The Longest Now

Macroeconomics is less than a century old.  It has suffered from a lack of predictive power and difficulty reconciling its ideas with the more testable and tangible ones of its micro cousin.  Its claims and schools have guided many global scale political, military, and financial changes.  Like man, I imagined since college that it was simply passing through field adolescence; only recently have I seen it as suffering from repeated field failure.

What does it mean for an entire field to fail?  You can believe that the universal elements are fire, air, water and earth, and generate useful elaborate rules of thumb with some predictive power.  You can found a field on the notion of spontaneous generation, including crocodiles being generated from rotting logs, and both cultivate increasingly-refined correlations and produce testable lemmas and hypotheses starting with these ideas.  Some of these hypotheses can be proven — a hypothesis inspired by false assumptions can well be true — further developing the field.  But when extremes or boundary events cannot be explained by a field’s axioms; when the founding principles of a field cannot withstand scrutiny; or when there is no macroscopic description of the world consistent with its concepts : then it slowly becomes clear the field has failed.

No field is ever acknowledged as failed within a generation; even when a breakthrough or mistake is so tremendous as to shake it to its foundations.  But individuals do recognize it, and repeated observable failures lead to rapid change and growth of understanding.  Macroeconomics has experienced many minor setbacks and confusions in the past, sometimes written off as a result of the field’s youth.    The differences between different forms of capitalism, orcapitalism v. socialism, or what have you are coming to seem like approaches that are appropriate for different circumstances, not foundational differences between two religions, one of which is Always Right and the other which is Forever Wrong.  

What have been viewed to date as philosophical differences in approaches to ‘economics’ and ‘growth’ — and I note the notion of philosophy or dogma as a valid determinant of theory (rather than nuanced experiment) may be a characteristic of a field not yet capable of success — are looking less and less that way.

I put ‘economics’ and ‘growth’ in quotes there because the modern concept of economics is generally stripped of much of the social and moral elements that made up its description one or two centuries ago; and as such feels like a regression to me.  Certainly our modern notion of growth is hollow, short-sighted and immature compared to concepts of growth in other places and times; but has been paired with powerful forces of social, communicative, and innovative development so that few would even think to separate one from the other.

Each day I encounter one or two serious conversations which are crippled by mundane conceptual failures in economics as a broad field. Conversations about how to direct effort, assign importance, focus vision or evoke change; about how to govern organizations and distribute tasks for great Projects.  These conversations are hampered by a scarcity of variation in ideas about give and take, about bounty and exchange; about resources, production, opportunity, supply, moderation, sharing, desire, demand, need, contingency.   They are hampered by the aggressive spread of a few simplistic rules of thumb, and the confident assurance that those are both true laws and the only ones.