Science versus Economics? 

by John Palmer

 

Too often well-meaning people who really care about the future of Canada and the planet write, "Science is not the problem; it's the misuse of science by economics that is the problem."

Sadly, they are mistaken. In fact, it is a lack of understanding of economics that is the problem.

Economics doesn't make people greedy, self-seeking, maximizers; economists take this type of behaviour into account only because it seems fairly prevalent. In an ideal world, it might be nice if people weren't this way. But basing decisions for the future on fantasies and hopes that we all can be and will be sharing/caring people leads to really stupid policies.

Economics didn't make a world of scarce resources, either; economists do nothing more than tirelessly point out the problems of scarcity and the implication that we cannot all have everything we want, including social programs and flowers in the park.

But because economists insist that scarcity and greed be taken into account in the analysis of policy issues, others (who think people shouldn't be greedy and that the problem of scarcity would go away if only people weren't so greedy) seem to think economics is the source of the problem. And when their pollyanna schemes don't work, they blame economics instead of their own na´vete.

Recently I asked Ann Gordon, a sidekick of David Suzuki, why she didn't pay more attention to economists in her work. She quite arrogantly responded that she didn't need to know any economics to know what is right. She then added, "And besides, all economists are arrogant."

The problem isn't economists, though; and it isn't economics. It's too many people succumbing to the nirvana fallacy, too many people saying, "If only people would change.... People should change. Let's tell them they should change, and let's pass laws making them change, and then let's implement kinder, gentler policies."

But despite the attempts of the well-intentioned, people don't change. Scarcity doesn't disappear. And the policies have disastrous results.

The disastrous results are all-too-frequently blamed on economics, when instead they should blamed on the implementation of policies that make no economic sense. Economics is not the problem; arrogant economic ignorance is the problem.

The time has come, though, when we can no longer cloak ourselves in moral superiority and proclaim that certain foolish policies should be adopted because of their moral correctness. If our policies do not take into account fundamental economics, they will undoubtedly make us even worse off in the future.

 

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