CHICAGO SCHOOL OF ECONOMICS. A great center of contemporary
scholasticism. The economists working there and produced by it are as important to the stagnation of useful thought as the Schoolmen of the University of Paris were at the height of the Middle Ages.Like that of the Paris scholastics, their mastery of highly complex rhetorical details obscures a great void at the centre of their argument. They also share a tactical genius for exporting their conceptual definitions to less important centres around the world. The
result is a pleasing symphony of international echoes imitating their calculations and cadences so confirming their correctness, even when
their policies bring economic disaster. The percussion section of Chicago's orchestra is the Nobel committee for economics. Each golden medal is like another congratulatory parchment presented at the end of an elaborate theological debate.
But what of content? There isn't much. What of Friedrich Hayek and Milton Friedman? These minor Thomists preach little more than inevitability and so counsel passivity.
What they call libertarian economics is a remarkable revenge of the scholastics on the men of the Enlightenment, who had theoretically destroyed them. Peel away the tangle of intellectual leaves from the Chicago School and what remains is a great clockmaker god who has set the world ticking. But the conclusion of the Enlightenment was that god's indifference left humans free to organize the world as they
wished. Chicago has so deformed this idea as to invert it. The great clock has been turned into an absolute, all-encompassing system. Better than an ideology, the world is its own absolute economic truth. We must remain passive before its majesty.
This is a denial of Western experience. It is nonsense which simply comforts the power slipping increasingly into the corporatist structures.
Strategic thinking can save a great deal of time wasted over tactics. A large number of America's economic problems, and those of the West [and of the world?], could be solved by shutting down the Chicago School of Economics.
This would not prevent the academics employed there from preaching their essentially anti-social and amoral doctrines. They would be gathered up with delight by the hundreds of imitation Chicago Schools. The purpose of closure would be simply to disentangle a tendentious
ideology from its unassailable position within contemporary power structures. The same sort of liberating shock treatment was applied to European civilization in 1723 when the Society of Jesus (Jesuits) was disbanded. The effect was to set free the ideas of the Enlightenment.
[pp. 60-61]
ECONOMETRICS: A seductive combination of facts and faith, it is not so much a sub-category of economics as a schismatic sect.
Economics sprouted from the same intellectual roots as WEATHER FORECASTING -- rarely accurate but devoid of memory, thus cheerful about being wrong.When economists begin to confuse the well-being of humans with the proving of theories (for example,the market-place is always fight or private enterprise is evil),they may actually have become a destructive force resembling maddened weathermen, who call upon the population to fight their way through a hurricane in order to reach the eye of calm at the centre.
This manic phenomenon can be identified by the rise of untempered OPTIMISM and pessimism and is characterized by the repetition of religious formulae. Thus "the debt must be repaid" or "the recession is over" will be chanted in the way priests once repeated "the devil must be defeated" or "Christ is risen," by which they meant "You also will rise from the dead."
There are many intelligent economists who, when faced by the real social needs of real people in real societies, attempt to be both practical and imaginative. The importance of imagination is that while the people and their needs are real, economics is created with
illusions, which for the purposes of daily life must be treated as real. This is why large theories are so dangerous.They mistake conventional illusions for reality and so treat the people and their societies as abstractions.
Unfortunately the practical and imaginative economists have been increasingly frustrated by the rise of econometrics, the premise of which is that society can be reduced to the elements of accountancy. And since numbers are the face of god, it follows that all will be well.
This has been the dominant school since the 1970s -- so dominant that even sensible economists find they must conform to the conventions of numerology if they wish to be heard. And yet they know that in the real world numbers are what numbers do. They are not real and are rarely useful. Economics based on econometrics resembles King Canute,
sitting on his throne but on the bared beach and ordering the ocean not to rise. This is one of the explanations for the arbitrary division of the 1973 DEPRESSION into a series of recessions, each of which has been ordered to end.
ECONOMICS: The romance of truth through measurement.
An understanding of the value of economics can best be established by using its own methods. Draw up a list of the large economic problems to have struck the West over the last quarter-century. Determine the dominant strand of advice offered in each case by the community of economists. Calculate how many times this advice was followed. (More often than not it was.) Finally, add up the number of times this advice solved the problem.
The answer seems to be zero. Consistent failure based on expert methodology suggests that the central assumptions must have been faulty, rather in the way sophisticated calculations based upon the assumption that the world was flat tended to come out wrong.
However, streams of economists are on record protesting that they weren't listened to enough. That the recommended interest rate or money supply or tariff policy was not followed to its absolute conclusion.
This "science" of economics seems to be built upon a nonscientific and non-mathematical assumption that economic forces are the expression of a natural truth. To interfere with them is to create an unnatural situation.The creation and enforcement of STANDARDS OF PRODUCTION are, for example, viewed as an artificial limitation of reality. Even economists who favour these standards see them as necessary and justifiable deformations of economic truth.
Economic truth has replaced such earlier truths as an all-powerful God,and a natural Social Contract. Economics are the new religious core of public policy. But what evidence has been produced to prove this natural right to primacy over other values, methods and activities?
The answer usually given is that economic activity determines the success or failure of a society. It follows that economists are the priests whose necessary expertise will make it possible to maximize the value of this activity. But economic activity is less a cause than an effect -- of geographical and climatic necessity, family and wider social structures, the balance between freedom and order, the ability of society to unleash the imagination, and the weakness or strength of
neighbours. If anything, the importance given to economics over the last quarter-century has interfered with prosperity. The more we concentrate on it, the less money we make.
ECONOMIST, THE: A magazine which hides the names of the journalists who write its articles in order to create the illusion that they dispense disinterested truth rather than opinion.
This sales technique, reminiscent of pre-Reformation Catholicism, is not surprising in a publication named after the social science most given to wild guesses and imaginary facts presented in the guise of inevitability and exactitude. That it is the Bible of the corporate
executive indicates to what extent received wisdom is the daily bread of a managerial civilization.
See: MUSSOLINI.
[pp. 113-115]
EFFICIENCY: A skill of tertiary importance which can be useful if kept to its proper level and closely controlled.
Efficiency is also, of course, a very good thing. It would be foolish to waste time and money unnecessarily. On the other hand, what is actually necessary? What unnecessary?
The question that must be asked about efficiency is whether it should be treated as a driving force in a civilization or even in a society or even in an economy? Or is it no more than one of those useful little tools which can help us all to do better if it is used appropriately?
Those who preach the HOLY TRINITY of competition, efficiency and the market-place tell us that only the most efficient competitors will win in the new GLOBAL ECONOMY. Yet we can see from our own experience that those who become obsessed by efficiency often go bankrupt. The reason is simple. The market-place -- if allowed to function in a reasonable manner --will try to favour better products. These are produced
to some extent by competition and are to some extent reflected in low prices. But above all, they are the result of creativity and imagination, neither of which is efficient.
The great capitalists and the great companies make good use of efficiency but in such a manner that it must follow in the baggage train. If it is allowed to become a form of leadership, efficiency will go straight for the throat of imagination and strangle it until no
breath of life remains. Then the economic problems will begin.
If efficiency must be carefully controlled in order to be helpful in business, that principle is doubly true in other areas such as government and the arts. In places where the primary function is reflection, the intent being to search for solutions -- legislatures, for example-- efficiency is quite literally the enemy of the public weal. See: INEFFICIENCY.
[pp. 117. 118]
-- John Ralston Saul, "The Doubter's Companion" (NY: Simon & Schuster,
1994)
