Friday, March 14, 2008

Reality Strikes

Sir Francis Bacon said "Nature, to be commanded, must be obeyed." Anyone who has tried to fight gravity or refuses to believe in electricity during a thunderstorm probably understands this principle. This statement is a concise summary of man's relationship to reality. It is also implies something metaphysical. It implies that the world is what it is and that we can not change it despite our wishes or hopes.

Generally speaking most physical scientists would accept the philosophical implications of this statement at face value and this principle is the bedrock foundation of their work and outlook on life. When we study rocks and molecules we all seem to agree that the scientific method is valid. We observe that there are laws of nature which result in the same cause having the same effect. Therefore, we can form theories and deduce the consequences of certain principles. If we have done the science right then our predictions will be accurate. If our theories are wrong it is self-evident and we must modify or augment our theories to take into account new knowledge. The scientific method has revolutionized the world and brought about untold prosperity to billions of people. Is there any doubt that this method works brilliantly?

So, if the scientific method works wonderfully when we apply it to nature why wouldn't we apply the same method to understanding man and his interaction with the world? In other words, should we use the scientific method in the social sciences? Judging by the wholesale ignorance of modern economists and the inane absurdity of modern philosophy, apparently, the answer must be a resounding no.

Could you imagine a biologist saying that man might be made of jello or a chemist saying that wood is made out of ham sandwiches? But, if a modern economist says that the Federal Reserve needs to inflate the money supply to achieve economic prosperity it is accepted. If a political scientist claims that appeasing the Muslims this time will lead them to respect us it is considered reasonable. If Hillary Clinton says that raising taxes and increasing government spending on welfare projects will lead to prosperity it is deemed credible. Apparently, in the social sciences unlike in physical reality, anything is possible.

Unfortunately, this is not true, and occasionally, reality has a way of reminding us that Sir Bacon's statement applies to us as well. You see, goods must be produced and people must work to perform a service (although I would never be so audacious to make this claim in front of the esteemed social scientists). If you create little green pieces of paper it does not make goods fall from the sky. However, it does have the effect of destroying the value of actual goods in terms of those little pieces of paper. It also causes people who must pay their taxes and transact business with those pieces of paper to invest in things that they think are going up in value in terms of the paper. If the things are really not valuable in terms of other things and the pieces of paper suddenly decrease in supply then your thing is called a bad investment or a house.

Creating more pieces of paper will not create more goods. Stealing the paper from people through taxes will not help create more goods. Forcing someone to give his paper to another person or another country will not create more goods. Borrowing pieces of paper from people and spending it on non-productive activities will not create more goods. Creating impediments to people creating goods will not help to create more goods. Punishing those who work hard will not get them to work harder to produce more goods. Restricting other countries from importing their goods will not result in more goods.

As the stock market plummets, as gold and commodity prices spiral upward, as the dollar loses its value against world currencies, and as the government continues to print more money then tax or borrow it in order to waste it on asinine programs while simultaneously creating every possible regulation and impediment to production - we should be reminded, that reality applies to humans too.

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