Confessions - 1

I was an economist before I knew the word. Born in an industrial town in West Yorkshire, born, actually, in what has a good case to be thought of as the industrial town of the region - so much a pattern of spontaneous industrial development that a biography of the World Bank put its name on the cover of what every society could aspire to - how could I not be an economist?

Economic history was unavoidable. Go to a pub in my village and you’re in the place the Luddites stopped over as they fled their murder of a local mill-owner. Go to the swankies golf club, and eventually you’d discover that in Victorian times the steward at the grand house there was Richard Oastler, a prime mover behind the factory acts of the 19th century outlawing child labour. But also every morning count the number of chimneys on the way to school, because as the mills closed down, so the forest thinned out and thinned out. And my family? Yes, one of the mill-owning families, and my childhood memories include the too-often lament from my father: ‘trade’s bad’.

This is a true story: when I was twelve, my father took me round one of the knitting sheds, put his father hand on my shoulder, looked me in the eye and said: ‘Take a good look around son, because one day. . . . none of this will be here.’

Of course, he was right: very little remains of West Yorkshire’s once mighty textile industry. About 10 years later, I was running around Guangdong province as its own industrial revolution got underway. And there in Dongshan (I think), I was taken round a knitting shed. Same product, same Italian machines, same dust, same business. Somewhere in Guangdong, right now, I’ve no doubt a father is coming home tired, and lamenting to his family ‘trade’s bad’.

So my engagement with economics has always been not so much instinctive (though it is that) as actually visceral.

It turns out this is unusual. I get surprised by how people react to my work. Recently I was taken aback when I was introduced at an investment conference as ‘unusual, because he’s more of a philosophical economist than most’. More worryingly, another client quite casually told me ‘of course, you’re pretty much obsessive/compulsive about this stuff’.

My take: if you’re going to be visceral about economics, you’d better be philosophically aware, and you’d better be pretty obsessive about it.

I think this introduction is necessary because my Confession is also radical: although there’s a good appreciation that economics has clocked up a record of failure, there’s still a profound unwillingness to acknowledge how deep the roots of this failure go. I have become convinced that so utterly fundamental is its failure that it is no longer a question just of models being wrong or inadequate. The problems economics as a thought-game face will not, and indeed, cannot be solved by constructing better models. All the AI in the world cannot save it.

Why? Because many of the fundamental concepts of economics, the very words we use when we talk or write economics, are vacuous. Vacuous as in ‘empty of content’, carrying meaning only within the specific closed language game of academic economics. Quite unknowingly, in crucial and central ways, it has morphed into a sort of medieval metaphysics, the sort where exceptionally intelligent and dedicated people devote their lives to working out the number of angels able to dance on the head of a pin. If the fundamental concepts are emptied out of genuine meaning, genuine reference to the world it purports to explain, no amount of intellectual dedication and subtlety can rescue the endeavour.

If economics is to rescue itself, if it is to be a help rather than a hindrance in understanding and furthering mankind’s aspirations, it is going to have to tear itself down, right down to the roots of language itself.

This is what I will try to do: these are my confessions.