Paul Krugman recently did a Five Books interview with The Browser, talking about his five favorite books. The books are: Asimov’s Foundation series, Hume’s An Enquiry Concerning Human Understanding, two books by Lord Keynes, and a book of essays by economist James Tobin, one of Krugman’s old teachers. Of Foundation he says:
This is a very unusual set of novels from Isaac Asimov, but a classic. It’s not about gadgets. Although it’s supposed to be about a galactic civilisation, the technology is virtually invisible and it’s not about space battles or anything like that. The story is about these people, psychohistorians, who are mathematical social scientists and have a theory about how society works. The theory tells them that the galactic empire is failing, and they then use that knowledge to save civilisation. It’s a great image. I was probably 16 when I read it and I thought, “I want to be one of those guys!” Unfortunately we don’t have anything like that and economics is the closest I could get.
This sounded vaguely familiar, and looking around I realized I’d heard about this affection of Krugman’s for Foundation before, but again it strikes me as underlining a lot of what I find basically unappealing about the approach to economics and humanity which Krugman has.
To me, the interesting thing about the Foundation books is their historical sweep. Asimov said he got the idea from Gibbon’s Decline and Fall of the Roman Empire, and there’s a wonderful sense of the sweep of history, of loss and of scale in the books. (Of which, to my mind, it’s only worth reading the golden age novels, not the later ones tacked on.) But what’s incredibly frustrating is the gnostic determinism of the vision — that somehow, a really brilliant group of guys can working through a whole bunch of equations and calculate what is going to happen for centuries into the future, as if the universe were some gigantic difference engine with the people in it as gears, moved through predictable motions by the forces exerted on them.
This view, it seems to me, is not just incorrect, but also fairly dangerous. Wrong because it fails to take into account human free will, which is, it seems to me, one of the most defining elements of humanity. Dangerous because it offers the illusion of control, that one can take some great action and reshape society if one can only get people to stop acting as persons and play their appropriate parts in the grand machine.
To see economists as like Asimov’s psychohistorians seems to me to glorify economics far above than its proper level. What economics is fairly good at is explaining how certain mechanisms work “all other things being equal” — yet what makes it frustratingly approximate is the degree to which things are so seldom equal. As soon as people starting thinking of the economy as some great machine with levers just waiting to be pulled (whether it’s liberals convinced that if only we could put through a couple more trillion dollars worth of stimulus everything would be fine or conservatives convinced that we can always raise tax revenues by lowing tax rates) they set themselves up to cause more harm than good.