with a certain natural ability that can only be improved upon through practice, training, and repetition?

 

Many think that our ECONOMY is all mathematics.  The GDP is this, inflation is that, unemployment is this, interest rates are that, the national debt is this, our trade deficit is that.  But, are these people even anywhere close to describing the economy?

 

What, really, is the economy?  Is it a “thing” with shape and size and definable characteristics?  Is it something we can see and touch?  Is it a SHIP OF STATE, as many politicians like to suggest, that needs a strong hand at the tiller and someone on the lookout for trouble up ahead?  Is it a PUMP that needs to be primed from time to time, or a motorcycle that needs to be kick-started?  Or is it more like a song – something we can sing along with and we know if we like it or not, but it’s hard to say why.  Oh, I like it because it has a good beat.  I like it because you can dance to it.

 

When you get right down to trying to describe anything that’s ART, it’s as elusive and enigmatic as winning that lottery that only requires you to pick five numbers out of those that will be drawn from possibilities between zero and ninety-nine.

 

Do we do anyone a disservice by plastering numbers all over a house of cards that we call “the economy” when we know how inept and misleading these measurements are?  Does anyone even know how many people there are in any one city the size of Houston, Dallas, Chicago, Boston, or San Francisco at any one time, let alone in a country the size of the United States?  Does one immensely rounded-off number like 306 million people produce any veracity, or just give us an ILLUSION that we know something that we can never really know with any degree of accuracy or certainty?

 

As many might contend, we don’t really need to be entirely, 100% accurate because these measurements just describe an APPROXIMATION of certain bundles of things so that we can speak more intelligently about them and make judgments about whether they are too large or too small.  So, when we talk about things like how much POVERTY there is in a country, or how much HEALTHCARE costs, or the size of the GDP, the MONEY SUPPLY, or the rate of INFLATION, we are giving shape and substance to things that would otherwise be only smoke and speculation.

 

The point I’m making is that just by having reams of data about something doesn’t mean that the data is accurate, true, or even meaningful.  But, what it can do is give the ILLUSION that an assessment is being made and give the ILLUSION that truth and accuracy are contained in it when EXACTLY THE OPPOSITE might be true.

 

With all the historic and current data we have on WEATHER CONDITIONS — temperatures, barometric pressure, isobars, humidity, rainfall, wind speed, etc. — we still cannot predict what will happen in any particular region of the country more than a few days in advance.  With all the historic and current data we have on BASEBALL TEAMS — strikeouts, batting averages, errors, wins and losses, etc. — we still cannot reliably predict who will win the World Series in a given year, let alone who will win a particular game.

 

Is “THE ECONOMY” that much more predictable and quantifiable than these events that it can be measured, sized, and fitted like a tuxedo?  Or is our tendency toward anthropomorphism — giving human qualities to non-human things or, as I might elaborate and expand, giving descriptive qualities to things that cannot be described in a tangible, finite, and quantifiable manner — something that takes us away from a more insightful understanding of our world?

 

Philosophy — an art and a verbal skill — is the only way to make sense of the vastness of possibilities and the endless complexity of our world because measurement and specificity only belong where homogeneity, uniformity, consistency, and absolute knowledge of the possible outcomes prevails.  For those who try to make us believe that the ECONOMY is a quantifiable “thing” not an endlessly elusive and amorphous “concept” they are as misguided as they are misinformed.  Those who try to measure love, loyalty, prosperity, poverty, courage, intelligence, conviction, friendship, cooperation, success, leadership, truth, honesty, trust, respect, satisfaction, passion, and many, many other non-quantifiable concepts will fail to adequately measure them and will have to admit to many contradictions and exceptions to their conclusions.

 

In fact, when there are more exceptions to the rule than there are confirmations of it, you don’t really have a rule you have merely added another exception!

 

Surely there will be those who say that SOME information — if only a best estimate or a ballpark figure — is better than NO information.  But, is that really true?  If someone asks you if it’s going to rain outside today, and you reply that your best estimate is that it isn’t, then it rains, is that information valuable to you in some way?  The idea that BAD information or MISLEADING information is better than NO INFORMATION is as helpful as someone telling you the power is off when you start to work on an electrical outlet, but it really isn’t.

 

Anyone who claims to be able to QUANTIFY the “economy” — especially those who attempt to compare our historical performance with that of today —  should be viewed with as much skepticism as we would a witch doctor or someone practicing voodoo.  They are much more likely to do us harm than to help us heal our ailment.

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