Asking Questions – The similarities between Economics and Fiction

Firstly, I’d like to take a moment to apologise for my lack of blog posts – the main reason is I’ve been inundated with ideas, and they’re big ones, and the thought of starting was terrifying. So, I’ll take a step back, and just write.

This post is inspired in part by 1Q84 by Murakami, but also helps to define why I chose Economics as my subject of study. I don’t think I ever wanted answers to questions back way when, it would frustrate me to no end if I asked an abstract question and was provided with a definite, black and white response. And I never had any desire for knowing specifics, such as years of events occurring (other than their relative position to other events). Abstract questions such as – if we have no evil, can there be any good? Often the response I’ve received is evil is bad, and needs to be controlled and outlawed. There is no discussion, or consideration of the term, or of its position in society and in human existence, just a flat answer. This is not enough for me, I want the question to inspire further questions, I want to see a flowering of thought in the other person, for them to have another look at their world.

In 1Q84, the world has changed. I shan’t say much more than that, other than what The Times wrote about it – “A work of maddening brilliance”. If you like to question, as I do, I would strongly recommend reading it.  Murakami makes some interesting notes about fiction writing in this book, particularly that authors ask questions, they link ideas, they don’t answer but they do inspire. This inspiration provides one with a new viewpoint, a new understanding of their world, and provides them with new potential tools to shape and respond to their reality. What has this to do with Economics? Why, I believe everything. Economics is, in itself, a work of fiction. Sure, it is sourced from statistics, from tested theories, and from in depth research as to the behaviours and reactions of economies and people. However, its source is an ever changing one, being people. They are never the same from day to day, person to person, or even between countries. Generalisations can be made, and the theories that are built are often strong, testable, and usable. Consider this though – throughout the ages, over many differing forms such as religion, philosophy, and scientific thought, we have considered numerous ways to describe and understand human nature, yet still day after day we are surprised by the actions and reactions of others. We cannot understand our behaviour, oftentimes we don’t even understand ourselves, yet we create a form called Economics based on human behaviour to understand the interactions between various systems of people.

Please don’t get me wrong, I don’t think this in anyway demeans or belittles the subject. Rather, I think it highlights what is is that we do with this form of thinking, this form of understanding. A by-product of sentience is a pursuit of understanding, and Economics provides a framework with which to understand the behaviour of systems of people. In its current applied form, a money currency is used as a form of exchange between economic agents and parties for goods and services, but at its very core, Economics is a science of understanding how people achieve their wants and desires with limited resources. Within an economy, for instance, Australia, we use the Australian dollar to buy and sell products and services which will – so we believe – provide us with our wants and needs. We build theories and test through statistics and econometrics what were to happen if different actions are taken, such as Government stimulus, a drop in interest rates, or a new taxation system. We ask a question, and the Economics framework provides us with a method by which to come to an answer (with provisos of course – always remembering ceteris paribus). We apply this framework to historical actions in order to identify ‘ingredients’ as such, which affected the mix and resulted in a different outcome to what we expected – take stagflation for instance. These are tried methods, backed up by swathes of data, that are used to answer questions. But how is this any different to a work of fiction?

A story has characters. An economics system has micro and macro systems. A story has an event occur. An economics system has an event occur. A story follow the unfolding of the event, its effects on characters, and gleans new understandings from the behaviours exhibited – which, I must point out, if these behaviours are too foreign to the reader, then there is no understanding. The characters must be believable, they must stem from their structure on the breadth of human behaviour and characters in place, or at least, an understandable extension of current behaviour. In economic systems, the micro and macro systems must also follow real world behaviour, our current understandings of these systems and their operations, or at the least, an understandable extension of what is currently in place. In economic theory, we follow a story just the same as a fiction. An event occurs, and through the theory we watch the unfolding of the event, the reactions of the systems in place, and we glean new understandings from these behaviours.

Stylistically, they are quite different. Structurally, I don’t think so much. I like to ask questions, so I pursued Economics, a discipline which specialises in setting a scene, and watches events unfold. The results we take with us to apply to the real world, as a tool to help us understand further, and to shape and create our reality. The framework of economics is ever changing, a different subject every decade or so, it flows with the times and the generations, and it changes as behaviour changes, providing new ideas and inspirations as to how we can satisfy our wants and desires, given our limited resources.

Keep wondering readers.

– Rhiannon.