Quote of the Day: Why you don't need equations to understand economics

Stripped of his numbers an economist would have to resort to the old home truths about how the world works: If you tax something you get less of it; as a general rule an individual manages his own affairs better than his neighbor can; it's rude to be bossy; the number of problems that resolve themselves if only you wait long enough is far larger than the number of problems solved by mucking around in them. And the cure is often worse than the disease:

In the long run, the aggregate of the decisions of individual businessmen, exercising individual judgment in a free economy, even if often mistaken, is likely to do less harm than the centralized decisions of a Government; and certainly the harm is likely to be counteracted faster.

Somehow the most successful practical economist of the twentieth century knew this was true, and he didn't have to work out a single equation.

This is from Weekly Standard’s Senior Editor Andrew Ferguson published at the Wall Street Journal Notable & Quotable section. (hat tip Prof John Cochran at the Mises Blog)

Mr. Ferguson proposes that the Federal Chairman Janet Yellen adapt a John Cowperthwaite paradigm. Mr. Cowperthwaite has been largely credited for the economic success story of Hong Kong via free markets.

The point of the above isn’t entirely to shun or scorn statistics but to know of its fundamental limitations and the perils of relying on them to solve social problems. Obsessing over statistics has mostly been the handiwork of scheming interventionists, as well as, knowledge pretenders in pursuit of the social desirability bias