Shakil Ahmed tells us that stories are the true underpinning of our worldviews.
Tales are not just about alternative universes, they are the bedrock of how we understand matters and as such they shape the world around us.
This is entirely true as many have noted over the centuries – it's the basis of all propaganda of course, to make us believe in the one underlying story that then will guide our actions in the direction desired.
Neither Mr. Ahmed nor myself are the first to note this publicly either.
GK Chesterton commented that fairy stories are told to children to teach them about fairies, but to teach them that they, and evil, can be beaten.
Or, if we call this propaganda then bedtime stories are about getting that underlying myth into a child's mind early on.
Terry Pratchett, that marvellous novelist, made the point many times that human brains seem to have story shaped holes in them.
Even, this is the way that we think. Does the narrative fit that story shape that we already have there?
This depends upon what those underlying myths are that shape the space for us to think in – very much the point that Mr. Ahmed is making.
Much of my own formal work is making use of this as well.
Trying to take the complex subjects that I am actually expert in and forming them into the shapes that then fit those story and myth shaped holes by which we all think.
The problem as I find it is that some of the things generally believed which shape those holes a story can slot into simply are not true.
I was once told, for example, that Walmart made $120 billion a year. This was in the context of whether they could afford to pay their workers more.
What my irate correspondent had missed is that gross profit and net profit are different things.
The first is the revenue to a supermarket minus the costs of the goods sold.
That was – at that time – about $120 billion.
But then out of that has to come the costs of the stores, the transport, all the wages for the staff and, and, and, until we get to the net profit of about $3 billion that year.
Could Walmart afford a $5 billion a year pay rise?
Yes, sure, but it's rather a different calculation when profit is $3 billion not $120 billion.
Another that annoys is this idea that any profit at all is exploitation, expropriation even.
This relies on the Marxist interpretation of the labour theory of value.
The only thing that adds value is human labour.
Therefore any portion of a price that doesn't go to human labour is being, well, stolen really. Except the problem here is that it conflicts with other things we can note about humans.
Do we, actually, value things by the labour that has gone into them?
No, we don't, as any immediate examination of our own behaviour shows.
It could even be true that the value of something ought to be, should be, the labour that went into it.
But as that's not how humans work then it's not a useful story about the behaviour of human beings, is it?
There are stories within economics which are largely true.
They're all observations about human nature too rather than the big complex theories.
Humans tend to be interested in themselves and their own families more than the wider world.
They – we – try to do the best they can given their situation and knowledge. We all react to incentives, whatever they are.
The price of our doing this one thing is what we can't do because we've done this one thing – that's called opportunity cost.
In fact, most of the basics of economics – again, the basics, not the big theories built upon them – can be described in common everyday language.
We even usually have a proverb or aphorism that makes the same point.
The reason here should be obvious by now – we humans are excellent observers of our fellow humans.
So, a science like economics which tries to observe humans should come up with the same answers.
All of which gives us a very handy guide to what is actually useful economics.
If it conflicts with what we already know about human nature then it's unlikely to be all that useful to us.
For if it contracts how humans actually act then it's not something that's describing humans, is it?
Sure, as with Walmart's profit margins it's possible for those stories in our heads to have the wrong facts.
But they very rarely do contradict actual human nature, the logic of how we and our fellows react.
At which point the one thing I disagree with Mr. Ahmed upon – he thinks that to gain a better world we need to change those basic myths we have about ourselves.
Ah, no, I do disagree.
Let's acknowledge them then try to tame them.
Note the foibles and twists of our internal monologues and shape their expression to make it a better world.
Tim Worstall is a senior fellow at the Adam Smith Institute in London
