Who or what can you trust to tell you the truth? That’s the great and burning question of our age. We’ve been failed by politicians and administrative bureaucrats. The media has generally proven itself deeply compromised. We’ve been lied to by legions of people over three years, and betrayed by many more. We’ve seen people give up their most hardcore principles due to one or another kind of fear.
Then you have the outright scams such as that overseen by Sam Bankman-Fried of FTX, which made magic money and served as a money-laundering operation for the Democrat Party, all under the cover of fashionably woke ideology to earn puffy media coverage. In private texts yesterday, he admitted it all: he feels bad for all the people robbed “by this dumb game we woke westerners play where we say all the right shibboleths and so everyone like us.”
The motives in most of these cases have been transparently obvious. The world in general has chosen symbolism (political preening) and security (professional and financial and reputational) over truth. Otherwise, we would have been told early on that lockdowns were pointless and that the vaccine would not be the magic shot to end the pandemic.
We would have been told about the downside to ramping up government transfer payments by $1 trillion in 24 months. We would have been told about the powerlessness of government in the face of a virus that was destined to spread everywhere. And we would have been told that there are no magic beans that caused tens of billions to appear out of nowhere to fund political insiders.
Now the coverups have begun. No one is to blame. No one will pay the price. In fact, no one did anything at all. No one locked you down, not at least anyone who is willing to stand up and take responsibility. We cannot even find the parties responsible for the vaccine mandates. There are elected officials that bear some blame but they won’t accept it. All they give us are excuses and claims that they just didn’t know.
We are left with a grim reality. We do not know whom to trust in this world awash in lies. I do have one award to give, however. It is to economics itself, which is a force of nature that no man, no government, and no agency can forever avoid. It’s the most beautiful feature of economic forces operating in the world. It forms a hard wall against the perpetuation of lies and silly visions.
As a science, economics is relatively young, dating to the late Middle Ages. It began as a tool of understanding certain features of the world that seemed to defy explanation. Why did a unit of currency buy so much more in one location than in another? How is it that over time, currencies of the same weight and composition gradually achieve similar valuation without any coordination by a central authority? What happens when more units of the same currency are discovered and mix with the prevailing stock of currency?
All these questions arose in the 15th century because money and complex economic structures began to appear for the first time. This was a departure from the ancient world when it was widely assumed that the only path to acquiring wealth was to take it from somewhere else. Not even the brilliant Aristotle imagined the possibility of rising wealth that benefited everyone. But in the late Middle Ages, we began to see that and it cried for an explanation.
Over hundreds of years, economics emerged as a logical/descriptive science that elucidated a series of laws that operate in the world that are independent of political will. The law of demand observes that more goods will sell at lower prices than higher prices provided nothing else changes. The law of supply observes that producers will make more available at higher prices than lower ones provided nothing else changes. The interaction between these two forces determines how much is sold and at what prices and the dynamics of change.
These laws do not exist in legislation. They operate like gravity, part of the structure of reality itself. You can distort and delay their operation but they eventually come to have their way regardless.
There are other laws such as that which pertains to money and prices. All else being equal, increasing the quantity of money available will drive prices higher without other changes (such as production or the pace at which money changes hands). All the fancy finance in the world cannot change this eventual outcome. And it is true for laws concerning saving, investment, and production: all increases in wealth in the future must be preceded by the deferral of consumption in the present.
Maybe these laws are so simple. Most truly brilliant insights are. Once you see them, you cannot unsee them. And yet powerful people in all times and places like to live in denial of them. FTX is a great example of this: in retrospect, this was the most implausible company that one can imagine, very obviously too good to be true. That intuition has proven correct.
But examples are all around us. In March of 2020, most of the world’s governments decided that they could somehow switch off the economy to manage the spread of a virus. This was grotesquely wrong in two ways. There is no way to switch off an economy entirely without risking mass suffering and starvation. Moreover, there is no way to intimidate a virus into disappearing from the earth by stopping human interaction.
The destruction of such actions was covered up by wild spending and printing made possible by the world’s central banks, all of which cranked up their rackets at the same time. Now we are dealing with a wicked global inflation that persists despite every attempt to stop it. Like the virus itself, the monetary fakery must become endemic in the form of ever higher prices until the whole system readjusts.
The beauty of economics is that it operates without any central direction and nothing can stop its operation. Economic forces blithely ignore the pronouncements of all the powers of the world, from governments to corporate to media darlings. Economics doesn’t care. It just keeps revealing the truth about the world no matter how many people decry it.
It is for this reason that in hegemonic states arrogant intellectuals have always despised economists. In 18th-century France, the economists came to be hated by Louis XV for calmly and meticulously warning against trade protectionism, price control, monetary expansion, and high taxation. That’s where the term “ideologue” comes from: the court denounced the economists for promoting the view that there are fixed laws operating in the world that are more powerful than kings.
It’s all the origin of the phrase “dismal science:” the pre-fascist thinker Thomas Carlyse used that term to denounce the economists for opposing slavery not only on moral grounds but also because any system that robs anyone of volition is at war with economic growth. He declared economics dismal for its affirmation of the idea of universal rights and equality.
Economics has always been the business of saying: sorry but your dreams are illusions, no matter how much you believe them or how much power you have to enforce them. Economics is all about observing the indefatigability of cause and effect. You did this and that will be the result, and there is nothing you can do to change that.
We should delight in seeing the way economics today is so busy punishing the puffed-up powers that be who imagined they could shut down the world and cover their crimes with paper money. Now we see where it gets us. And so too for all the many high-flying tech companies that got rich off the system but now face the terrifying scythe of the balance sheet: they are dumping employees everywhere to reduce costs in a recessionary environment.
Economics eventually gets its way. It is a teller of truth. And this is why I’m not especially broken up to see FTX collapse, the dramatic payroll cuts in the tech sector, the rise of inflation that necessarily follows shoddy monetary policy, and the gradual fall of the world economy into recession and depression. This is the price to be paid for egregious policies. Yes, this is humbling, even terrifying, for the powers that be. Economics reminds them that reality is a more powerful force in the world than the dopey dreams of both visionaries and outright fakes.
Who or what can you trust to tell you the truth? In the long run, economic forces are what put a hard stop on the lies. They deserve our respect and admiration.