Had it not been for the explanation and causality-seeking animal in me, economics would have never drawn my attention. I recall my prior expectations of groping for the sole truth about every plausible debate on economic policies and beyond. Quantifying complex human interactions, converting mechanisms of the society into equations, filling models with data, perhaps all disposable information, and ultimately deriving causalities, and of utmost importance - factual wisdom - it was all assumed to establish « The General Theory ». As for my own rulebook of conduct, I used to swing from one approach to another to shield myself with an illusion of control over the things I had none, or too little. Call it the paradox of the greatest self-deception. Hunting for inattendu at all costs, all while presuming the implied predictability. There is no such thing. No General Theory, no universal approach, no plan at all. Over the course, all of the great expectations were reduced to one reasoning to hold on to: in the presence of uncertainty, variables de trop and perpetually incomplete cognition, no idea can be built on a firm basis. All is to be relentlessly questioned, assumptions to be challenged, changes to be scrutinized and models to be revised in line with white noises, if not abolished.
The clocks have been always striking thirteen.
Both the core question in economic modelling « what is the correct set of rules for the most satisfactory approximation of reality ? » and the eternal « how to make some sense out of life ? » raise in tandem, suffering from the very same - reluctance to integrate the fact that the world is a mere chaos governed by chance tangled in endless interactions and non-linearities.
Not all is lost.
CURIOSITY, CHANGE & DANGER
The ardent curiosity does and shall result in a greater accumulation of erudition and hence prevents from being trapped - in a set of tacit moral codes, realm of familiar and known, unique political doctrine, blindly clinging on to a theory. Alas, people often tend to cherry pick the facts that go in line with what they grew, if not were taught into believing instead. Try to confront your buddies with points of view that oppose their own - many would be reluctant. Jeremy A. Frimer, Linda J. Skitka and Matt Motyl did, yielding the following result: people stick to the information that affirms their pre-existing beliefs. Worse still, in the same way as people did not evolve to be honest, or too little, turning their lies into truths and absolutes, our capacity to reason may have not evolved to help us gather greater knowledge.
« What reason does, rather, is help us justify our beliefs and actions to others, convince them through argumentation, and evaluate the justifications and arguments that others address to us. »
Hugo Mercier & Dan Sperber
If you are not questioning the status quo, in the case of an economy along with society, we are heading for calamity. On an individual level, you are doomed to blank existence. After all, embracing novelty serves as a cornerstone for both expanding the perception of own existence and intensity of living itself. Nothing was ever created from one's unconditional happiness or keeping yourself safe and sound like an inglorious coward - it essentially stems from struggle and danger, whether you choose it voluntary or not.
COMPLEXITY, SHOCKS & DISTORTIONS
Turning to economic modelling and beyond, « all models are wrong, some are useful » of the statistician George Box resumes fairly the essence of our attempts to model the complexity of reality. Are the brand-new and fancy tools applied to agent-based models, complexity economics and network theory our new paradigms ? Perhaps not, but starting on the individual level while examining economic outcomes and focusing on the extent to which rational and irrational (I will let you decide on the appropriate definition yourself) interplays affect them may as well unveil something previously unknown that matters. Yet, economies and financial markets are intrinsically dynamic due to the relentless adjustments of market participants. People respond to incentives and are ready and willing to alter their behavior in the light of changing conditions. No conclusions derived from theoretical frameworks nor empirical studies shall be considered as static. When given information and pre-setup conditions change, what do you do?
Focus on shocks and distortions. The problem is that the normal, the equilibrium, the optimal so thoroughly scrutinized by orthodox economists are usually irrelevant. While human heights may be, a vast majority of processes are not subject to the Gaussian distribution and the crucial dynamics in economies are indeed produced by substantial and consecutive shocks. This is undeniably what conditions our lives the greatest too.
ART OF LIVING
Above all, Ki-Taek may be the one to have taught his son and in fine us the greatest lesson of all - the one of the absence of the plan.
« You know what kind of plan never fails ? No plan. No plan at all. You know why ? Because life cannot be planned. Look around you. Did you think these people made a plan to sleep in the sports hall with you ? But here we are now, sleeping together on the floor. So, there's no need for a plan. You can't go wrong with no plans. We don't need to make a plan for anything. It doesn't matter what will happen next. Even if the country gets destroyed or sold out, nobody cares. Got it ? »
Ki-taek, Parasite (2019)
How to combine the omnipresence of uncertain, unknown, unseen and the intensity of living de haute de gamme, intrinsically risky since it comes along with the juxtaposition of forceful euphoria, vast discoveries and great distress ? Voilà, one of the greatest challenges of the art of living.
Hugo Mercier & Dan Sperber (2019). The Enigma of Reason. Harvard University Press.