Economics is nothing more than interior decorating

By Roger Diamond

There are many problems with economics, but how can I take economists or economics seriously when they never look back? There is something really flawed about a field of endeavour where 10 years is considered infinity.

Look at almost any economic report and it will compare things with the previous year or even the previous quarter within the same year. Occasionally you will see a trend over the last few years, or a projection for five years hence, but this is rare. What about looking over the lifetime of a person, which is really not such a long time anyway? Or that of a nation, since independence or some major re-configuration of the borders, a war or similar event — why do we not get a long-term look at economic facts?

Here are a few possible reasons. Perhaps economists have produced such garbage projections that when viewed with hindsight, they are laughable. Or maybe there is so much published that it’s impossible to sift through and find something meaningless, which doesn’t sound reasonable and sounds more like laziness to me. Or things are not published at all and there are no records of economic projections and outlooks to compare with what actually happened. Or, possibly economists are so busy dreaming up the next scenario that they never bother to look at those from the past, or even to use past data to help extrapolate their projection. All of this smacks of very poor quality science, or no science at all.

For economics to be of any use to us, it needs to show us long-term trends, such as the amount of money in circulation, the prices of goods, the level of debt, consumer spending and so on, over periods of decades. And to compare these various indicators to each other, to come up with correlations. But even more importantly, these economic indicators should be compared to environmental ones, such as deforestation, damming of rivers and mining. Then maybe we will learn something.

For the first time, economists may actually understand that as you cut your forests, your forestry industry grows, but soon enough (over decades perhaps), as your forests run out, your forestry industry will die. It’s a simple enough fact to grasp. The same thing applies to oil. The oil industry is huge currently, but sure enough, as oil supplies dwindle, as they will, as any finite resource will, the oil industry and everything dependent upon it will die. The global economy comes to mind.

Entertaining us with figures that show “up” this month and “down” from last quarter, is like talking interior design, when the foundations of your house are slipping away. Economics as a discipline is failing to be useful to our society and our survival by being so short-sighted. Is economics here simply to serve the traders on the stock market to make a quick buck buying and selling, or is there any chance that it may serve a greater purpose and help us out of the environmental and economic mess we find ourselves in?