Exactly…I’m not sure who’s worse at forecasting…economists or meteorologists…

You don’t have to go beyond things like the Black-Scholes model for options pricing to see how soft a science economy really is, the thing gets even worse when looking over the whole hedging theory. For some reason economist seem to disregard facts in favor of their fancy partial differential equations no matter how far off the theoretical models are from the hard and cold data.

But hey, as long as the hedge fund managers keep making their millions it does not matter that the vast majority of hedgefunds barely keep pace with the performance of the S&P500.

“The problem is not that economists are unreasonable people, it’s that they’re evil people,” he said. “They work in a different moral universe. The burden of proof is on someone who wants to include” a transaction in the marketplace. (Mr. Roth, who acknowledges that “economists see very few tradeoffs as completely taboo,” did not take the criticism personally.)

The article is about our shared human morality and its intersection with the amoral marketplace. Note that I don’t call the marketplace “amoral” pejoratively. The market is by definition an amoral place, and we should remember that. The market model has no values of its own beyond what we as humans inject. (A lot of our human morality regulates the marketplace The crux of the article examines how it’s illegal to sell human organs because of moral repugnance to the concept.)

The article explains this thusly:

Mr. Roth spoke at a recent panel on the economics of repugnance at the American Enterprise Institute, a conservative research organization in Washington. For conservatives the issue can be particularly pointed. Economic conservatives tend to favor eliminating as many hindrances on the market as possible, while social conservatives believe some practices are so “repugnant” — because they violate traditional values or religious and moral prohibitions — that they should be banned from the marketplace altogether.

As you can see, it’s the Randians vs. the Christians. (Karl Rove’s greatest triumph was to convince these two groups that they were working together toward a common purpose, when in fact they are at extreme odds.)

But the real question is how we balance our shared humanity and our desire to help one another with a market model that is, for all practical purposes, at odds with that humanity. Randians would argue that the market IS moral based on a set of tortured logical fallacies in order to avoid thinking about it at all. But those of us in the real understand that this is a balancing act.

The amorality of the marketplace is essential to entrepreneurship, economic growth, the expansion of the state, and the building of individual wealth. At the same time, the marketplace’s profit-before-all model creates incentives for it to provide unsafe conditions for its workers, pollute residential neighborhoods, release unsafe products into the market, etc., etc. We also need to understand that when human being compete with one another for money, they are often compelled to cheat, and the marketplace encourages this kind of amorality by its nature.