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September 1996
Volume 14, Number 9

Two Errors, One Truth
Llewellyn H. Rockwell, Jr.

In a state-funded education system, bad ideas live longer than they would in a free market. That's the best explanation for the staying power of the two opposing errors of our time: nihilism and pseudo-omniscience in the social sciences.

Nihilism comes in the form of postmodernism, a pretentious body of academic blather that has invaded almost all academic fields over the last 15 years. Students despise it and good faculty fear it, while tuition-paying parents know virtually nothing about it.

Yet year after year, postmodernism grows like a cancer, even within economics. Its ranks swell with careerists anxious for tenure, promotions, and financial stability at taxpayer expense. If you trounce traditional logic and values hard enough, and cast your argument in stupefying complexities tinged with leftist politics, you'll eventually win the respect of your colleagues.

In class after class, the postmodern message is the same: what we call truth is wholly subjective, what we call science is merely the momentary professional consensus, and what we call reality is a fiction made up to sooth our psychological need for order in the universe.

Postmodern politics are egalitarian socialist, and its exponents are not embarrassed by this fact. But hasn't socialism failed in reality? Sure. But the question implies we can learn something from reality or that it exists at all, propositions which postmodernists are inclined to deny.

Murray N. Rothbard snowed on their picnic several years ago in a rousing article called "The Hermeneutical Invasion of Philosophy and Economics." These people deserve "scorn and dismissal," he said. "Unfortunately, they do not often receive such treatment in a world in which all too many intellectuals seem to have lost their built-in ability to detect pretentious claptrap."

The problem is that postmodernists are moving targets and thus immune from refutation. For example, no postmodernist admits to being a relativist. To them, all critics have misunderstood them, all negative reviewers have misread the text, and all opponents are blinded by ill-will. Nothing is certain, they say, except that they are right and everyone else is wrong.

How to deal with them? If refutations don't work, there's always the gibe. For instance, Schopenhauer once called Hegel "a flat-headed, insipid, nauseating, illiterate charlatan, who reached the pinnacle of audacity in scribbling together and dishing up the craziest mystifying nonsense." But his comment did nothing to keep the Hegelians at bay.

What, then, to do? In a stroke of genius, a physicist named Alan Sokal at New York University wrote a parody of a postmodern treatise. He strung together the nuttiest quotations from the postmodern pantheon, sauntering from quantum physics to feminism to the evils of capitalism, and concluding that "physical 'reality' is at bottom a social and linguistic construct."

Sokal then dressed his masterpiece up in voluminous footnotes, goofy words not found in any dictionary, and vagaries about "flux" and "interconnectedness." The result was "Transgressing the Boundaries: Toward a Transformative Hermeneutics of Quantum Gravity."

Sokal sent his manuscript to a prestigious journal called Social Text, the flagship of postmodernism. Seven editors evaluated it, and insisted it be featured in their next issue. When it was, Sokal revealed the hoax in Lingua Franca, and became an overnight sensation.

The Social Text editors cried fraud, failing to realize that Sokal had not committed it, but exposed it. Editor Andrew Ross told Katha Pollitt of The Nation that Sokal might have written his article seriously, and only now claimed it as a parody. But fed-up students and academics the world over cheered Sokal in the academic equivalent of a ticker-tape parade.

Sadly, however, we're not done with postmodernism. So long as intellectuals find this nonsense profitable, and have captive audiences for their destructive message, and logic is denounced as reactionary, it will, like socialism itself, persist.

So it is with the second great error of our time, a special problem within economics: mathematical witchdoctors who claim to be able to predict the future. In Congress, this error shows up the form of budget projections and productivity estimates. Practitioners show off their supercomputers the way Olympic weightlifters flex their muscles, and then fudge the numbers until the politicians are pleased.

But all forecasting from government is notoriously incorrect. As Rothbard noted, governments "seem to have great difficulties in forecasting their own spending, much less their own incomes, let alone the incomes or spending of any else." The result of government economic forecasting is a history of hilarious blunders and errors, which somehow don't deter D.C. palm-readers.

In academia, the problem is more complex. Beginning in the 1950s, positivists threw out the idea that economics follows a logic of cause and effect. In the old days, for example, everyone knew that rent controls would lead to a housing shortage. Under positivism, however, this proposition has to be "tested" by correlating historical data, thus making all claims subject to endless revision.

"Science is prediction," said the motto of the econometric society, but no one said the prediction had to be right. They hardly ever are. Economics deals with real people who act and choose in ways that can never be known in advance. If economists could really predict the future, they wouldn't be teaching classes; they'd be making billions in stock futures.

Denying economic law can have horrible political consequences. When two left-wing economists recently said that raising the minimum wage can cause overall wages to rise, they should have been ignored. The minimum wage is a price floor; it will always price some people out of the employment market. But with positivism, every claim based on "data," real or imagined, must be taken seriously.

This preposterous study was then trotted out to show that at least some economists think the minimum wage is great. But we can't really say either way. We have to run the experiment on the nation at large. And so Congress did: it raised the minimum wage.

The way to beat back statism masquerading as mathematical science is not with supercomputers showing that free markets will produce better results. That's the game the left would like us to play. Everything is then reduced to our word against theirs, our assumptions versus theirs, and the politicians arbitrate the difference.

Ludwig von Mises exposed the errors inherent in the pseudo-science of economic forecasting. Computers cannot predict the future, any more than horoscopes and Tarot cards. What we know about what tomorrow will look like is based on what we know about cause and effect generally.

If the government adopts measures that intrude into the economy, we will be poorer. Showing this truth through logic and example makes a more powerful case than an econometric program that fails more often than its succeeds. This strategy also has the natural advantage of being hard-nosed, honest, and true.

The two great errors of our age are mirror images: that we can know nothing about reality (postmodernism) and that we everything about reality (positivist forecasting). The one great truth is that society is constrained by unchangeable and universal laws of cause and effect. Knowing those laws and applying them is the essence of economics.

American intellectual life has been poisoned but by academics who deny this. But for once we can take comfort in a version of Keynes's one accurate prediction: in the long run, they'll all retire.

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Llewellyn H. Rockwell, Jr. is president and founder of the Ludwig von Mises Institute

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