Numbers are a good thing. Economics is full of numbers. It is perfectly natural to use numbers to count, to weigh, to study and compare. They make it easier and more precise to describe quantities. Instead of saying I drank a bucket of beer you say, I drank two 40s. Then instead of saying ‘I threw up all over the place,’ you say, I threw up on an area 4 feet square.But in economics we reach the point of diminishing returns with numbers very quickly. They gradually become useless. Later, when they are used to disguise, pervert and manipulate, they become disastrous. Hormegeddon by the numbers. Ask Deep Thought the meaning of life then and the answer is likely to be “Negative Forty-Two.”Exactly what point does the payoff from numbers in the economics trade become a nuisance? Probably as soon as you see a decimal point or a greek symbol. I’m not above eponymous vanity either. So I give you Bonner’s Law:In the hands of economists, the more precise the number, the bigger the lie.For an economist, numbers are a gift from the heavens. They turn them, they twist them, they use them to lever up and screw down. They also use them to scam the public. Numbers help put nonsense on stilts.Numbers appear precise, scientific, and accurate. By comparison, words are sloppy, vague, subject to misinterpretation. But words are much better suited to the economist’s trade. The original economists understood this. Just look at Wealth of Nations—there are a lot of words in that thing. After all, we understand the world by analogy, not by digits. Besides, the digits used by modern economists are most always fraudulent.“Math makes a research paper look solid, but the real science lies not in math but in trying one’s utmost to understand the real workings of the world,” says Professor Kimmo Eriksson of Sweden’s Malardalen University.
This is from the Agora’s Publishing chief Bill Bonner at the Casey Research.
Numbers are tools, they can be used for good or for deceit, so be careful with numbers.
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