The New Priesthood
- "The hapless economist uses the same tools as acclaimed physicists and astronomers. She has trained for years to speak precisely the same language as them, to understand the same advanced mathematics, to deploy most complex statistical methods
which are an essential part of the scientific toolbox. It is, understandably, incredibly difficult to accept that her work is a form of higher order superstition
; a religion couched
in the language of mathematics and statistics. Tragically, this is precisely what it is."
E.E. Evans-Pritchard (the famous anthropologist) once offered a brilliant insight into the social success of the priesthood within the Azande society. The question he asked is similar to yours (regarding economists): If they get it so wrong so often, how should we explain their continuing dominance? When the Azande priests and oracles failed to predict or avert disasters, why did people continue to believe them? His explanation of the Azande's unshakeable belief in witchcraft, oracles and magic goes like this:
"Azande see as well as we that the failure of their oracle to prophesy truly calls for explanation, but so entangled are they in mystical notions that they must make use of them to account for failure. The contradiction between experience and one mystical notion is explained by reference to other mystical notions..."
: Part II
- "What can be salvaged from the theoretical wreck that is economics? My answer is: The process of discovering the limits of analytical reason.
By studying critically all models, we end up none the wiser about quantitative outcomes but much, much smarter about the complexities of really existing capitalism
... while we shall not have a determinate model of prices and quantities, we shall be much more appreciative of capitalism's motivated irrationality
, its penchant for surprising even the powers that be, its capacity to create incredible wealth and untold suffering by means of precisely the same process..." [1
How Alchemists Invented Modern Finance
- "The amazing capacity of credit to create value -- and to destroy it -- has often been compared to alchemy. After the alchemists failed in their search for the philosopher's stone, the mythical substance that could turn ordinary metals into gold, the power of creating something out of nothing has come to rest solely in the hands of the financiers... it turns out that there is a much deeper connective bond between alchemy and modern finance, dating back to the 17th century, when the modern financial system was just forming. The big problem facing England at the time was a scarcity of money. Because the country lacked an adequate circulating medium, commerce was lagging, textile manufacturing was in a tailspin and various unemployment-related social problems kept on increasing... social reformers, scientists and political economists -- gathered around the London-based Prussian emigre Samuel Hartlib
. The Hartlib Circle
, as they became known, wrote and disseminated advice on how to transcend nature's scarcity by advancing agriculture, horticulture, botany, mechanics, manufacturing, chemistry, fishing and so on. They hoped to spark a process of infinite improvement that would gradually eliminate all social, economic and political problems and eventually establish a kingdom of heaven on Earth... They published the first proposals for a generally circulating credit currency, which provided the basic inspiration for the eventual creation of the Bank of England in 1694