The "Strong Tendencies" of Economics?
We live in an orderly physical universe governed by unyielding, unforgiving non-negotiables like Newton’s universal law of gravitation and mathematical regularities like pi and e. Virtually no one denies this, and doing so will rightly get you labeled a kook.
We also live in an orderly social universe governed by unyielding, unforgiving principles like the law of demand and regularities like the tendency for rates of return to eventually equalize. While denying physical law will justly get you labeled crazy, affirming the existence of economic law often meets with derision. Many people routinely deny the existence of economic law, either outright or implicitly through other beliefs they hold. When protesters march, holding signs that scream “People Over Profits," their actions proclaim the belief that economics is little more than an ideological fig leaf for the wealthy.
It’s not.
The ancestors to modern economics, the Late Spanish Scholastics at Spain’s University of Salamanca had a hunch that God did not set “the moon and stars to rule over the night,” only to leave the social world a chaotic mess. They were right. These fifteenth and sixteenth-century disciples of the medieval theologian Thomas Aquinas saw no tension between economics and Christian theology. In penning some of the first economics treatises, these thinkers sought to understand God’s mind and magnify him. This holy motivation led many medieval thinkers’ eyes to the heavens. It led certain of the Spanish Scholastics’ eyes to our lives on earth.
The apostle Paul contrasts the Christian cosmos with its pagan antonym chaos. There is no natural science in a chaos: you can’t discover, understand, arrange, and apply creation’s governing principles if there aren’t any. The same goes for social science. Economic laws are universally applicable and discoverable by the human mind. We can’t say “a 10% increase in the minimum wage causes a 5% reduction in low-skill employment” with the kind of precision with which we can say “water boils at 100 degrees celsius.”
Still, we are so confident in the direction of the relationship between price and quantity that we refer to the laws (not “strong tendencies”) of supply and demand. Are there exceptions? Only apparently, not in reality. Water’s boiling point depends on its altitude: it boils at a lower temperature in Denver than it does in Daytona Beach. A binding minimum wage doesn’t always cause unemployment, but it does always cause adjustment, and these adjustments make workers worse off.
Learning economic law is about more than satisfying our innate curiosity about how the world works. Ultimately, mere economics allows us to understand which rules and which policies promote human flourishing, and which don’t.