Too many cooks

2009 Jan 06

Too many cooks
Or what do economists really understand?

I have been plodding my way through reading Balancing Acts - Technology, Finance and the American Future, an analysis of the economic turmoil of the 1970s and 1980s by James K. Galbraith (1989).

This covers the trials and tribulations of economists, financial experts and governmental policy makers on all matters such as:

• Economic growth
• Recession
• Unemployment
• Inflation
• Deficits
• Interest rates
• Money supply
• Labour supply
• The value of the Dollar
• Exchange rates
• Trade deficits
• Balance of payments
• Oil prices
• Oil supply
• Gold prices
• Commodity prices
• Price and wage control
• Military spending
• Social spending
• Consumer spending
• Health care
• Old Age Security

Reading the ups and downs, arguments and counter arguments makes you wonder what do we really understand? This is all too much like the story of "Too many cooks spoil the broth".

The pot boiled over and ruined the soup. Who's to blame?

• There was too much water - too little water
• The pot was too big - too small
• The pot was too deep - too shallow
• The lid should have been on - the lid should have been off
• Too many people were stirring - not enough stirring
• Too much salt - too little salt
• Too many cooks
• No one was watching the pot

This is not an observation of there being too many cooks but one of no one knows what is going on. No one seems to have the right answer. So what do economists really understand? Which leaves me to think, economics got us into this mess. Can we expect economics to get us out of the mess? Maybe it is time for a new model.

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© 2008 Kenrick Chin

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2008.04.04 - Updated 2008.05.15