Monday, August 29, 2016

Jackson Hole Magical Incantations

Adam Smith was a professor of moral philosophy, and as a part of his work he wrote an encyclopedic review of various economic ideas.   There was no field of economics in his time, there was philosophy, and questions of economics, man's relationship to man, was a subset of philosophy.

With the enlightenment, so to speak, came the attempt to separate economics from philosophy and make it a stand-alone science, under mathematics.  It can't be done, because economics is based on human action, unpredictable, as opposed to mathematics.  So when you read proofs from Jackson Hole,  such as below, you can be assured that no one there had any more idea of what it meant than you do; this session or any previous session where such magical incantations were presented for the silly geese present.

To the degree you depend on the hegemon's economy for your well-being, in that measure you depend on those people who nod approvingly at the above, but have gotten zero economic forecasts correct.  Not this time, not last time, not anytime.  But their week in Jackson Hole goes on your tab.

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