Sunday, 29 January 2012

Economic outlook lookout

Henry Hazlitt - from Wikipedia
I don’t do economics in this blog, partly because I’m not an economist and partly because I’m not really sure if anyone else is either. This is what Henry Hazlitt says in his classic Economics in One Lesson, first published in 1946 and still in print. I don't entirely agree with him about medicine.

ECONOMICS is haunted by more fallacies than any other study known to man. This is no accident. The inherent difficulties of the subject would be great enough in any case, but they are multiplied a thousandfold by a factor that is insignificant in, say, physics, mathematics or medicine—the special pleading of selfish interests. 

While every group has certain economic interests identical with those of all groups, every group has also, as we shall see, interests antagonistic to those of all other groups. While certain public policies would in the long run benefit everybody, other policies would benefit one group only at the expense of all other groups. The group that would benefit by such policies, having such a direct interest in them, will argue for them plausibly and persistently. It will hire the best buyable minds to devote their whole time to presenting its case. And it will finally either convince the general public that its case is sound, or so befuddle it that clear thinking on the subject becomes next to impossible.

Of course there are other areas which this criticism fits equally well, climate science being just one. To my mind, this well-known, long-term problem with economics doesn't feel resolvable. Who would resolve it and how? Whom are we to believe when listening to all the money-talk?

Maybe blogs are a start, because as far as I can see, many bloggers on economic matters seem to want much more clarity and honesty in economic debates. Official sources of economic lore are presumably no so good in Hazlitt's terms because they are paid-for sources. But that applies to many other subjects too. Most of them in fact.


rogerh said...

Re D Deronda - bought a copy - not exactly like R Ludlum, but will persever.

Proverbs XVII - Happy is he who expects little, for he is seldom disappointed.

Many good economic blogs - but most would agree with Mr Hazlitt, wherein lies the answer to WIND. Interestingly, Tim Harford tells us that the Chinese are starting to get out of manufacturing - cheaper elsewhere - which rather begs the question - what are the Brits going to do? Work for half a bowl of rice per day?.

A K Haart said...

rogerh - I hope you get into Deronda. The only Eliot novel I'm not keen on is Romola.

I've been wondering what the Brits will do. Walking round town I see far too many who wouldn't inspire any employer with confidence.