The world can get along fine without economics and economists.
Imagine being shipwrecked on an uninhabited island with a bunch of your companions. Unfortunately there’s no chance of being rescued but fortunately the island has lush vegetation and is nicely wooded. To flourish, or even just to survive, you need skills and technology.
To survive and thrive, you would need people in your group who could farm, build shelters, make cloth, mine and refine ores, make tools, provide medical services, and do a whole variety of things. One profession, however, you wouldn’t need are economists. A society can get along perfectly well without economics and economists.
Or can it?
That’s true for a small group and since humans have lived in small groups for hundreds of thousands of years, economists and economics were not needed. However, in the last few centuries, that has all changed. Now we live in vast collectives of towns and cities, many of which have millions of inhabitants. We trade with others, many of whom live thousands of miles away. Now we do need economics and economists.
Economics does not tell us what we should or must do: it does not have the power to compel. But it has explanatory power. It can explain why we do what we do, and could reveal the possible consequences of our proposed courses of action. Most significantly, if powerful people who have control over and influence others — politicians, bureaucrats, public intellectuals, popular entertainers — are ignorant of the fundamental lessons of economics, it usually spells disaster for the people.
Worse than that, if the people are themselves unfamiliar with the basic economic truths, they are guaranteed to not be able to judge whether their elites are doing what is best for the collective. The fact is that the fundamental truths of economics are all counter-intuitive, and they seem to defy common-sense. It takes a bit of training, though not a lot of it, for us to understand the basics, and when we do, it becomes part of our common-sense.
Unfortunately, the fundamentals of economics are not taught to school-aged children. They teach all sorts of (ultimately) useless subjects but not economics. That’s a crying shame.
The good news is that now anyone can, if he wishes, learn the basics of economics because there are immense resources on the web for that. Will it improve his financial situation? No. But it will help him better understand the world he lives in. And if enough people understand the world as it is, then the ignorant elites will not be able to push policies that make the world worse than it has to be.
I keep thinking about India and its disastrous economic policies. If only, lord, if only the political leaders of India knew a bit of economics, if only they had advisors who understood economics, then Indians would have been better off. But no such luck. The vast majority of the politicians and bureaucrats are really ignorant and really stupid. That their knowledge of the fundamental principles of economics is abysmal is not at all surprising.
It’s all karma, neh?