Thursday 27 December 2018

The ridiculous errors of economics

I was very interested in economics in the middle 2000s - from a libertarian stance (this was before I was a Christian). I incorporated it within a larger theory of natural selection derived from the systems theory of Niklas Luhmann.

After spending hundreds of hours on that subject, I realised that it was misleading nonsense for two - linked - reasons. The first allowed the second. The first was that economists were dishonest - they were not interested in the truth, and certainly not concerned to be truthful.

In this respect, economists are merely typical of all modern academics - but I first noticed with economists. And what made me notice was their collective, mass response to the 'economic crisis' of 2008. Having following several individuals closely over the preceding years, the effortless speed and completeness with which they 'sold-out' shocked me into a reappraisal.

(I had similar Eureka moments with psychiatrists mass adoption of 'atypical antipsychotics' and their use of the agents in children and healthy outpatients; and the scientific Establishment's adoption of the CO2-Anthropogenic global warming scam.)

The ridiculous error of economists is to regard individual people, and groups of people, as essentially interchangeable units. That this was wrong was spelled out by the mass of evidence collected by Gregory Clark in his utterly-brilliant world history of economics "A Farewell to Alms".

I also worked it out for myself with a totally convincing thought experiment. The mainstream economists I read all stated that immigration was good for all countries under all circumstances. They had ingenious mainstream arguments to back them.

But all arguments depended upon regarding all people, and all groups and nations, as essentially the same - or trending to be the same. At most, economists would acknowledged the effect of 'education' - by incorporating a variable based on years, or level, of education - but this also assumed that all humans were equally educable.

This is contradicted by the entirety of coherent research into intelligence and personality (which are both very substantially heritable); but for me a single, reductio ad absurdum, thought experiment was decisive.

The economists I read were emphatic that the skills, education, intelligence, personality of immigrants did not make any difference to the fact that they were an economic benefit. Therefore - to maximise economic performance - there was no economic reason to limit migration, and indeed any barriers to migration should be removed.

Economists might introduce a proviso that certain things would need changing to ensure this - for example that wages should be set by the market, that benefits should not be excessive. But they were solid on this point that immigration was an economic benefit - and indeed, the failure of actual nations to meet their provisos did not deter economists from (in practice) a strongly (passionately) pro-immigration stance. 

My thought experiment imagined there was a large nation of people who had a heritable and severe form of mental handicap; such that they would be wholly economically dependent - and would, indeed, each absorb the labour of several people in looking after them. I then supposed that the entire population of this nation - say 100 million - would migrate to somewhere like the USA or the UK.

Would it be of economic benefit to the UK (population 70 million) of enabling 100 million heritably dependent, resource absorbing, severely mentally-handicapped individuals to immigrate? Obviously Not. Therefore, the assumptions of economics were false. Such was my conclusion.

The reductio is to take to an imagined extreme the actual situation of heritable variation between individuals and cultures, and between groups and nations; and to clarify the actual situation.

This thought experiment reveals that exactly who immigrates matters decisively (as well as the numbers). Once this is understood, it can be seen that the whole categorisation of 'immigration/ immigrants' is a weasel-concept; a fake analytic term that conceals what is decisive behind a false generalisation.

From then onwards, I realised that the profession of economics is merely an exercise in providing pseudo-plausible excuses; a branch of the Establishment public relations industry.

Note: As always on this blog, I am not using the above as 'evidence' to persuade anyone that economics is subverted by its assumptions; I am describing what was in fact decisive in my reaching this conclusion.


a_probst said...

Have you read any of the works of the economists Thomas Sowell or Walter Williams? If so, do you find them dishonest?

Bruce Charlton said...

@ap - I have read a great deal of Thomas Sowell (at least twelve books, including his autobiography) but just a few essays by Walter Williams. I like Sowell, and he is mostly honest; but has the usual blindspot I described - believing that all humans are essentially the same - and that is sufficient to invalidate most of what he says.

Nathaniel said...

Economics seems to be a place for above average intelligent people, but not especially smart, to create careers for themselves and write papers about simplified theories projecting nonsense backwards.

Of course they will say immigration, etc. is great because it's all made up nonsense anyway and they're just doing it for status and to ingratiate themselves with an elite/ruling class.

Tobias said...

Millions of people moving to Europe from Africa and the Middle East with their vast cultural and religious differences, will leave those differences at the border, and will meld seamlessly into European society, and cause no problems at all.

Repeat on your knees one hundred times before you go to bed each night until you believe it.


Bruce Charlton said...

@Tob - Another thought experiment I found convincing. Economists implicitly believe that the nature of one's neighbours make no significant difference to life. Experience tells us the opposite. The economic reality is 'location/ location/ location'. Immigration reduces to 'new neighbours' on a vast scale - therefore economics is wrong.

Or, imagine living in a village of five thousand. Fifty new people (1% - approx. the rate of UK immigration for many years) arrive each year, with the implicit requirement that they must-be levelled-up to the standard of living of of the prior residents.

Does it make any difference who these new arrivals are? As a reductio; they might on the one hand be a cohesive criminal gang who to aim to live by despoiling the prior residents, killing, raping, enslaving and robbing them. Or they might be smart and hardworking people who want to sustain and assist the community they have come among. Let's also add that these characteristics are mostly heritable (either/ both because of genetics and cultural inertia) - and so will persist over many generations.

Economists say that it makes no difference At All to which of these groups (exploiters or assisters) the fifty extra people per year belong. Indeed economics denies (in contradiction of all evidence and experience) that such differences exist - except in a superficial and temporary way. Ergo economics is false.

a_probst said...

@Dr Charleton:
"...has the usual blindspot I described - believing that all humans are essentially the same..."

Yes, I thought you'd say something along those lines. The anti-Marxists and the Marxists have the same affliction (and Marx himself was Exhibit A!).

I don't have a copy of the relevant book by the historian John Lukacs at hand (Historical Consciousness, I think) but he said words to the effect that economic 'laws' have little predictable effect on human actions. He also said elsewhere that what men do to ideas is of more consequence than what ideas do to men.

Come to think of it, historians, at least those who aren't themselves constrained by Procrustean ideologies, can make better gadflies than the philosophers because they will often remind us of the actual circumstances of the origin of a word, an idea, a movement, an institution. Jacques Barzun in From Dawn To Decadence:

"Logic as an antidote to loose inference was helpful to the Middle Ages by the use of international language, not Latin, but Medieval Latin, a medium of exact expression, simplified in syntax and enriched in vocabulary. The modern tongues owe to it the subject-verb-predicate form of sentence and most of the abstract terms used in science, philosophy, government, business, and daily intercourse."

And: "That Galileo, Kepler, Bacon, [Joachim] Jung, Pascal, and Descartes--all men of the [17th Century]--are better known than their elders in science is the kind of wrong that happens repeatedly in all fields of culture. The pioneers, the first who struggle out of the established systems and and who form new and useful conceptions, appear only half right, incomplete; and their names stay remote. But they are perhaps more to be cherished than those who came after, who clear off the debris and offer a neater, more full-blown view."

pyrrhus said...

The bottom line is, and always has been, that the quality of your country reflects the quality of the people living there...So if you import Africa or Central America into your country, that's what you will get....