ECONOMICS: PSEUDO-SCIENCE YOU’D BETTER UNDERSTAND

My senior year in high school, I was a hot shot extemporaneous speaker on the Houston high school speech tournament circuit. If you’re not in the know, extemporaneous speaking is a major National Forensic League speaking event (“forensic” meaning competitive public speaking, not dead bodies): students draw a topic dealing with either domestic or foreign issues, then write and memorize a speech on that topic in thirty minutes; the speeches are delivered in front of a judge. My area of expertise was cold war diplomacy, history, and strategy. By the time I was a senior, however, I was becoming increasingly interested in economics, specifically “Reaganomics,” also known as “supply-side economics,” or just plain “voodoo economics” (a term coined by our current President’s father back in saner days).

Reaganomics was all the intellectual rage in conservative circles. Most people didn’t seem to understand yet—it just didn’t make sense to most Americans; how could Reagan massively raise the defense budget and then claim to be able to cut taxes in order to gain more tax revenue? But I just knew that there had to be something to it. If you trusted the Gipper, as I then did, Reaganomics had the allure of forbidden knowledge: as the 1980s conservative bumper sticker said, “vote Democrat; it’s easier than thinking.” I became as expert on the topic as a high school kid could. My knowledge of supply-side economics made me feel superior to liberals. An extemporaneous speech I gave at a tournament on the topic got me a first place trophy and launched me to the national speech tournament where I eventually ranked fifteenth in the nation. Those were the days…

Of course, Reaganomics, now known as neo-liberalism, is complete bullshit.

Even then, conservative as I was, I was starting to realize it. That same year, my buddy, Matt and I had been invited to attend a weekend seminar that we understood was to help us prepare for winning scholarship money in a speaking contest hosted by the Rotarians over what they called “The Ten Pillars of Economic Wisdom,” which is something of an ideologically loaded document to begin with. It turned out that this was no public speaking seminar. It was practically a cult-like indoctrination into the fundamentalism of the free market, a weekend of neo-liberalism, complete with real, live, right wing economists spouting their cruel nonsense.

At first, I loved associating myself with the grownup supply-siders—that made me cool like them. After a while, however, some warning bells started ringing in the back of my head that were increasingly difficult to ignore. The first, quiet ding-dings happened during a conversation with one of the right wing economists: he advocated doing away with the minimum wage in order to make the labor force more like a labor market, a “market” of people. I wanted to believe him. After all, he was a cool supply-sider who knew about such things, and sharing his beliefs would make me more like him, more Reagan-cool. But I just couldn’t. I didn’t have enough of an intellect at the time to explain why. I only had my feelings. Doing away with the minimum wage seemed heartless—of course, it is heartless; in fact, it needs to be raised today by two or three bucks.

Sixteen years later, I think that I now have the intellect to explain just what was so alarming about this “market” of people concept. Economics, as an academic field, obscures the difference between its theories and real life. Americans who think they know a thing or two about the field tend to forget or minimize the real world consequences of the conventional economic wisdom. Economics reduces people’s lives to ideas and numbers; compassion and justice are not the concerns of economics: this “science” is not only morally bankrupt, but also wildly inaccurate oftentimes.

Indeed, economics is rife with biases and unfounded assumptions. Most economists now days have a fierce belief in the correctness of the “free market”: the reality is that there can NEVER be a free market as long as government exists as a powerful entity and as long as wealth is allowed to accumulate so much that it can monopolize and interfere with the market. (Neo-lib guru Milton Friedman’s solution is to reduce government to a bare minimum, but to also have government police against monopoly. A weak government cannot affect powerful economic forces; Friedman’s goals are contradictory, and, therefore, impossible.) Most economists now days assert that all nations should embrace “free trade” in order to share in the bounty that has blessed America: the reality is that free trade does nothing but hurt developing economies; US industries didn’t develop without protective tariffs—this is universal: no economy will develop without protective tariffs. Most economists now days use the Gross Domestic Product as an indicator of our nation’s economic health: in reality, GDP, due to bias and gross omission inherent in its calculation, gives a wildly distorted view of the economy.

One of the biggest biases of the pseudo-science known as economics is that economists serve everyone. This is simply not true. Economics serves the powerful—it serves the government, business, and the wealthy. Economics rarely considers the little guy, people like you and me, except as labor or as consumers.

These biases and faulty assumptions are replicated at high schools and colleges throughout the land. Students who are not so bored that they don’t even care (which is how most people react) accept and embrace what they are taught, based on “scientific” authority alone, not really understanding, not really questioning the numerous holes in economic reasoning. These students ultimately become voters and then transmute their faulty views into faulty political reality at the ballot box.

The confusion, the authority of “science,” the dogma all make economics very useful as a tool of political propaganda. In other words, economics has status as a virtual religion, the more contemplative brother to Mammon. As Harvard law professor, Allen Dershowitz, has said, “the Bible can be used to prove almost anything,” so, too, with economics in the American political landscape. Politicians cite economic studies with almost religious authority. Politicians always clamor about the need to help the economy, to worship our god. Greenspan and others are the priests, shamans, and oracles, dispensing predictions, warnings, and wisdom. Even though economics, as an academic field, has it uses, the idea of “economics” is taken at face value, on faith, as a factual description of reality by people who don’t really understand it or the consequences of its prescriptions.

All in all, this is a pretty sad state of affairs. Economics, beyond the quasi-religious dimension, is extremely important: it is about power; it is about who wins and loses.

EXAMPLE: Neo-liberalism requires huge numbers of losers in order to properly function. Full employment creates a very tight labor market that causes an upward pressure on wages. In order to have big profits, labor must be cheap. Otherwise, there is less incentive to be a capitalist.

EXAMPLE: Socialized medicine could really be no worse than HMOs, but, at least, the government would have some responsibility to it citizens under a socialized system. HMOs are beholden only to quarterly profits. Under HMOs, the capitalists are the winners; most Americans are the losers.

EXAMPLE: (And this is probably the biggest one.) People cannot be elected to public office without the blessings of moneyed interests via campaign financing. Before the political primaries, presidential candidates must first pass through the “wealth primary.” Along with the millions spent on political lobbying by corporations and the wealthy, dirty campaign money makes US politics the realm of extraordinary corruption. Economic might, not the American people, rules the United States.

Winners, losers, and power: that is what economics is ultimately about.

Unfortunately, most secondary students are required to take only a single semester of the subject. Most college students don’t take it at all. Unfortunately, most economic news is confined to the business pages that most people don’t read, and journalists do an awful job of connecting the dots to show how economics and politics are hopelessly intertwined. Unfortunately, both the press and the schools disseminate a dry and boring understanding of the subject, almost as though they want people to be disinterested. Unfortunately, even if an American can wade through the morass of impediment to economic understanding, there are still the biases and faulty assumptions inherent in the discipline—rarely do people develop a critical view of economics.

The economic wizards of Wall Street command us not to look at the man behind the curtain, and we obey.

We must not obey. That’s why I’ve been making more of an effort lately to link to and comment on economic news stories. They’ve always been in the background here at Real Art, because economics really does affect almost every aspect of life, but I think I need to be more upfront and straightforward just because it really is a big, huge deal.

Besides, I think I need to make up for championing the cause of neo-liberalism in my youth. This is my penance. Every time Real Art gets a hit, I’ll think of it as a ritual flogging.

Aren’t I clever?

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