Do not put your faith in the false deities of economists
June 18, 2012 8:14 pm
By Philip Stephens
Economics is a faith-based pursuit forever in search of a new deity. Those who believe in a compassionate God struggle to explain how such a being can allow such terrible misery to be inflicted on life’s innocents. Belief in the canons of economics demands a comparable leap of imagination.
When I first started writing about the subject for the FT during the early 1980s, Margaret Thatcher worshipped at the altar of something called “monetary base.” The government, this creed promised, had only to regulate the quantity of notes and coins circulating in the economy and just about everything else would fall into perfect place.
Soon enough, monetarist fundamentalism proved a false prophet. The experience led to the annunciation of the heretical Goodhart’s Law. Bearing the name of one of the trade’s distinguished free thinkers, this says that as soon as Read the rest of this entry »