Robert Shiller: Economics and the human instinct for storytelling

Robert Shiller writes about Economics and the human instinct for storytelling.

Why do economists miss the stories behind many of our economic fluctuations? One reason is that economists have a tool kit, and narrative hasn’t traditionally been in it. We view narrative as somebody else’s territory. We do simultaneous equations. We teach general equilibrium theory. That’s fine, but by the time we finish teaching those, we’re tired.

But there is room for economists to do research on narrative economics. We have databases. We can do quantitative analysis. It’s not easy to study the very human phenomena of narratives, but we can collaborate with people in the humanities—people such as literary theorists, who try to understand why some story structures work and others don’t. If we do, and if we make room in our tool kit for narrative, I’m optimistic that in the next 10 or 20 years, we will have a better understanding of economic fluctuations.

Emphasis Mine

Shiller would agree with Scott Adam's assessment that the economy is booming become President Trump inspires small business confidence.

Do narratives drive the economic fundamentals, such as interest rates, rate of return, inflation rate, money supply? Narratives do definitely drive hyperinflation, because narratives are expressions of expectations.

It is also important to know which narratives are dominant. The workers' narratives are drowned out by the Capitalists'.

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Juan Cole: No Normalization: All the Fascist Highlights Trump still Hits

Juan Cole argues for No Normalization: All the Fascist Highlights Trump still Hits.

White grievance is the natural outcome of fascism. If the natural order is racial supremacy, any sign that that supremacy is not being actively performed in all areas of life must be protested. Are we polite to Jews by saying happy holidays instead of Merry Christmas? That is an outrage. Do African-Americans dare protest the governmental scams being run on them by city establishments like Ferguson? That is an outrage.

Not only has Trump not moderated his fascism, but the national media, addicted to ‘on the one hand, on the other hand’ journalism, inevitably normalizes it by bringing on Trumpists to model his fascist discourse for the masses.

The US is being pulled to the far right. Many are resisting, but Trump’s capture of the Republican Party means that he has millions of agents for his planned transformation. Only millions of people actively resisting can offset them.

Emphasis Mine

Back in January 2007, I wrote:

The key trigger to the growth of Fascism is an economic crisis that threatens the Petit-Bourgeois. A combination of economic contraction with foreclosures by banks ignites the movement. That a worker's revolution precedes a Fascist one just means that workers are affected much earlier by an economic collapse than the Bourgeois are.

All the other attributes Dr. Fernandes ascribes to Fascism arise from its intrinsic naure. Racism (p.24) and Nationalism (p.25) are emphasised because they are key results of the Capitalist system. (More of the same to overcome the problem).

The opposition to Enlightenment values (p.25) arises because the Petit-Bourgeois see themselves as doers not thinkers. The abstract notions of free speech, freedom of religious practice, etc. do have any practical effect on their daily lives. They are more seen as restrictions on their activities and an effort to keep them oppressed.

Fascism is then the rebellion of the oppressed small business person against their tormentors. They try to create a new society but end up in the same prison of Capitalism. And, as always, it is the banks and big business who have the last laugh.

Emphasis Mine

In March 2016, I took the view that:

The most plausible scenario for the rise of Fascism in the USA is for Bernie Sanders to win the Presidency. The mild progressive nature of a Sanders administration would be sufficient to collapse the equilibrium of the American system. And in the backlash, another demagogue would arise to unite the forces that Trump awakened.

A new Clinton administration would not do this. Nor would a Trump or Cruz one. For all of these are working within the system. There is no need for Fascists to take back the system.

Emphasis Mine

The danger could well lie ahead.

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