I started thinking to myself. “I hate that thought. It sounds so fatalistic. Almost as if nothing is worth bothering with unless it is in the short run. Stupid!”
Breaking my reverie, Henry continued, “The tragedy is that, on the contrary, we are already suffering the long-run consequences of the policies of the remote or recent past. Today is already the tomorrow which the bad economist yesterday urged us to ignore. The long-run consequences of some economic policies may become evident in a few months. Others may not become evident for several years. Still others may not become evident for decades.”
“Well, okay, Henry,” I said, “what the bottom line here?”
“In every case those long-run consequences are contained in the policy as surely as the hen was in the egg, the flower in the seed,” replied Henry. “From this aspect, therefore, the whole of economics can be reduced to a single lesson, and that lesson can be reduced to a single sentence. The art of economics consists in looking not merely at the immediate but at the longer effects of any act or policy; it consists in tracing the consequences of that policy not merely for one group but for all groups.”
“From what you previously said, it’s obvious that the lesson has not been learned, Henry,” I said. “What’s the overall effect?”
“Nine-tenths of the economic fallacies that are working such dreadful harm in the world today are the result of ignoring this lesson. Those fallacies all stem from one of two central fallacies, or both: that of looking only at the immediate consequences of an act or proposal, and that of looking at the consequences only for a particular group to the neglect of other groups,” Henry explained.
“At the same time, Henry, we do live in the present,” I said. “There are economic problems that need solving in the short term. Wouldn’t this concentration on secondary consequences also cause problems?”
It is true, of course, that the opposite error is possible,” said Henry. “In considering a policy we ought not to concentrate only on its long-run results to the community as a whole. This is the error often made by the classical economists. It resulted in a certain callousness toward the fate of groups that were immediately hurt by policies or developments which proved to be beneficial on net balance and in the long run.”
“So, is this widespread, Henry?”, I asked. “And, how do we deal with this kind of error?”
Replied Henry, “Comparatively few people today make this error; and those few consist mainly of professional economists.”
“It’s the professional economists that make this error?” I asked, as I thought to myself, “then what good are professional economists?”
Breaking my reverie, Henry continued, “The tragedy is that, on the contrary, we are already suffering the long-run consequences of the policies of the remote or recent past. Today is already the tomorrow which the bad economist yesterday urged us to ignore. The long-run consequences of some economic policies may become evident in a few months. Others may not become evident for several years. Still others may not become evident for decades.”
“Well, okay, Henry,” I said, “what the bottom line here?”
“In every case those long-run consequences are contained in the policy as surely as the hen was in the egg, the flower in the seed,” replied Henry. “From this aspect, therefore, the whole of economics can be reduced to a single lesson, and that lesson can be reduced to a single sentence. The art of economics consists in looking not merely at the immediate but at the longer effects of any act or policy; it consists in tracing the consequences of that policy not merely for one group but for all groups.”
“From what you previously said, it’s obvious that the lesson has not been learned, Henry,” I said. “What’s the overall effect?”
“Nine-tenths of the economic fallacies that are working such dreadful harm in the world today are the result of ignoring this lesson. Those fallacies all stem from one of two central fallacies, or both: that of looking only at the immediate consequences of an act or proposal, and that of looking at the consequences only for a particular group to the neglect of other groups,” Henry explained.
“At the same time, Henry, we do live in the present,” I said. “There are economic problems that need solving in the short term. Wouldn’t this concentration on secondary consequences also cause problems?”
It is true, of course, that the opposite error is possible,” said Henry. “In considering a policy we ought not to concentrate only on its long-run results to the community as a whole. This is the error often made by the classical economists. It resulted in a certain callousness toward the fate of groups that were immediately hurt by policies or developments which proved to be beneficial on net balance and in the long run.”
“So, is this widespread, Henry?”, I asked. “And, how do we deal with this kind of error?”
Replied Henry, “Comparatively few people today make this error; and those few consist mainly of professional economists.”
“It’s the professional economists that make this error?” I asked, as I thought to myself, “then what good are professional economists?”
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