When I was in college, and beginning to despair about the fact that I was too lazy to do the work necessary to get into the College of Engineering, much less get a degree, I took some economics courses, toward what would become a strange liberal arts degree, a Bachelor of Science in Social Science. I can address at a different time whether I was actually lazy, or just in the wrong field at the time. Right now, I want to concentrate on the economics courses.

As is the case many places, the intro econ courses were divided into two parts: microeconomics and macroeconomics. I took the micro first, as is most common. Microeconomics takes the view of an individual household or business, and looks at what effects market forces have on it. Businesses and consumers work together to create a supply/demand curve that more or less determines the best price for any item. We discussed what shifts the curve up and down, what makes it steeper or flatter, what a monopoly looks like, and how close substitutes can affect the curve.

There was a lot of complexity to a simple idea, and there was also discussion about when a business is worth keeping afloat and when it isn’t – how fixed and variable costs all work into the mix. But, despite that complexity, it was all mathematical, and you could work it all out. It was uncontroversial. Liberals and conservatives have no fundamental differences on how to run a small business.

The reason for this is one small assumption – that neither the action of a single household nor the action of a single business can affect the economy at large. This assumption excludes some large businesses, that have to be considered under macro, but it’s extremely useful. It’s akin to predicting the trajectory of a projectile near Earth without considering its effect on the Earth. A cannonball, in its arc, will attract the Earth, and actually pull it a tiny bit closer – but there is no way to measure such a small effect, and it may be balanced out by other cannonballs elsewhere on Earth, anyway. You can predict the trajectory as if the Earth were immovable, and exerted a constant, unidirectional force on the cannonball.

The relationship between a business or household and “the market” is similar. The market may change over time, but the actions of a single entity are assumed not to have much of an effect. This means that you can judge the outcome of a business decision based solely on where the business is heading, and what the market is doing. The business’s actions will not turn around and change the market, and this greatly simplifies things.

So, why do people talk about economics as if it’s unscientific? Why do they say that, whenever you gather three economists, you get at least four opinions? I didn’t know until I took macroeconomics. I left micro feeling pretty good about things. Even now, years later, I feel like I could regain everything I forgot about that course within a few days. I never, for a moment, had the same feeling of confidence about macroeconomics.

The essential difference is that you are now dealing with governments and large businesses, who have enough clout to actually change the market on their own. Now, instead of launching a cannonball near the earth, it’s more like launching a large asteroid, or even the Moon. Both bodies noticeably affect each other, and things become much more complicated.

I’m reminded of some experiments Douglas Hofstaedter did with video feedback – first back in the 1980’s, illustrated in his book Goedel, Escher, Bach: An Eternal Golden Braid; and then much more recently, with much better equipment, in I Am A Strange Loop. He basically aimed a video camera at the monitor it was hooked to, and watched what happened. I didn’t find any links to it that looked sufficiently permanent, so I’ll leave you to Google them yourself if you want to see some results. Mr. Hofstaedter was making a larger point about self reference and feedback as a basis for thought, but I think I can take a simpler point from it: when a model refers to itself, strange and unpredictable things can happen.

This strange and unpredictable behavior, counterintuitive to the point of almost seeming like magic, is why so many economic theories can stand, internally consistent, with rules that make sense, each claiming to represent the actual economy on some level or another. Just change a few variables, tweak a few parameters, and you can change the entire nature of your model.

All this is why I have so little patience with arguments like “You can’t spend your way out of debt” or “You can’t reduce the deficit by cutting taxes.” Both of these arguments, presented just as they are, are microeconomic arguments applied to the macro economy. In fact, I’ve seen microeconomic analogies (“My bank would laugh me right out of the building!”) used to support both of these proposals, and many similar ones.

When a hurricane’s path is predicted, several completely separate computer models are consulted. Forecasters don’t feel like they have a solid prediction until most of those models agree. I’m starting to think that economic forecasts and policy should be set like that. My impression is that too many people’s sense of the economy is more akin to the old man who predicts the weather by how the corns on his feet are feeling. He may be right a lot, but would you stake your life on it?

I would suggest we do the same thing with our most predictive economic models, except that I don’t think most of our dialogue centers around things that our models could possibly cover. The weather models we use to predict the path of a hurricane are based on very complex interactions, but they are set under conditions that have happened before.

The economics that most pundits are talking about aren’t in the realm of the familiar. The pundits want to take us in whole new directions, and hold fast to the belief that the only reason their points of view have not been proved conclusively is simply because there has not been a real trial. The market has never truly been free. Socialism, in its true spirit, has never been tried. The government has never been big enough or small enough to test everything out.

I’m not ready to suggest a way out of this mess. I don’t know if I ever will be. But I am convinced that the mess has nothing to do with anybody’s inability to see simple reason. The economy is more complicated than common sense, and common sense approaches to the economy may well be as dangerous as any of the 20^th century’s vast social experiments, performed by others who were dead sure they knew the answers.