The trouble with economics
I've often wondered why economics was labelled a "dismal science", and now I know. In most sciences, there's an element of mastery such that the more you know your subject, the better you get at it. But with economics, the reverse seems to be the case. Thus, while even though all of us lowest-common-denominator joe-schmoes have known that the economy has been heading for recession for some time, it's taken until this week for the news to reach both the governor of the Bank of England and the prime minister. When Brown's faithful replacement as chancellor called time on growth way back in August, he was roundly criticised from every quarter.
The problem, of course, is that because the science of economics is not only dismal but soft, the credibility of those whose power is rooted in economic analysis rests not on solid findings but on something like a credit scoring system. To the extent that they guess right, or gamble successfully, they build up credibility, or creditworthiness, and because no-one can hold anyone to account on the basis of the facts of the matter – because, by and large, there aren't any – then their credit rating is, again by and large, pretty much all they have. But in the case of figures like Brown and Mervyn King, there's so much credit invested in them by virtue of their position that they're left with few options but to oversell everything that they do announce, or – in cases such as the present one, where the bottom has fallen out of whole system – simply come clean after the fact in a kind of credibility correction...
The problem, of course, is that because the science of economics is not only dismal but soft, the credibility of those whose power is rooted in economic analysis rests not on solid findings but on something like a credit scoring system. To the extent that they guess right, or gamble successfully, they build up credibility, or creditworthiness, and because no-one can hold anyone to account on the basis of the facts of the matter – because, by and large, there aren't any – then their credit rating is, again by and large, pretty much all they have. But in the case of figures like Brown and Mervyn King, there's so much credit invested in them by virtue of their position that they're left with few options but to oversell everything that they do announce, or – in cases such as the present one, where the bottom has fallen out of whole system – simply come clean after the fact in a kind of credibility correction...
