Government's Favorite Lie

I’ve spent a huge portion of my life arguing in message boards, internet forums, classrooms, and academic papers.  I’ve studied a wide range of subjects and I’ve had the pleasure of debating some very sharp cookies over the years in almost all of those subjects.   Just now, I’ve come to realize a certain recurring theme that underlies all of the lies and arguments being put forth by the backers of legalized coercion and theft.

How all great statist lies are justified:

Our theoretical model explains exactly why “X” happened and you should believe us because we have issued pieces of paper amongst ourselves proving that we are smarter than you are.

This is a form of a logical fallacy that needs to be smacked down for the crap it is.  Theories don’t prove anything.  Laws are something that we observe to be true over and over again without fail.  Laws are statements of truth that can not be invalidated.  Theories are not laws.

The statement, “our theory can account for what is observed,” does not address the fact that perhaps many other theories can also account for what is observed.  Occam’s Razor is generally accepted as the way to weed out the bad from the good, yet this is almost never applied in practice.  It also does not address the underlying ties a valid theory must have to physical reality.  Reality is the ultimate truth and therefore all theories must be grounded in reality.

For example, I could say, “I propose thunderstorms are caused by Zeus hurling lightning bolts from an invisible alternate dimension.”   This theory accounts for everything that is observed, and one could not refute it since one can not travel to alternate dimensions.  I can postulate the existence of Zeus and alternate dimensions and they can’t be refuted. . Scientists would rightly claim that the theory is utter garbage because it has no fundamental ties to reality other than the observable effects of lightning (which, by the way, modern science still can’t fully explain.)

So let us look at some various examples of statist theories that lack ties to fundamental reality:

Black Holes – we can’t see them, directly detect them, or create them in a lab.  They, much like Zeus, can be postulated to exist yet there is no way to refute their existence.  Such an object is fundamentally disconnected from reality.  Could black holes exist?  I suppose black holes could exist in the same way Zeus could exist.

Keynesian economics models – I find these to be particularly insidious.  A recent article in Reason magazine talks about Keynesian models of stimulus spending, concluding that:

[T]hose reports rely on assumption-packed models that effectively predetermine their outcomes; what they say, in essence, is that the stimulus worked because we assume it did. …That’s especially true when estimating government spending’s productive effects, which is accomplished by plugging numbers into a formula that assumes that government spending produces a multiplier—an increased return for every government dollar spent. In other words, it extrapolates from how much money is put in rather than from what has actually come out. And it does so using a formula that dictates that if money is put in, even more money will come out. According to the CBO’s estimates, depending on how the money is spent, one dollar of government spending can produce total economic activity of up to $2.50. What a deal! …[F]or all practical purposes, the same multipliers that were used to predict how many jobs would be created are being used to estimate how many jobs have been created.

This, of course, is totally disconnected from the reality of how economies actually work.  Indeed all of Keynesian economics is ultimately disconnected from reality because macro and micro economics are not unified under a coherent structure.  Remarkably, we find the same to be true of Special and General Relativity – macro and micro are not unified and require two entirely distinct theories to cover all the bases.  Any time we see theories that are separated between micro and macro effects, we will find statist liars at work.