What Is Evidentiary Economics?
by Dr. Doug Cardell
What is evidentiary economics? Economics is the study of how we choose to allocate our resources. Every living thing must make economic decisions. Fundamentally, it is about survival. If an organism burns more calories looking for food than it gains in calories from the food it finds, it dies. Economics is a quest for the most efficient use of resources. Evidentiary economics approaches this problem by looking for evidence of what works best. While that may seem obvious, many so-called economic discussions revolve around what some wish the most efficient practices were rather than examining the evidence to substantiate their beliefs. Evidentiary economics examines the evidence to discover methods that maximize benefit and minimize cost. This approach applies to the individual, local and national choices. Evidentiary economics differs from philosophical economics. The John Lennon song, Imagine, might best characterize philosophical economics. Lennon, as talented as he was, had not studied economics. The song's title explains his point of view; he imagines a world that does not exist. Is Lennon's imaginary world better than this one? Who knows, but proposed economic solutions designed for a mythical world cannot help us become more efficient in using resources in the real world. Evidentiary economics begins with the premise that human beings, like all organisms, are motivated to a great extent by self-interest. Of course, it's OK to Imagine that we were otherwise and dream utopian dreams, but people are people, and thousands of years of human history are evidence of this. The Greek philosopher, Plato, writing 2500 years ago, may have been the first to employ philosophical economics. Plato thought philosopher-kings, controlling collectively owned property, would be the ideal form of economics and government. However, almost immediately after Plato proposed it, his pupil, Aristotle, usually credited as the originator of formal logic, was one of the first to point out that Plato's collectivist ideas failed on logical grounds. But, unfortunately, that hasn't stopped people from trying and repeatedly failing to find a way to make it work. Some of the first European settlers in North America were the pilgrims who came over on the Mayflower to settle in Plymouth. They began their settlement as a collectivist enterprise, but as all collectivist schemes attempted before or since, it failed. The colony Governor William Bradford wrote in his journal, "Community of property was found to breed much confusion and discontent, and retard much employment which would have been to the general benefit." He continues, "For young men who were most able and fit for service objected to being forced to spend their time and strength working for other men's wives and children, without any recompense. The strong man or the resourceful man had no more share of food, clothes, etc., than the weak man who was not able to do a quarter the other could. This was thought injustice." Also, "The aged and graver men, who were ranked and equalized in labor, food, clothes, etc., with the humbler and younger ones, thought it some indignity and disrespect to them." Furthermore, "As for men's wives who were obliged to do service for other men, such as cooking, washing their clothes, etc., they considered it a kind of slavery, and many husbands would not brook it." The pilgrims had to abandon collectivism to avoid starvation. Then, after reintroducing private ownership and labor, they succeeded. Most current collectivist plans derive from the work of Karl Marx. Marx believed that all value came from the labor invested in creating it. The evidence indicates that value accrues from those who want the product of that labor. That is, consumers and only consumers can set fair value. See my article "What Is It Worth?" for a more detailed explanation. Evidentiary economics assumes that economic decisions must depend on how people behave rather than how we wish they would. Economic systems must allow human self-interest to advance the common good by allowing competition to get the best from everyone. Whether we like it or not, it's human nature.
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