Well…I don’t know what most of the labels in this article mean. Perhaps if I’d enjoyed the third Matrix movie, I’d understand it more. That aside, what you said about technocrats and their models of reality reminded me of another group of technocrats with far greater reach and impact than Musk or Zuckerberg — academic economists. Remember after the housing crash when Fed Chairman Bernanke admitted to Congress that their model failed? Bernanke, who had just a year or two before had stated that the mortgage problem would be contained. That must have been one of the toughest days of his career. So, what did Congress do? It basically told the Federal Reserve to fix the problem that they didn’t properly see coming. So, they kept interest rates at zero and bought a crap-ton of mortgage-backed securities and government bonds for the next few years and called it “Quantitative Easing.” The stock market sure liked it, but it has also come at the cost of record income inequality, windfall profits for large banks and super-wealthy entrepreneurs, and poor returns for retirees on fixed incomes.
Where did they come up with this idea? Academic economists who have the mistaken belief that humans are rational actors whose actions can be modeled in great detail. They see economics as akin to theoretical physics and believe if they could just measure and model with a bit more statistical precision, they could craft an economic policy to achieve a desired outcome. People and businesses aren’t x’s and y’s to be plugged into equations, though. When the Fed does something, people adjust their actions in ways that are not always intuitive. Their models are wrong from the first time step. The error may not be apparent for a long time, but the longer it takes to appear, the worse the outcome because by then, a large part of the market has dislocated and capital has gone into places from which it may not return. I think the real risk out there that’s greater than anything Trump or alt-right technocrats could do is the next economic crisis that was created several years ago by the other technocrats working quietly in the background.
