Economists: The Magical Priesthood

In this powerful interview with Greek economist Yanis Varoufakis, Philip Pilkington poses the following question:

If what you say is true – and I believe the evidence is unquestionable in this regard – then economics is not a science whatsoever. It more so resembles a school of morality or even a philosophical cult. The old Greek Stoics spring to mind. They were a school of philosophy that not only taught certain ideas but demanded that their followers live these ideas in their day-to-day lives. But in economics the students aren’t even told that they’re signing up for a moral vision, a sort of religion or belief system, they’re told that they’re being initiated into an objective science. Perhaps you could reflect a little in that direction and its implications?

In his response, Varoufakis ascertains voodoo in economics:

Quite so. It is a priesthood that truly believes it is not a priesthood but, rather, a community of scientists. How do they manage to maintain this delusion? The simple answer is because their incantations involve rather advanced mathematics and their rituals are steeped in statistical tests and projections….

This is a most peculiar failure: The hapless economist uses the same tools as acclaimed physicists and astronomers. She has trained for years to speak precisely the same language as them, to understand the same advanced mathematics, to deploy most complex statistical methods which are an essential part of the scientific toolbox. It is, understandably, incredibly difficult to accept that her work is a form of higher order superstition; a religion couched in the language of mathematics and statistics. Tragically, this is precisely what it is. Come to think of it, what is it that separates science from mythology? The fact that scientific propositions are not self-referential. That, in science (unlike in mythology), when the facts clash with the theory it is too bad for the theory.

E.E. Evans-Pritchard (the famous anthropologist) once offered a brilliant insight into the social success of the priesthood within the Azande society. The question he asked is similar to yours (regarding economists): If they get it so wrong so often, how should we explain their continuing dominance? When the Azande priests and oracles failed to predict or avert disasters, why did people continue to believe them? His explanation of the Azande’s unshakeable belief in witchcraft, oracles and magic goes like this:

Azande see as well as we that the failure of their oracle to prophesy truly calls for explanation, but so entangled are they in mystical notions that they must make use of them to account for failure. The contradiction between experience and one mystical notion is explained by reference to other mystical notions. Evans-Pritchard in his Witchcraft, Oracles and Magic among the Azande, 1937

Economics, I submit to you, is not much different. Whenever it fails to predict properly some economic phenomenon (which is more often than not), that failure is accounted for by appealing to the same mystical economic notions which failed in the first place.

It reminds me of this prayer algorithm (by LOL god), which Craig Martin describes as impervious ideology: “it can’t be dented or contradicted by any empirical data. Or, rather, incoming data is slotted into existing categories (God’s work or God’s mysterious ways), and in such a way that anomalies aren’t allowed.”

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7 thoughts on “Economists: The Magical Priesthood

  1. Lillian Cannon

    Great post! I think this could be applied to most political theories, too. It matters not if the theory is ever borne out by events; true believers will always believe.

  2. J. A. Le Fevre

    While all very cleaver and rather rudely disrespectful (by this, I do not suggest it necessarily inappropriate), this is just analyzing an onion by inspecting (and mocking) the skin. Realize, as you should, that any such group you lampoon has been selected by our good mother nature as the most fit in the neighborhood (only the suvivors are left to inspect). Why do you suppose that the world has been dominated these last 500 years by human communities that emphasize prayer? Why would economists prevail who mimic the (rather successful) strategies of priests? There is more than just bad luck in the extinction of species in this competitive world. More than slight of hand to account for success.

  3. Cris Post author

    Your faith that cultural groups are under the pressure of natural selection is touching if not quaint, but it just isn’t so.

    As I’ve explained in numerous posts in this blog, including this one (and the comments), societies aren’t organisms and cultures aren’t subject to biological selection.

    It’s appropriate that you would make this argument about this particular post, because if you follow the link and read the entire interview, you will find it contains a devastating critique of simplified models that have little or nothing to do with what happens in the real world. Those who think cultures or groups are under biological selection pressure use similar or analogous kinds of models. Just because you have a pretty model or an elegant theory, this doesn’t mean it describes anything real.

    Why would groups who emphasize prayer have been more successful over the past 500 years? Aside from the fact that this is empirically false, it probably has much more to do with geography, economy, politics, and technology than it does with prayer.

    This goes straight to the heart of the problem you have with parsimony: instead of asking what things other than religion might give people a competitive advantage, you seem to always fixate on religion whilst ignoring everything else. Why is that?

    I recommend that you read “Guns, Germs & Steel” before making the “religion/prayer leads to success” argument. Both the Spanish and the Incas were religious and prayed. Are you implying that Spanish prayers were more efficacious than Incan prayers, and this caused the Spanish to be more successful? I sure hope you aren’t implying this. After reading that book, perhaps you could the factors which led one group to success over another. It surely wasn’t religion or prayer.

  4. J. A. Le Fevre

    Cultures do compete to extinction as did the Inca against the Spanish. This blog is dedicated to the phenomenon of religion and this column is (loosely) about culture, my reference to biology metaphorical. My comments to this blog typically address what I see as the significance of religion to the success of culture. That still seems to me at least, appropriate. I’ve read GG&S. An excellent book but a very high level analysis. Religion is further down the onion, and I suggest, a significant though largely overlooked aspect of cultural competition (though not actually overlooked in GG&S – Diamond recognizes it as an essential feature of growing a competitive community). I grant scant attention to the larger factors as they are better covered by nearly everyone else. I do not agree that ignoring evidence is parsimonious and I had not, but will now suggest that their supplication rituals were an aspect to the Incas’ ability to dominate their continent prior to the Spanish conquests.

    Why would groups who emphasize prayer have been more successful over the past 500 years? I believe I said ‘dominate the world’ (a bit of western-centric exaggeration). The suite of ‘axial religions’ prefer meditative supplication or prayer to human or animal sacrifices, and I suggest that their success over the last two millennia probably has to do with a more effective approach to managing large numbers of people vs. the supplication typical in the pagan model of live sacrifices (the Incas’, like the Canaanites’ favored children vs. the calves/rams/bulls favored by the more successful Arabs, Greeks and Romans). I am challenging models that simplify religion out of the analysis. That just seem to me germane to ‘the Origins, History and Future of Religion’.

    And if it works for religion, why not economics?

    Dimond, in other offerings, is quite emphatic of the role of religion in cultural success.

  5. Cris Post author

    What works in religion doesn’t work in economics because economists claim to be doing science and assert that their models describe and predict an empirically verifiable reality.

    Priests don’t make such claims and religions by loose definition don’t purport to traffic in empiricism. So what works in religion doesn’t work in economics.

  6. J. A. LeFevre

    You know that, I know that, but they are not selling to us. They are running in the dark mimicking what they see working for priests (ie: chanting undecipherable mantras), hoping no one notices. For the most part priests don’t know what they are doing, just following the rituals handed down.
    Cultural Darwinism.

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