Wednesday, June 5, 2013

Reasons for skeptics to try economics

There are many long discussions about if economics is truly a science. I am firmly in the "yes" camp, but I know many of my fellow skeptics are not and have no interest in it. This isn't my first post about economics for skeptics, but I hope it will be enough to draw some interest.

Point number one, Adam Smith, the founder of modern economics, wrote this in 1776:

Poor David Hume is dying fast, but with more real cheerfulness and good humor and with more real resignation to the necessary course of things, than any whining Christian ever dyed with pretended resignation to the will of God

Point number two, while it's true that other sciences have cool things, like astronomy visuals, biology's impressive cast of exotic beasts and geology has the ring of fire, but economics does too. We have virtual water. Let that phrase roll around your brain for a minute. Virtual. Water.

Point number three, Bertrand Russell, who created the famous cosmic teapot analogy, had this to say about economist John Meynard Keynes:

Keynes's intellect was the sharpest and clearest that I have ever known. When I argued with him, I felt that I took my own life in my hands, and I seldom emerged without feeling something of a fool.

Point number four, economics provides another tool to destroy myths. Take the one about medieval cooks using spices to cover up the taste of spoiled meat. It falls apart when you learn that spices were expensive and meat was cheap:

In the early 14th century, a pig cost the same price as a pound of pepper, which was the cheapest spice. John Munro, an economics historian at the University of Toronto calculated the price of spices in England in 1439 and used a skilled craftsman's wages of that date as a yardstick. 
The craftsman earned 8 pence a day. One penny bought him a gallon of milk, a pint of butter of lard, or quarter bushel of coal. 7 yards of good quality wool cloth would cost him 7 shillings, about 10 days' wages, but the same quantity of velvet would cost him between 200 and 300 days' wages. (note, only put your highest status characters in velvet if writing about this period!). A pound of sugar cost 16pence, so equivalent to 2 days' wages. Pepper cost slightly more and ginger slightly less. A pound of cloves would cost four and a half days' wages and the same of cinnamon 3 days'. He would have to work for a month to earn enough to buy a pound of saffron.

Point number five, economists know things. If a nation prints a bunch of money to pay its bills, economists know what will happen. If that nation shuts down international trade, economists know what will happen. If a nation abandons the rule of law, economists know what will happen. It's good to know things.

Point number sixwhen a christian conservative wrote to Milton Friedman about his agnosticism and asked where his values come from, Friedman wrote this:

I do not know where my values come from, but that does not mean (a) I don’t have them, (b) I don’t hold them as strongly as you hold your belief in God. (c) They turn out — not accidentally, I believe — to be very much like these held by most other people whether Christian, Jewish, Muslim, atheist, agnostic, or abstract. (d) Which leads me to believe that they are a product of the same evolutionary process that accounts for the rest of our customs as well as physical characterizations.

Point number seven, if you follow economics you will get to make inside jokes about The Ben Ber Nank:

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