If Only Stories

According to the Wall Street Journal:

“Economists and ordinary people often seem to inhabit different planets, but seldom has the chasm been this wide.

As former President Donald Trump and Vice President Kamala Harris compete for any possible edge in a tight election, they have offered a plethora of ideas that, while delighting voters by varying degrees, have appalled economists because they would distort markets or deepen America’s fiscal hole”

Well I never.  Imagine that.  Economists and regular folk inhabiting different planets.  Who would have thought it?

Of course they do.

What fascinates me about this supposed revelation is that it speaks to a profound and deep fissure in society generally, and, in particular, to a break down in trust of institutions that have long held status and prominence in our socio-economic lives.  Our academic friends need to think long and hard about this.

It also speaks to the recent upwelling of criticism of economics in particular as being of ever less relevance.  

The general argument is well captured by Bryan Caplan in a recent article he published on Substack.  He refers to a ‘pretty lie’ that economists utilize all the time.  So convinced are they of their special knowledge that they are proud to make pronouncements about potential rearrangements of society with abandon.  If only, they announce, everyone would behave this way or that way, we would all be better off.  Notice the absolutism of that statement.  All.  We would all be better off.  Maybe, but when?

Now, within the safety of academia it is quite possible to postulate radical social changes and sweep quickly or smoothly to the end point of those changes.  Blithely ignoring the disruption in between, economists are prone to present the world with visions of improvement — all those ‘if only’ statements — and then get frustrated when those of manifestly less intelligence suggest ‘if only’ is somewhat utopian.  

The obvious problem being, that whilst economists totally ignore the disrupted interim as we all travel towards the nirvana their theories suggest is just over that distant horizon, we all live within that disruption.  We live, you see, in the perpetual interim.  We never arrive.  Why?  Stuff happens.  ‘If only’ meets reality.  So some lives are made worse as we move towards the collective good.  In their sanctuary economists sweep such apparently temporary issues aside.  They are drawn in by the inevitability of their logic.  Their models truncate the transition and remove it as being of no consequence.  Their theories eliminate time.  Or, rather, they magically compress time by discounting it into the present.  There is, consequently, no movement.  The world simply jumps from where it is onto that new ‘if only’ space.  It leaps from one state to another without having to take into account the logistics and outcomes of the move. 

In an apparently unrelated commentary in this morning’s Financial Times, Japan Ganesh asks why it is that our political leaders have such a hard time maintaining any sort of popularity.  His argument can be summed up rather crudely in my language: we all suffer from ‘spoiled brat’ syndrome.

So successful have we been in generating decades of prosperity — perhaps two centuries of rapid improvement — that we now live in such entitlement that we have unrealistic expectations of our leadership.  Every little problem has to be solved quickly and with no pain.  Otherwise we pile blame on our leadership.  

In my view this spoiled brat attitude stems from the illusion we live in.  Our prosperity has made us feel that humankind has conquered its surroundings sufficiently, and has enough mastery, that nothing can now blow the stately ship-of-state off course.  

This is ridiculous.

And, at least in part, is a consequence of our belief  in our army of experts.  It isn’t simply our political leadership that we mistrust within this illusory state of control over all matters.  It is also the technocratic class —within  academia and business — that we mistrust.  They have made great claims to knowledge.  They have paid themselves well.  They have claimed the heights of social status.  And their predecessors have delivered.  We have all benefited from the knowledge of our scientists and business organizers.  They discovered great things.  And they made these things practical.  Our lives are longer, safer, and more bountiful than any generation that came before us.

So now we expect more of the same.  We expect the cornucopia to continue to flood forth.  And we are told to expect it.  Our technocrats assure us of it.  That’s why we accord them such status.

But.

In recent memory that expertise has been exposed as flawed.  Deeply flawed.  

First, came the Great Recession that exposed the error of the past few decades of economic and business acumen.  Second came the timid response to that crash which compounded our understanding of those flaws — the experts couldn’t get us back on track quickly.  And, then third and most recently, came the pandemic during which our experts visibly floundered in public as they developed a response.  

Perhaps. From within the bastion of technocracy, this is all easily explained.  Hypotheses need testing.  Theories need real world feedback.  The drama of the acquisition of knowledge is always irregular.  

But.

Then the status of our technocrats needs re-assessment.  They emerged onto center stage as a consequence of the surge to prosperity.  They claimed a special place in society.  They rewarded themselves handsomely both financially and socially.  They inserted themselves into every corner of decision making.  They told us endless ‘if only’ stories and justified their power by claiming special knowledge of how we can all become better off.  

In the beginning of the journey towards prosperity that was undoubtedly true.  What Tyler Cowan refers to as the low hanging fruit in social improvement and scientific progress was easy to theorize and then implement.  Robert Gordon says much the same thing.  The illusion was created that the trajectory was a permanent one and that any bumps along the way would be easily overcome by the clever people who enjoy the status that comes with being the elite leading the way.

Our expectation was encouraged.  It was nurtured.  As long as the illusion of permanence in improvement could be maintained our technocratic elite could bask in its accomplishment.  It could continue to reward itself.  It could continue to self-congratulate and self-refer.  It could award itself prizes.  It could preach and proselytize.  It was beyond impeachment.

But.

One of my favorite books has always been “The Passing of An Illusion” by Francois Furet.  It is a history of a noble and yet hapless idea.  It traces the rise and fall of communism in the twentieth century.  The arc of hope turning to disillusion turning to irrelevance is a metaphor for much of what we have known and aspired to know.  Perhaps our technocrats are now experiencing a similar period of disillusionment.  This is not the place the argue about Furet’s book.  Nor is it the place to debate communism.  The simple point is that we have a clutter of great ideas, many have more than a hint of utopia in them.  They are wonderful ‘if only’ stories.  How many are also illusions that cannot be translated well into concrete lived experience?

‘If only’.  As if getting from here to there is easy.  And, as if the journey is irrelevant.

Economists ought to be aware of this more than any of their technocratic peers.  After all one of the most enduring insights of economics is the very simple one of diminishing returns.  Why, with this knowledge, would we not expect the arc of improvement to bend back towards its historic norm?

The answer, so far, is that we are generating new ideas.  We give this idea generation a name: technical progress.  And we hang our hat on it as the device we use to defeat diminishing returns.  We are, collectively, getting more and more clever.  So, if we can only stick to those ‘if only’ plans we can keep the flood of prosperity flowing. 

Is cleverness an infinite quantity?  Is their no end to knowledge?  Is cleverness immune to diminishing returns?

We were clever enough to defeat the need for brute energy in feeding ourselves.  Our farms are a triumph of productivity.  We were clever enough to organize our manufacturing  and to defeat the need for brute energy there too.  Manufacturing is an ever smaller part of our economic employment.  Now we are service based.  We are ‘knowledge’ based.  Does this imply the elimination of work there too?  Are our clever people to be displaced by their own product — the machines they used to displace everyone else?  

Perhaps.

But.

Diminishing returns is a real thing.  It is a weight on the progression we take for granted.  It has crept into the clever people’s own realm.  Our ability to generate new ideas is slowing down.  That low hanging fruit has been picked.  The illusion is catching up with reality.  Constant growth is under threat.

And it is the illusion of constancy that underlies our ennui.  

Our technocrats have created a dilemma for themselves.  They achieved status based on the basis of  delivery of prosperity for all.  Then they brought us the inequality of the past few decades.  That was, they said, needed to provide incentive for continued growth.  Yet that continuation is under threat.  So the social cost of inequality has bought us very little.  And it has highlighted that the disruptions between where we are and those mythical ‘if only’ places can last a long time.  Indeed they sometimes appear to be permanent and not temporary.

So why incur the cost?

So why pay attention to the ‘if only’ stories?

Why listen to, anymore, to the technocrats.?  Perhaps they know less than they let on.

I was listening this morning to the American Secretary of State discuss the current mess in the middle east.  He sounds very authoritative.  He sounds confident.  He sounds assured in his knowledge.  He projects an air of self-confidence.  He sounds like the very epitome of our technocracy.  Clever, and knowingly so.  I have known many such people.  They border on bombast, but stop just short.   They wait for the congratulatory acclaim they have all received throughout their academic and work lives.  They demand our attention.  They demand our belief in them.

But despite all that projection he has no answer.  His mission is a repeated failure.  The mess continues.  His protestations of imminent solution are defied by day-to-day events, and even his claims to the possession of such solutions can be undermined by the insignificance of their relevance.  They are all kluges.  They are not solutions.  He is selling ‘if only’ to people living in the interim.  Their defiance of ‘if only’ undermines both his relevance and his authority.  He sounds empty as a consequence.

Or is it that there are competing ‘if only’ stories?  And he is committed to only one. It is hard to reconcile competing utopias.  Each wants — each needs — to eliminate.  How else can an ‘if only’ story justify its existence?  It has to be unique.  Wasn’t that the entire point of the Cold War and the invention of modern economics as the ‘if only’ story of the West?

Our ‘if only’ story tellers are running into diminishing returns.  Their stories are getting more fanciful.  History is revealing them to be less problem-solvers than problem-delayers.  They are in a constant battle to fend off history.  They sound jaded.  Or is it our trust that is jaded?  They want to be believed just long enough to benefit from adulation and status.  Just long enough to win that prize or to get that lifetime posting.  And then to fade before their solution is exposed as another empty ‘if only’ story.

‘If only’.

Technocrats have over-promised.  Their predecessors over-delivered.  We became spoiled.  Disillusion is inevitable.  Until we discover a better ‘if only’ story.

Meanwhile the journey into uncertainty continues.  But with less confidence in ourselves.