Award for economic stupidity with a recession in the background

First law of economists: for every economist there is another equal and opposite. Second (and last) law of economists: both are wrong. Marcelo Justo thus closes his article Five jokes that reveal why economists are almost always wrong on the BBC International Service. The British press appreciates irony, even when things look bad. Or precisely then. We are approaching a more than complicated period, with the recession at the door and the central banks pulling levers like crazy to stop an inflation that follows its own course. Let’s laugh for a while, at least.

The parody of the Nobel

The recent Ig Nobel Prize ceremony, the hilarious reverse of the Nobels who finances the satirical magazine The Annals of Improbable Research, has once again brought to the fore the humor that emerges from economic (?) science as soon as the microscope is applied to it. It does not seem by chance that, of all the categories, the one that has attracted the most attention, with wide repercussions in the media, has been Economy (so, with capital letters). The award has been won by a team of mathematicians from the University of Catania They have developed a system to analyze why success tends to elude talent. Apparently, what the culture mainstream considered as propitious qualities yield to the prosaic reality of chance.

According to these experts, intelligence shows a Gaussian distribution among the population, while the distribution of wealth tends to follow Pareto’s law. That is, heMost people have an average IQ., while above and below there are only a few. On the other hand, the theory of such Vilfredo Pareto states that the distribution of wealth tends to be arranged around the magic numbers 80 and 20: 20% of the population monopolizes 80% and 80% of people share the remaining 20%. . Next year marks a century of Pareto’s death. Lately in these questions the dynamic of 1 versus 99 sounds more.

Given the gap between the distributional structures of intelligence and success (economic, at least), the key, as we said, is luck. Many of us suspected it, but now some Italian mathematicians have proven it with simulations in which the guys who reach the top tend to be in the wide middle zone of the Gaussian bell of intelligence. We assume that they have been deduced influences such as family inheritance or contactsespecially in countries like ours or that of laureate scientists, so prone to crony capitalism.

In any case, the Ig Nobel, let’s not forget, rewards the absurdity of academic effort. The engineering category, for example, was won this year by a team of industrious Japanese industrial designers embarked on the epic task of discovering the best way to turn a doorknob. Apparently, the main conclusion is the following formula: the greater the volume of the knob, the more fingers have to be involved in the task of turning it, with the consequent waste of human energy (which is not there to throw it). In addition to the ignominy, the winners of the Ig Nobel receive a 10 trillion Zimbabwean dollars out of circulation since 2015 and with an estimated value of a few euro cents at the exchange rate.

More than entertainment

Such arrobas of surrealism, if we stop to reflect, can give of themselves more than just entertainment. For getting super, we can quote The joke and its relation to the unconscious, by Sigmund Freud, and talk about underground currents of meaning that sprout in jokes and sprinkle a sick society with laughter. Justo prefers to tell how a branch of the peculiar species of experts created “the economic Kamasutra” without being very clear about anything really related to the real economy (and sorry for the uneconomical redundancy).

Justo says that “both in the State and in the private sector they provide the ‘discursive-rational’ support of the economic measures that a Government or a company will adopt”, but more and more people believe that this does not serve “to successfully make the a factory or conduct a business. He also points to his great weakness: «Economists have forecast nine of the last five recessions». The mental juggling with the crisis of 2008 threatens to come to nothing with the one that is coming.

An economist of the prestige of Carlos Rodríguez Braun has written what is perhaps the most canonical book of the genre in our language: economic nonsense. With fine irony, the author unfolds a remarkable anthology of nonsense. His dual Argentine and Spanish nationality has probably endowed him with an extraordinary wealth of experiences in this regard. The book now has three editions, with renewed nonsense, but the source, we fear, is far from exhausted.

The approach of Peter T. Leeson, Professor of Economics and Law at George Mason University, is perhaps more detailed and structured, as his book The great circus of the economy rehearses a “historical journey through the facts and the most crazy economic decisions”. The history of humanity gives a lot of itself. Tired of predictions about the rise of the Euribor, we can relax with ecological measures such as the tax raised in Ireland on the flatulence of cows, so polluting, the trials of the cockroaches in Italy or the auctions of wives in England in the 18th century. Maybe later the news will make more sense.

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Award for economic stupidity with a recession in the background