By: Natalie Gochnour
Originally published in Utah Business
Winston Churchill once said if you put two economists in a room, you get two opinions, unless one of them is Lord Keynes, in which case you get three opinions. It’s a clever way of saying economics is an inexact science, and economists are known for equivocating. But do they also possess a sense of humor? Let’s consider both equivocation and humor and see if there are lessons to be learned.
Economic equivocation is standard fare in economics. It happens so much that decisions makers often don’t know whom to trust when making economic decisions. Should the Utah Legislature raise taxes to invest more in public education or will the tax increase stifle investment and hurt economic growth? Are low interest rates sustaining employment growth in this country or fueling the next housing bust? Is Utah’s 3.5 percent unemployment rate full employment? If not, what is?
These questions and hundreds more are difficult to answer because economics is complicated. The dismal science does not lend itself to lab research or precise formulaic assessment. Guesswork is part of the economist’s job.
Most economists agree on some things: tariffs are bad and free trade is good; centralized economies do not maximize economic potential; markets work, with some important exceptions. But on the whole, economics relies on millions and millions of independent decisions made by people who don’t always act consistently. It’s this lack of consistency that makes economics difficult. People do unpredictable things.
The complexity, uncertainty, equivocation, imprecision and inconsistency in economics has given birth to hundreds of jokes poking fun at the craft. Lawyer jokes still have the edge, but economics is catching up. Cloaked in the humor are instructive lessons about economics. Here listed under the heading of an important economic truism are a few of my favorite economist jokes:
Beware of economists who give you the answer you want to hear.
A mathematician, an accountant and an economist apply for the same job.
The interviewer calls in the mathematician and asks “What does two plus two equal?” The mathematician replies “Four.” The interviewer asks, “Four, exactly?” The mathematician looks at the interviewer incredulously and says, “Yes, four, exactly.”
Then the interviewer calls in the accountant and asks the same question: “What does two plus two equal?” The accountant says, “On average, four—give or take 10 percent, but on average, four.”
Then the interviewer calls in the economist and poses the same question: “What does two plus two equal?” The economist gets up, locks the door, closes the shades, sits down next to the interviewer and says, “What do you want it to equal?”
Economics is often imprecise. Get used to it.
Three econometricians went out hunting and came across a large deer. The first econometrician fired, but missed by a meter to the left. The second econometrician fired, but missed by a meter to the right. The third econometrician didn’t fire, but shouted in triumph, “We got it! We got it!”
Assumptions help us think through scenarios and provide structure to our thinking.
A physicist, a chemist and an economist are stranded on an island with nothing to eat. A can of soup washes ashore. The physicist says, “Let’s smash the can open with a rock.” The chemist says, “Let’s build a fire and heat the can first.” The economist says, “Let’s assume that we have a can-opener …”
Economists have a strange sense of time and typically insist on more data and more time.
Q:How has the French revolution
affected world economic growth?
A: Too early to say.
Economists tend to be negative. It’s not called the dismal science for nothing.
Economists have forecast nine out of the last five recessions.
Economists are often wrong, but still very useful.
An economist is an expert who will know tomorrow why the things he predicted yesterday didn’t happen today. (Laurence J. Peter)
If I’ve learned anything from studying economics, it’s the value of humility coupled with humor when studying complexity. There’s just so much we don’t know, and humor adds value and important perspective. I also know that nothing could be more important than seeking to understand what makes economies prosperous. We know that when economies prosper people live healthier and more fulfilling lives. And that’s no joke.
Natalie Gochnour is the associate dean of the David Eccles School of Business and the director of the Kem C. Gardner Policy Institute.