Outside, the morning was obstinate, refusing to shine properly, as if even the sun had somewhere better to be. To be fair, it was Tuesday. Have you ever stood still long enough that you forget which way is forward, but still, you don’t actually care? This is what Tuesdays feel like, like if I vanished right now, only the kettle would miss me.
The trouble with economic myths is that they are often dressed in the garb of common sense, parading about like the Emperor in his imaginary new clothes, and we, the populace, too polite or too ignorant to say, “Hang on, isn’t that chap stark naked?” As Henry Hazlitt once proclaimed, “Economics is haunted by more fallacies than any other study known to man”.
“I think I’ve made a mistake” he said.
“Yes” she said.
“How did you know?” he asked.
“Well, you’ve either made a mistake, or you’ve mistaken it for one” she said.
Despite living in an age where a phone can order pizza, play Beethoven, and insult your intelligence – all at once, we still fall for economic tales as silly as flat Earth theories.
Take the Broken Window Fallacy. Bastiat, the 19th-century economic party-pooper, pointed out that fixing smashed glass doesn’t enrich us, it just replaces what we had. Yet after every disaster, the media gleefully chirp about the economic “boost” of rebuilding.
Then comes the Buy Local crusade, the economic equivalent of an itchy jumper from your nan. Well-meaning, but hardly practical. Trade works because people specialise. Local-only economics is patriotism with potholes.
And let’s not forget the Deficit Doom crowd, those perpetually pale souls comparing nations to households. “You wouldn’t spend more than you earn!” they cry. No, but I also can’t print currency, restructure debt, or influence interest rates by blinking at the central bank. Some deficits are reckless, true, but others are investments – the difference between a drunken spree and a mortgage.
The Sunk Cost Fallacy also lingers, keeping us chained to failures because we’ve already spent too much to stop. Literally the equivalent to “digging a hole”. Lump of Labour fallacy tells us that if immigrants or robots get more, we get less. If only we could do away with all our current jobs, cars, holidays, houses, and return to the good old days of ploughing a farm to pay for a straw bed and a short life expectancy.
And then there are the classic blunders: correlation masquerading as causation (ice cream causes shark attacks, anyone?), or the Post Hoc delusion, where taxes rise and growth falls, so obviously one caused the other. The media thrive on these, packaging coincidence as revelation.
Throw in appeals to authority (Professor Puffinsmoke says so!) and the Bandwagon Fallacy (if everyone buys tulips, what could go wrong?), and you have the full circus.
But the antidote is simple: a dash of scepticism, a sprinkle of historical perspective, and the courage to say, “I don’t know, but that sounds suspiciously like nonsense.”
:: REFERENCES ::
- Economic Fallacies – RandomBoo
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