One of a series of short reports for Orson, an emissary from the planet Orkan – here to find out if we’re safe to be around
To help you to gauge our level of maturity as a species, I’ve compiled a selection of background information on some of the groups that set the tone and direction of our public affairs.
The first group that you should be aware of call themselves ‘economists’. I won’t explain what a healthy ‘economy’ is because it's become perfectly clear from our conversations that you've long understood how to combine freedom, prosperity and peaceful co-existence.
You could be forgiven, therefore, for thinking that our economists seek to understand how economies work, with a view to responding appropriately to the forces within them…rather like meteorologists do with the weather: “It’s going to rain tomorrow everybody – best wear a hat”. I'm afraid nothing could be further from the truth. Our economists don’t try to understand the weather – they try to make the weather. Let me explain:
Despite our long held conviction that science should transcend politics and ‘ego’ - our scientists, being first and foremost human, have traditionally competed with each other for kudos and ‘bragging rights’. Branches of science come in and out of prominence, but the top of the scientific ‘food chain’ has always been the domain of mathematicians and physicists.
Some of our earlier economists decided that they would never be able to impress these two groups unless they had a fundamental mathematical model to demonstrate their credentials. One bright spark came up with the idea that the economy is an equilibrium system. This was considered to be a very elegant solution…but unfortunately the maths didn’t add up. You might think that that would be a clue…but you’d be underestimating the beguiling nature of the human ego…not to mention their desire to ‘stick it’ to the physicists.
Besides, by then it was too late…prizes had already been handed out; nobody had any intention of giving them back; and prestigious job offers had started to roll in from government officials. The latter are always keen on anything that makes them seem indispensable to millions of people who would otherwise just prefer to ignore them.
But clearly the maths was going to be a problem. Something had to be done, not least to avoid embarrassing questions from first year students. After much deliberation, it was decided to invent stuff in order to explain the recalcitrant mathematics. One such invention was the notion of a ‘forward looking rational agent’. I’m sure that you’ve already observed enough humans to know that we are a reactive and emotional species; which of course explains why the economists came up with such an absurd idea in the first place: it temporarily removed a problem and made them feel better. Alas, self-awareness is not their strong suit.
Once the economists had ‘forgotten’ that they’d lied to themselves it became quite normal to ignore the fundamental flaw & carry on tinkering - coming up with new ‘inventions’ every time the model proved itself to be useless, which it did with remarkable generosity.
On the upside, at least for the economists, this produced the need for more grants and prizes, as well as a growing number of opportunities to work for the government directly – an excellent choice for anyone who wants to avoid the accountability that comes with a real job.
On the downside, at least for the rest of us, it spawned a growing number of insatiable governmental organisations such as the Fed and the IMF - organisations that display the same insidious characteristics as the ‘sovereign debt-based monetary system’ that they oversee: they have to expand continuously in order to put off the day when they are forced to confront the truth:
Governments consume an ever-increasing proportion of tax revenues in order to maintain the support of special interest groups. This is done through benefits, entitlements, government contracts, grants, and special projects. Over time these expenditures become impossible to fund through further taxation, and impossible to take away without losing support. Unwilling to face the truth, lacking the courage to confide in a population that has been kept in the dark…governments borrow more…and more…and more. Eventually the cycle peaks with a sovereign debt crisis – a default. Since a nation’s ‘collateral’ is the future production of its children, when the crisis occurs, there is little that can be ‘sold off’. Creditors wind up being screwed - totally screwed. What follows is ‘contagion’ - the slide becomes the avalanche. This has happened time and again: history is littered with extinct currencies and fallen empires.
Which brings me to this: Our most celebrated economists provide the ‘intellectual credibility’ for this process to continue. In effect they are the ‘enablers’ of corrupt and incompetent governments who are taking the global economy over a debt cliff. Ensconced in academia, oblivious to the ‘real’ world, they have reached the pinnacle of their profession by being right, not by being observant.
You may find it revealing to study one or two whilst you are here – they won’t teach you anything about economics but they will demonstrate everything you need to know about hubris.
On a lighter note to finish - there are two in particular who are amongst the finest specimens of hubris you will encounter anywhere on Earth. I speak of Professor Paul Krugman, who teaches at Princeton & preaches at the NYT, and the ‘Daddy’ of them all: Professor Larry Summers of Harvard & the FT. The latter is reputed to have a brain the size of a planet, but alas his acolytes never specify which planet. Alas, this leaves us with a conundrum: is it a planet such as Earth, rich in diversity and full of life…or one like Jupiter, a bloated giant made up almost entirely of toxic gas…or perhaps Saturn, an orb of such exaggerated gravity that it runs rings round itself? My money’s on Saturn but you be the judge…