Paul Krugman and the uselessness of Economics

Most Economics students around the world go to their classes carrying the book “Macroeconomics” by Paul Krugman in order to learn the way countries behave economically. The fluorescent yellow cover of the book shines proudly in a strategic part of my shelf in order to remind me the success of having graduated in Economics. It is the book, with capital B.

Krugman considers himself a social democrat in european terms (liberal in american terms) and Keynesian, which means he supports the state intervention in the economic system, the opposite of being neo-liberal. He was the hero of many students including me, until he committed a huge mistake few years ago: He forecasted something.

Economists analyze history, create economic policies to solve difficult situations and try very hard to increase the welfare and happiness of the people. But they are unable to predict the economic situation in the future. If they gave it a shot, the margin of error would be so huge that the forecast would be useless. However, the world is so desperate to know about the future that they prefer to surrender blindly and grab anything that has a tiny chance of becoming true.

Paul Krugman slipped in 2012 predicting the exit of Greece from the Euro Area within one month. His forecast became so widespread that it affected deeply Greece’s credibility and therefore its economic situation. Unfortunately I haven’t found anybody influential enough asking for explanations for such unfortunate article.

Some people are still asking how can it be possible that no economist was able to predict the actual financial crisis. Economics, my friends, are a desperate attempt of understanding something so complex that goes beyond our understanding. In the past we thought we could rely on the security that numbers and maths give us in order to create some theories, but even Krugman gave up in 2009: “The economics profession went astray because economists, as a group, mistook beauty, clad in impressive-looking mathematics, for truth”.

Myriads of articles and books will be written cramming the shelfs of the bookstores, meanwhile the economic system gets more complex over time, making impossible for the shared knowledge to catch up with the real world. Students from all over the world are tearing up the already out-dated syllabus as a protest against the uselessness of this so-called science. What the rest should do is to just sit down and watch. To enjoy the economic booms and to not get upset in the 7 economic crisis we will probably have to face in the next 70 years.

Berlin: The review

Being gay and deaf has always put me in a specific place in the society where it constantly reminds me that I am different. Berlin allows me to be just one more among the many. Not even the Ethiopian asylum seeker married with a Muslim Vietnamese woman would stand out in this city. People’s appearance or life story has no value whatsoever. What matters is the now, your current contribution to the city.

The capital is going through the same process as London and New York did, evolving towards radical cosmopolitanism. But unlike Londoners or New Yorkers, who liked to brag about it, Berliners are not pleased. And they are doing their best to stop it before they find themselves not being able to cope with the cultural change.

The lack of flexibility of some Germans is a well-known stereotype, their inability to deal with unexpected events, their need to structure, plan, and create rules in order to have full control is not compatible with a modern intercultural World-class capital. Unfortunately, to make Berlin an enriching exchange point where the metallic German culture blends with the chaotic Mediterranean/Vietnamese ones is only something we can dream of.

In this utopic attempt of covering all the unforeseen accidents, Berlin has been provided with exceptional German social benefits. Whoever earns less than 750 euros; Germany will take care of his rent, food, health and work. This influenced heavily on its culture, making Berlin the best city in the World where to fail.

Taking risks in Berlin is a safe bet, namely with art, with tech start-ups or with clubs that open from friday night to monday morning, all of them being the main elements that shape Berlin’s brand. On the other hand, professional ambition is non-existent, and only few people think of building a professional career as a life goal. The intrinsic life experience of Berlin is more linked to social relationships, sexual freedom and drugs, than to work. Therefore, the choice that most Berliners face is, to reluctantly work for a living, or to experiment and try to survive.

It is undoubtedly a social laboratory that has no equivalent anywhere in the world, beautiful to watch at, but it is not yet the flawless world-capital many people expect it to be.