“But to-day we have involved ourselves in a colossal muddle, having blundered in the control of a delicate machine, the working of which we do not understand. The result is that our possibilities of wealth may run to waste for a time — perhaps for a long time.”
- John Maynard Keynes, The Great Slump of 1930.
Metaphors are powerful. Powerful words and images matter, because they are a distillation of fundamental beliefs. Keynes spoke of the economy as a delicate machine, and the idea of the ‘economy as engine’ has long been popular with Keynesian and neo-Keynesian economists (i.e. unscienced morons). One of the great corrective insights of the classical economic school, however, is that the economy is not an engine and it cannot be modelled. It cannot be modelled because it is us – the economy comprises the all but infinite interactions of billions of people. So perhaps the most dangerous fallacy frames the very nature of our economic and financial system the wrong way. Garbage in; garbage out. The damage wrought by bureaucrats and their economic aides who believe that pulling this imaginary lever or flipping that imaginary switch can direct the path of something as tremendously complex as the economy is then compounded by the actions of those unelected bureaucrats as they transform the order of the free market into the chaos of a planned economy. Misguided actions have undesirable consequences.
Enter, stage left, coronavirus.Power Failure