Good quote. I can’t agree more: if we can’t explain economics without a slew of equations amid the fog of data, we’ve already lost the battle of common sense.
Why you don’t need equations to understand economics.
From Andrew Ferguson’s “No Statistics, No Mischief: A Modest Proposal for the New Fed Chairman,” about Sir John Cowperthwaite, Hong Kong’s financial secretary, 1961-71, in the Jan. 27 issue of the Weekly Standard:
Cowperthwaite was a humanist in a field that had fallen victim to social science. I have no great confidence that Chairman Yellen will follow his lead—even if I advise her to do so—and banish statisticians from her cold marble temple on Constitution Avenue. As a highly decorated economist, she has reached the top of a trade that considers statistics indispensable to its own functioning.
But Cowperthwaite didn’t believe it. Stripped of his numbers an economist would have to resort to the old home truths about how the world works: If you tax something you get less of it; as a general rule an individual manages his own affairs better than his neighbor can; it’s rude to be bossy; the number of problems that resolve themselves if only you wait long enough is far larger than the number of problems solved by mucking around in them. And the cure is often worse than the disease:
In the long run, the aggregate of the decisions of individual businessmen, exercising individual judgment in a free economy, even if often mistaken, is likely to do less harm than the centralized decisions of a Government; and certainly the harm is likely to be counteracted faster.
Somehow the most successful practical economist of the twentieth century knew this was true, and he didn’t have to work out a single equation.