Economics: The Dismal Science

I was listening to an NPR program the other day and they were interviewing a man who had just written a book on what he called “the upside to irrationality.” Odd, I thought. Well, maybe not, if you’re an economist. I have always had a rather dim view of economists, and the field of economics. I think of economics as a kind of dumb science, by which I mean, not really a science at all. Economics seems to be an adjunct to mathematics, or maybe statistics, in which some math is applied to last year’s economic performance in an attempt to explain it. Kind of like a weatherman trying to explain last year’s weather.


But I digress.

This fellow, an economist from a prominent university, was explaining his view that the term “rational” means a strictly cost-benefit calculation related to achieving something one wants. In his view, including other factors, like potentially unpleasant side-effects that might affect other people, would be “irrational.” This rather odd definition of the term “rational” derives from, apparently, the field of micro-economics, in which they adopt strict cost-benefit modeling approaches that ignore what they refer to as “externalities.” So, if I want to produce power, I would calculate the varying ways of producing that power and arrive at the least expensive way, regardless of the effects that method might have of, say polluting the environment. To include such “irrationalities” would be, in his view “irrational” (see BP Oil).

Now, to be fair, the man wasn’t really arguing that we should all operate in this strictly “rational” manner, ignoring the effects on our fellow man of our actions. But, the longer he spoke, the more I realized that he was in fact describing much of American business, especially big business (or “bidness”, depending on how close to Texas you live).

Now, if we examine the term “rational” as just a word, it seems to mean, “sensible”, or “agreeable to reason”, or even, “sound judgment”, or “good sense.” See, it has nothing to do with the economist’s sense of the word.

Now, what does this have to do with anything? Well, it occurs to me that American business people have been and perhaps still are being trained in schools of business, or economics, to explicitly ignore the ethical dimension of business decision-making. It seems almost as though “business ethics” is another of those infamous oxymorons, like military intelligence. Maybe, if economists would refrain from corrupting the English language with perverse definitions that lead directly to ethically corrupt decisions and decision theories, the world might be a better, safer place in which the rest of us might live. It might also prevent idiocies like the Great Depression of the 1930s, and the Great Depression II of the 2010’s.

Just a thought.

And on yet another planet, the Tea Partiers, after yelling that our President ought be impeached, are arguing that they have figured out the way to achieve Great Depression III—just elect them and they will assure its happening.