Arnold Kling is working on a nice metaphor of two types of economists.

The Hoh rain forest has park rangers. They do not try to regulate the rain forest. They regulate other humans, to keep them from disturbing the forest.

Park rangers study the rain forest, but not with a view toward controlling it. They study it out of curiosity. They recognize that as much as they learn, they cannot know everything about how the rain forest works.

At the U.S. Botanic Garden, there are what I would call museum curators. They designed the indoor rain forest, and they implement the design. Nothing grows where it shouldn’t, and anything that is at risk of dying will either be restored to health or replaced.

I see park rangers as a metaphor for how economists ought to stand relative to the market. We should study it out of curiosity, rather than from a desire to control it. We should not be inclined to regulate it.

The museum curators are a metaphor for mainstream economics. If they came to the Hoh rain forest, mainstream economists would look for "market failure’" in which some species overgrow and others fail to thrive. They would see a lack of organization. They would see a need to better regulate temperature and moisture.

I’d like to offer the third alternative of an economists as an Arborist. We study the forest. Have a deep respect for it and appreciate that we will never live to see the day when mankind fully understands it. Arnold might suggest that this day will never come. I tend to think that one it probably will, but not in my lifetime.

In any case I do think we now enough to be able to roughly identify diseases. This is not to say we completely understand the process of botanical diseases or even always get the diagnosis correct.

However, we can through experience learn to recognize major ailments and work to ameliorate some of their worst effects.

Where we have to be careful is in thinking that we know what is best for the forest or can meaningfully direct its action. We also want to be vigilant in impressing upon others the interconnectivity of the forest ecosystem and the danger of rushing in where angels fear to tread.

However, we shouldn’t sit by while a new virus sweeps through and destroys the trees we love. In perhaps the grandest sense we could say, that yes these trees may die but we don’t worry because eventually they will be replaced by other trees in a never ending circle of life.

This is very true. But, we care for and love these trees — and that matters. On a deepest level it matters because our emotions are the ultimate source of value. At their core the trees are just another set of molecules. They are beautiful because they are beautiful to us.

In the same way we could sit by and watch markets fail and say yes one day everything will be better. In the case of a debt deflation for example, it will eventually be better if because of nothing else,  then because all of the debtors will one day die.

This is natural and its is true that the forces of economic evolution will rebuild a market from the diseased economy that we observe. But, we care about people. We care about suffering. We don’t want them to be downtrodden until they are removed by death.

The market itself only matters because it makes people’s lives better. The economy only matters because we care about the people who make it up.

Thus it is right that take the knowledge of market failure that we have and do what we can to alleviate what suffering we can.

No we should not pretend that we know best where the economy should end up or that our cognition is any match for evolution. However, we set aside all value if we say that we cannot use what little we do know to ease what pain we can.

About these ads