Conversation with Henry Part 01

Henry, an acquaintance of mine, said to me once. “economic fallacies are so prevalent that they have almost become...orthodoxy”.  Missing his point, but with my curiosity aroused, I asked him in return, “Henry, what do you mean “almost”?  You need to explain the “almost” part.”

Said, Henry,  “The one thing that has prevented this has been their own self contradictions, which have scattered those who accept the same premises into a hundred different 'schools,' for the simple reason that it is impossible in matters touching practical life to be consistently wrong.”

“Hold it”, said I, still missing the point and now wishing I hadn’t asked my question, “what’s this hundred different schools thing?

Henry calmly replied, “the difference between one new school and another is merely that one group wakes up earlier than another to the absurdities to which its false premises are driving it, and becomes at that moment inconsistent by either unwittingly abandoning its false premises or accepting conclusions from them less disturbing or fantastic than those that logic would demand.”

“You are not helping me, here, Henry”, I said, getting a little agitated.  “I am still not understanding.  Something like this sounds bad enough at the personal level but, how does it operate on the political level?”

Said Henry, “There is not a major government in the world at this moment...whose economic policies are not influenced if they are not almost wholly determined by acceptance of some of these fallacies.”

I am now getting a little more than agitated.  I am on the verge of getting upset.  “I am still not understanding, Henry”, said I, “how is it possible that all those government economists can accept economic fallacies as being fact?  They can’t all be wrong, can they?

Henry replied, “Perhaps the shortest and surest way to an understanding of economics is through a dissection of such errors, and particularly of the central error from which they stem”.

Now, I am upset.  Still resisting the idea, I say to him, with more than a little sarcasm in my voice, “So, what you are telling me, Henry, is that all the wonderful-sounding pronouncements of government economists really have no sound economic basis.  Is that right?”

“Many of the ideas which now pass for brilliant innovations and advances are in fact mere revivals of ancient errors, and a further proof of the dictum that those who are ignorant of the past are condemned to repeat it,” replied Henry, irritatingly calmly.

Feeling frustrated, and with a hard edge to my voice, I cut him off, saying, “I don’t have time for this right now, Henry”.  “We’ll have to pick this up later”.