Wednesday, October 22, 2003

John Kay on The Lure of Amateur Economics

A very nice article. As I like to say, there are only two fields in which people have no compunctions about expounding their views vigorously, in spite of having virtually no knowledge of the contents of the subjects: evolutionary biology and economics.

Samuel Brittan calls it businessmen's economics. David Henderson, long an international civil servant, prefers DIY economics. Both refer to propositions that people who have practical knowledge but no qualifications in economics hold to be self-evident, but which are false. Countries would do better to export more and import less. New technology destroys jobs, and public spending on my projects not only helps me but also creates jobs. Manufacturing is more important than other forms of economic activity. Business would benefit from lower interest rates.

People who would pause before expressing opinions on quantum mechanics or undertaking brain surgery have no hesitation in pronouncing on the economic consequences of the euro.

I highly suggest reading the rest of the article; it isn't very long.