Getting to Know the Dismal Science

When I don’t understand something, I try to learn as much as I can about it. This doesn’t always make it easier for me–sometimes I metaphorically throw up my hands, give up and listen to pleasant music, as I did when I tried to make sense of the Nazi racial cleansing against Jews, ethnic minorities, Communists and people they considered physically or mentally “defective.” About the best I could see into that mess was that ordinary German people (some of whom I am distantly related) believed that they were so different from their victims, or, conversely, that they so much wanted to be part of awakening of the Third Reich, that they could not see the suffering and outright horror they were causing.

This idea of “the other” has had a peculiar and ironic place in our contemporary society, with too many people saying that things would be so much better if we only got rid of _________________,   stopped ________________ from coming into the neighborhood. or forced ____________ to do what we want.

When Congress shut down the Federal government for three weeks a few years ago, I saw many families–already strapped because of previous budget cuts,  struggling to pay bills. Kids came to school hungry. I heard of people losing their cars and their homes. The parents of kids in college couldn’t pay their tuition. Some people got seriously sick because they couldn’t afford insurance co-pays. to pay for medical care.

The proponents of this spiteful tactic wanted to “send a message” to the Federal government. They thought this would teach those in what they characterized as an imperious, impractical and intransigent bureaucracy a “lesson.”

All it did was hurt a lot of people, especially in Northern Virginia, where everybody knows somebody who works for the government, or works for somebody who works for the government.

One of the big unsolved debates in philosophy is how we act. Are our emotions the relics of a prehistorical struggle that is now ruled by rational thinking? Or do we remain people of passion who use rationality to explain why we boiled over and did that thing we regret but would rather not apologize for?

A few centuries ago, “enlightened” thinkers believed that science would save us from ourselves. It would vanquish superstition and replace untenable traditions with practical, pragmatic strategies and, most significantly, eliminate the suffering and horror inspired by religion.

While I have a great deal of respect for the Enlightenment characters (Voltaire and Benjamin Franklin are favorites favorite), I do believe that this ideal continues to cause suffering, especially in the dismal science, also known as economics.

The 18th century enlightenment whiz credited with founding modern economics is Adam Smith. Seeking to identify the moral heart in British capitalism, he suggested that people (or businesses) acting selfishly in a market will ultimately derive uniform benefit from what happens in that market. In a way that approaches religion, Smith described an “invisible hand” that will act to organize the market, drive out the cheaters and hawkers of shoddy goods, identify and further those who offer the best goods, foster competition that will lower or stabilize prices, defeat those who come with prejudices or preconceived notions, and ultimately make society based on trade, stronger, more honest and open.

It should be pointed out that Smith was not against regulating markets, and that he was aware of the tendency of self-interest to dominate and manipulate. At the time, most economic markets were small. People knew each other personally, or were close enough to suppliers and financiers to influence them directly.

Like many ideals, this simplification feels good emotionally. Though Smith had his reservations about the goodness in human nature, he thought that the things that brought people to a market (exchange of goods in a fair, open and efficient manner) would float everyone’s boat.

What alarms me is that Smith’s ideal, as well as all the economic “laws” that have come up since then, cannot be proven as true. Yes, you can build mathematical models. You can create charts. You can use game theory to systematize and prioritize possible responses. And, by golly, you’ll come up with facts and figures that will impress the people that pay your salary.

You might even make a killing in the market!

But we can never be sure if  such ideas as “trickle down” economics–lowering taxes on the wealthy–will have a direct and certain beneficial effect on society as a whole.

And its clear to me that market analytics airline transportation, into an irritating, anxiety ridden mess. The seat sizes, the hidden fees, the baggage penalties, the way the airlines won’t issue refunds or provide adequate compensation when they screw up,  have inspired my wife and I, who love to travel, to do whatever we can not to fly.

I want to understand why, and how, we’ve let economic presumptions destroy the moral and material quality of our lives.

Wish me luck.

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