I have been thinking about complex ideas and simple minds.
Take economic theory. I don’t pretend to have anything approaching a clear understanding (there – I admitted it). And I suspect that there are only a handful of people in the world that really “get it”. So I am amused when a newscaster comments on economic conditions and with a straight face and apparent wisdom sums it all up by mentioning the law of supply and demand.
This would only be mildly amusing except that most people are familiar with this concept and as a result you can almost feel the collective nodding of heads. We are all satisfied that this terribly complex (and therefore frightening) economy thing can be explained so succinctly.
It is magical. The media need only to comment on a drought in South America and the price of instant coffee sky rockets. Sagely, the TV commentator combines the words “war”, “uprising”, “middle” and “east” in an incantation that adds ten more cents at that pump. Just the thought that there may not be enough of something – that we didn’t know we wanted – can create a buying frenzy. Remember Tickle Me Elmo?
When I was very young I was introduced to the idea of gold as a mystical talisman. The lesson came from a friend of my father, a man of questionable reputation. He was, as they say, a player. My parents alternated between dismay at his behaviour and envy of his sophistication. He carried a solid gold bar in his pocket. He displayed it as proof of his wealth and importance. Even to a child it was evident, from its colour and warmth, that it had qualities not found in paper money. Surely if you could carry such a thing, carelessly on your person, no harm could come to you.
Much later I would hear people say, with great sincerity, buy gold as protection from the randomness of the economy. People say that gold is a safe haven. People say that gold never loses its value. Stories are told of those who prospered during the depression because they had gold. So – does gold have intrinsic value? It seems from my five-minute research on the Internet that the answer is no. The price of gold reflects in part a somewhat mystical belief that gold provides protection from economic downturns.
Magical, mystical – when our ancestors feared thunder they invented gods and rituals to deal with the chaos of nature. We fear economic conditions and invent godlike prophets, truisms and yes, rituals to protect us. Me – I keep doing the same thing hoping for a new result (which some say is the very definition of insanity). I keep throwing my coins into the wishing well of mutual funds and looking for good fortune, not by finding a four-leaf clover but by finding the winning lottery ticket.
For those with an interest in how economic theory may not be all it is cracked up to be I invite you to read the blog Economyths by Sam Snyder.