An Essay On Experience As A Teacher or “Life Is A Dear School”
While we face many serious issues in the Commonwealth, I propose that a little levity never hurt anyone and would like to share a few of my observations – most learned the “hard way” in the great university of life. Many people ask economists to advise them as to what the future may bring – at least in terms of the economy.
One of the things I have learned is that economic forecasting is very difficult especially if its about the future. For this reason, he who attempts to earn a living by a crystal ball should also learn to eat ground glass. When it is necessary to examine various economic data within a series of statistical tables and one searches for a decision as to which data to first evaluate – the decision is often like trying to determine which side of a slice of bread to butter – it doesn't matter. What ever is selected the whole thing will be like the “Generalized Iceberg Theorem” which states, “seven eighths of everything can’t be seen – no matter how hard you try.” It is an economic truism that each problem solved introduces new unsolved problems – which by their very nature – keep economists employed. Returning to the matter of “buttered bread” mentioned earlier, the story is told about the man whose bread fell and landed buttered side up. He ran straight away to an economist friend and reported this deviance from one of the basic laws of the universe which holds that the bread should have fallen buttered side down on an expensive carpet and, after much discussion, finally convinced his friend that it had actually happened. After weeks of pondering this strange event the economist reasoned that the bread must have been buttered on the wrong side. Now a word about the term “average” which economist frequently use. It is similar to the following definition: “when you stand with your feet in a bucket of ice water with your head placed in a lighted oven – on the ‘average’ you feel fine.”
With respect to our frequent use of “assumptions” I am reminded of “Burn’s Law” which states, “ If assumptions are wrong, the conclusions aren’t likely to be very good.” This principle refers to the late comedian Robert Burns and his method for weighing hogs. He obtained a perfectly symmetrical plank and balanced it across a sawhorse. He would place the hog on one end of the plank and begin piling rocks on the other end until the plank was perfectly balanced. At this point he would guess the weight of the rocks. Economists sometimes use a similar line of reasoning.
It is a bit like the application of the “Rule of Accuracy” which states, “when working toward the solution of a problem, it is helpful if you know the answer providing, of course, you know there is a problem.” As for “estimates” none are ever complete failures since they can always be used as bad examples. After long years of meticulous study my own observation is “any theory can be made to fit any facts by means of appropriate additional assumptions.” This is because some matters are of such gravity that they must be considered in relation to all the relevant factors involved. If an examination of these factors should show it to be desirable to take one course rather than the other, then it would perhaps be best to do so. If, on the other hand, such examination shows the better wisdom to lie in some other course, then it is possible that the other course would have to be followed. It should be one’s intention to study all pertinent factors before determining whether it should be one course, or the other, which should be followed and if at first you don’t succeed, just transform the data set and hope the reader will remember that to err is human but to really foul up requires a computer. Returning to the subject of forecasting, or methods to divine the future, there is an interesting story about a prophet in Tokyo who, in 1936, was asked to predict what would be happening to the people of his city in five, ten and twenty years time. He began: “I prophetize that in 5 years time, in 1941, Japan’s influence will extend from the Aleutian Islands Islands in the north around the globe to Thailand.” His audience said: “Ah, then you think that Japan will be in very good shape in ten years time”. “No”, replied the prophet, ”my guess is that in ten years time the nation will be confined solely to the home islands, there will be no overseas colonies and most of our cities will have to be rebuilt, and money will be so tight that few Japanese will be able to afford an automobile.”
“So you think we face a very difficult and harsh future in 20 years time.” “No – by the 1970’s I prophetize that most Japanese families will own a car, real income will be ten times greater than it is now and that several years before that year 90 percent of all Japanese will sit looking at a box in the corner of their room which will show live pictures of a man walking on the moon.” He was locked him up as a madman, of course. I hope it doesn’t happen to me.