Economists and chaos
I wrote last week of why lawyers and economists have the most maligned—and, I add, mistrusted—professions around. For lawyers, it’s largely because they can just as convincingly argue either of the two opposing sides to any particular case; it depends on who’s paying. Economists, for their part, can either be “prophets of doom” or “prophets of boom,” depending on whether they choose to see the proverbial glass of the economy as half-empty or half-full. We economists are often painted as a confused bunch, particularly notorious for not giving people a definite answer; rather, we’d start talking of what would happen on one hand, then in the next breath say “on the other hand…”—hence the joke that the hardest thing to find is a one-handed economist.
There’s more where that came from. There’s the one I first heard from my then boss, President Fidel V. Ramos, who joked to an audience of economists that the problem with our profession is this: “If you put three economists in the same room, you can never get them to agree with one another. Now if you had two economists in the room, they would likewise just debate endlessly. And if you had only one economist in the room, he would also just keep debating himself!” I’m glad he trusted me for his Cabinet, nonetheless.
And then there’s the one about Vladimir and Donald (characters updated with recent events), chatting on the sidelines of a G7 summit. Vladimir complains: “Donald, I have a big problem and I don’t know what to do about it. I have 100 bodyguards and one of them is a traitor. I don’t know which one.” Donald retorts: “You think you have a problem, Vlad? Here I am, stuck with 100 economists I have to listen to all the time before making any policy decision, and only one tells the truth.” Vladimir says: “That sounds like the same problem I have.” “Yes,” Donald replies, “but in my case, it’s never the same one!”
While we claim our discipline to be a science—what with all the math we employ in our analyses—to most of our listeners, it sounds more like an art. There’s the joke that asks: “What’s the difference between an economist and a confused old man with Alzheimer’s?” The answer: “The economist is the one with a calculator.” It’s also said that there are two Laws of Economists. The First Law says: For every economist, there exists an equal and opposite economist. The Second Law says: They’re both wrong.
Economists are often faulted for reaching conclusions based on faulty assumptions (which is really what the “on one hand” and “on the other hand” are all about). Indeed, good economists are trained to spell out the assumptions underlying any economic analysis, and the conclusions they derive from it. Often, it’s the assumptions economists make that catch their audiences’ attention—which has led to the classic economist joke I tell my students at the start of every basic economics course I teach: A physicist, a chemist and an economist are stranded on a desert island with nothing to eat, when a can of beans washes ashore. The physicist says, “Let’s expose the can to the heat of the sun until it expands to the point of bursting open.” But it doesn’t work. The chemist says, “Let’s dip the bottom of the can in the sea water at the edge of the shore, until the corrosion makes it easy to open the can.” But that would make the beans inside unfit to eat. So the economist says, “Let’s assume that we have a can opener…”
In still another battle of the professions, a bragging session among a doctor, an engineer and an economist has the doctor first claiming that his is the oldest profession: “When God made Eve out of Adam’s rib on the sixth day of the Creation, surely He must have had assistance from a doctor!” The engineer, not to be outdone, points out that even before Adam and Eve, God had made the universe and the earth, and everything in it. “Surely,” he argues, “he must have had help from an engineer!” The economist, not about to lose the argument, reminds the two: “Ah, but well before God made the universe and the earth, remember that there was nothing but chaos all around. Now who do you think was responsible for all that?”
