Equilibrium: A Weed to Pull
Just how pejorative must we be in order to get attention? There are silly things in economics that need to be weeded out, so that something better can emerge. Sometimes I just say the whole thing is a waste of time, after all economics is not simply a body of thought, but it is also a social phenomenon, it has its own language, its own self-referential estimate of quality, its own hierarchy, and its own history that locks it tightly along a specific path.
And, frankly, that path has led it astray.
Take this piece of silliness from one of its greats:
” Just as we measure gravity by its effects in the motion of a pendulum, so we may estimate the equality or inequality of feelings by the decisions of the human mind. The will is our pendulum, and its oscillations are minutely registered in the price lists of the markets. I know not when we shall have a perfect system of statistics, but the want of it is the only insuperable obstacle in the way of making Economics an exact science.” ~ William Stanley Jevons
Well, we do know about Jevon’s ‘perfect system of statistics’. We will never have it. An economy is too complex to fit neatly into any statistics Jevons could imagine. Maybe he was hinting at that when he called the lack of it an ‘insuperable obstacle’.
In any case, the entire search for equilibrium has bedeviled economics long enough. Those mechanical references to nicely oscillating systems slowly swinging away under the influence of gravity are totally inappropriate for something like an economy. Equilibrium is a nasty weed. It clutters up our garden. It distracts us from reality. Rip it out!
As I get older I get steadily more disdainful of the silliness embodied in the notion of equilibrium. It is something economists use to avoid engagement with the complexity of reality. It was a bold and popular idea back in the early days when economists were besotted with physics envy. It is irrelevant and likely to cause delusion in the context of our more modern understanding of reality. It plods along in the intellectual toolkit not because it is useful, but because no one dare say the truth: it is a weed. Rip it out.
If we want to move forward we need to stop using the word and the idea it introduces. Indeed the inclusion of a reference to equilibrium ought to be a disqualifying event for any academic writing on economics henceforth. Except, naturally, when it is included in a history of the subject as an example of something tossed aside as a hindrance to progress.
Besides, innocent though its origins might have been, equilibrium has become an ideological tool. The futility of pushing against the supposed inexorable motion of the free market as it inevitably settles down into equilibrium is the great and powerful argument of those who deny the validity of the government as a positive economic agent. And, since the government is ‘we the people’ acting in concert, equilibrium has become, consequently, an anti-democratic tool. For, if equilibrium is inevitable, we mere mortals have no right to question its ultimate position. Our resistance has no purpose other than to frustrate us and any foolish non-market thoughts we might harbor.
Equilibrium began its illusory life as an illumination of the bright magic of the marketplace. Then it became the dystopian pall behind which the opponents of democracy took cover.
It is a weed. It is toxic. Rip it out.
