Friday, February 27, 2009

Cosmologists Should Study the Stars, Not Economics

I am taking a class on cosmology and am forced to read a pretty poorly written book – The View From the Center of the Universe: Discovering Our Extraordinary Place in the Cosmos

From the very beginning the authors have been setting up an argument that something was missing in the human consciousness and that a new cosmology would lead us to some enlightenment.

I’ve been kinda dreading when they were going to get to their point – what the new cosmology would look like.  I haven’t quite gotten their yet, but it is crystal clear what form it is going to take as they have just compared gravity to wealth.

Gravity slowly magnifies subtle differences in the expanding universe.  Denser regions expand more slowly, and less dense regions more rapidly, than average.  Gravity always makes the rich regions of the universe comparatively richer and the poor regions poorer, and thus gravity is the Ultimate Scrooge Principle.

Wealth left to its own devices in some ways works like gravity: the rich tend to get richer and more powerful. 

Sigh.  How often must this misguided view be debunked?  It is demonstrably false, one of the foundations of economics – and arguably one of the few things that nearly all economists would agree on is this simple fact.  Trade makes everyone better off.  Or stated another way: the creation of wealth makes everyone wealthier.

I challenge anyone to find a case where the poor get poorer when wealth is left to its own devices – it takes government to reverse the progress of humanity (and they do it well).  Take government out of the picture, and only a little, and you get the massive creation of wealth such as we have seen in South Korea, Taiwan, Ireland and Eastern Europe.  Even more recently you have the incredible improvement in the lives of Indians and Chinese.

At the very least I wish that people that don’t actually know anything about economics would at least keep quiet on the subject.  The spreading of trite anti-progress metaphors simple makes it easy for the ignorant to spread their ignorance.

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