Keep it simple?

I

Not to worry, we’ll scale up later, soothes the techno-managerial elite. Later on, presses the happy-talk, we’ll relax assumptions and add realism. Don’t bother yourselves with quibbles; we know how to reduce inequality (just give them a Universal Basic Income!), overpopulation (just don’t have babies!) and save the environment (just don’t cut down the trees!).

So much of these just-this suffocate in their own fat of “stop thinking about the uncertainties and get on with it!” This time it’s different, they insist; we really do know where to start, they insist. They insist: Just leave the complications to academics.

A war? Not to worry, economists tell us, it only amounts to some 1% of national income. Lost $350 million in one quarter? Not to worry, that’s small beer when compared to the university’s endowment of $30 billion. Lost over $5 billion in trades? Little more than a flesh wound compared to all the firm’s profits and assets. Government is predicted never to have a budget surplus again because of financial crises? Not to worry, there’s no need to balance the budget if the country’s nominal GDP normally grows at 5 percent per annum. And anyway there’s Modern Monetary Theory to print how much you need, whenever.

II

What’s going on here? Has economics lost the plot, like the actor playing Hamlet, who finished the bedroom scene with Gertrude but forgot to kill Polonius?

(Auguste Comte, sociology’s founder, is reported to have had such an aversion to economics that he tried convincing French officials to establish a chair in the history of science financed by abolishing a chair in economics. Now that’s what economists call a trade-off!)

The chief problem with “start simple and then scale up” is that each scale/level is complex in its own right. The map smooths out shoreline, but visit the shore and there’s nothing there so smooth that way. To start simple and scale up makes as much sense as trying to pinpoint the shoreline through the eye of a needle. Again, complex is about as simple as it gets.

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