To be frank, I could go on all day about where I fault with this subject, why I feel that people in the industry are unable to use this study even to the slightest efficacy, and why ultimately that it may seem futile. On such a basis, to provoke myself into new depths of knowledge, I will try to ensure this is the last of what may seem as a journey into assessing the shortfalls of economics. On such a basis, in this blog, I intend to discuss the ‘grand unravelling’ of the story that economics presents. This idea will hopefully present itself clearer as the writing follows.
As a starting point, and indeed what inspired me to discuss this topic, I’d refer to the diagrammatic representations of economics first. Through studying the subject, I am continually exposed to graphs that supposedly illustrate and make sense of the economic decisions that are made by those actors in a transaction. Yet despite the reasoning behind why certain intersections between curves on a graph explain the purpose of e.g. the conditions of a specific market structure, there is a sense that such illustrations are vague and abstract. This lack of a lucid portrayal stems from the general misconception that all ‘businesses’ seek the same objectives and thus reveal similar working patterns. Therefore, even the very initial sketches of how, for example, marginal and average costs relate to each other are flawed in understanding, thus inhibiting the potential for us to understand the 15 or so graphs that are predicated on that understanding. What’s more, on raising a query surrounding why the curves of a monopolistic competition graph are to be meeting at a tangent, the explanation received was, ‘otherwise the theory could not be illustrated correctly’. In other words, diagrams are manipulated in the hopes of confirming non-existent theories thought the act of shifting curves and finding new and discreet points of intersection to assign a definition to. From the most basic demand & supply equilibrium diagram learnt, there have been numerous inconsequential representations of economic theory that provide only the most basic, mediocre and thus essentially invalid expressions of phenomena that greatly fail to assess the dynamism of society.
Like any extended narrative, a background context serves as an important factor that may determine consequential events. Interestingly, the same applies for economics. As I have mentioned in previous posts, what I consider to be the most prevalent source of economic failure is the narrative fallacy – the idea that humans tend make order-intwined brain maps of past events to attempt to narrate how future events would appear to be. To take a relevant example for this point, the 2008 crash, we see in today’s news that forecasts are playing off a potential recession in 2020 as it doesn’t follow the same patterns as what was witnessed in 2008, ie the inversion of treasury bond-yield rates did not occur under the same conditions. How does this relate to a so-called ‘story with no meaning’. The justification for this comparison lies in saying that past events do not, and thus should not, play any role in determining how decisions now are made (past stories are insignificant today). Of course, the easy rebuttal to this would be to rephrase what I am currently advocating, ie. experience plays no significant role in today’s operations – an economist would throw a rock at me. In response, I would ask for one singular example where knowing the sequence of a past event has aided a correct anticipation of the future (after all I write these blogs so that someone can tell me I’m wrong and explain why). It seems to me that human perspectives within a society are so potent that the repercussion of an event, whether positive or negative, with never be verifiable and therefore past failures shouldn’t play any role larger than implying the potential effects of a crash. Yet, again, an ingrained humane behaviour tends to transcend this potency and will only craft past events to shape their outlooks – or simply disband any reference to them.
So we may ask, if a story such as economics has no meaning or illustration of principles, there where does the subject lead to. One may argue that an economist can fathom an infinite number of graphs following basic principles that showcase each area of economic theory, but what is the point of this if it is all predicated on unqualified nonsense stemming from the core idea of supply and demand. I’ve only began to learn economics and I am unable to see from where, at this stage in the development of the study, a true analysis of the interactions of a society can be exhibited. My idea is to change the story entirely, so much so that it is lo longer a story and finally an academic study. What does this entail? Firstly, scrap all useless diagrams that would never be employed by firms themselves. Secondly and most key, alter our way of learning economics. In the current day, we are narrated past economic phenomena as well as a list of plausible causes and verifiable impacts(order is forced into explanation and randomness extracted). Instead, let economics teach how we approach decision-making, how to assess factors, and how to assess past events.
Evidently, all that has been displayed on this page is abstract and perhaps somewhat extreme. I feel that having a bold stance on my opinions is a good trait, it distances me from the ‘on the one hand…on the other’ type of analyst. It continues to surprise me, and I’m sure will do so for a very long time, how people interpret information before them. The factor of evaluating the depth of information is thrown out of the window when the information is required to back up ons’s line of thinking. Albeit my solution to the problem may seem extreme, it only expresses my characterisation of economics as vague. Hence, I see that a ‘story with no meaning’ is a far better justified term, than before, to be used for evaluating economics.
Economics Relate 