Thursday, October 11, 2012

All Quiet on the Macroeconomic Front

It's a good time of year to read John Locke. One can't help but think that political discourse would go better if we could
set down any Measures of the Certainty of our Knowledge, or the Grounds of those Perswasions, which are to be found amongst Men, so various, different, and wholly contradictory; and yet asserted some where or other with such Assurance, and Confidence, that he that shall take a view of the Opinions of Mankind, observe their Opposition, and at the same time, consider the Fondness, and Devotion wherewith they are embrac'd; the Resolution, and Eagerness, wherewith they are maintain'd, may perhaps have Reason to suspect, That either there is no such thing as Truth at all; or that Mankind hath no sufficient Means to attain a certain Knowledge of it.1
One might infer two dangerous consequences of excessive assurance on controversial matters:

  1. that erring partisans, happening to have the upper hand, might act too precipitously on their errors.
  2. that witnesses of the contention might conclude that no well-measured action is possible, and adopt an even more reckless quietism.
Locke is more concerned about the latter danger. I am, too.

But I am not so optimistic as he that the matters about which we are told we ought to weigh and to decide can be measured at all, even if we do not "intemperately require Demonstration, and demand Certainty, where Probability only is to be had, and which is sufficient to govern all our concernments" (46).F

Show me the measure according to which we can accurately (even probabilistically) prognosticate and manipulate macroeconomic affairs, and I will begin considering the economy a legitimate issue on which elections should be decided.

1Locke, John. Essay Concerning Human Understanding. Edited by Peter H. Nidditch. Oxford: Oxford University Press, 1985. 44.