You Fail Economics Forever - Television Tropes & Idioms

October. This is one of the peculiarly dangerous months to speculate in stocks. The others are July, January, September, April, November, May, March, June, December, August, and February.
— Mark Twain

The nice thing about Mathematics and other Hard Sciences is that there is no question^* that 2 + 2 = 4.

The complicated thing about Sociology and other Social Sciences is that there's room for interpretation and debate.

The horrifying thing about Economics is that both of these are true.

This violent collision leaves a few absolutes to take refuge behind, and a wide open mine field for catastrophic assumptions and mistakes, and prime Flame Bait. There are a fair number of widely divergent economic schools of thought, each with a reasonable claim to accuracy, and each which believes the others to fail economics forever. This is probably one of the reasons Thomas Carlyle called economics "the dismal science". (And few agree on that term... Economists will claim their science isn't dismal, and many other fields will claim it's not a science. The dance goes on.)

Thus, anything to do with economics, right down to an innocent page on a wiki described as "a buttload more informal" than That Other Wiki, is a breeding ground for arguments. Think of this page as the sweating dynamite version of a Spam Attack In A Can, catastrophe only averted by the Rule Of Cautious Editing Judgment. Play nice.

Above all else, let's get one thing straight here: this trope is not about which real life economic system, theory, or idea is right or wrong (because no one can agree on those things anyway), but about which completely fictional economic system, theory, or idea is completely unworkable under the laws of economics. This does not mean they are not regularly tried by various Real Life groups, just that they aren't economically sound.

A few possibilities for these are Mary Suetopias, Dystopias, or Author Tracts which for the sake of the story ignore basic economic theory to make a point. To avoid Flame Bait, examples should exhibit one or more of the following economic fallacies:

Money For Nothing: Someone or something gives out 'free wealth', be it by literally printing money or handing out gold ingots to everyone from a new huge mine. This should actually lead to everyone having Worthless Yellow Rocks, although this can be a good idea (under some schools of economics) in very limited circumstances.
Destruction Equals Employment: Otherwise known as the "Broken Window Fallacy". The government props up its economy by having a huge war industry. The fallacy lies in ignoring the fact that the resources destroyed in the war (i.e. all the money spent blowing stuff up) could have been used for building things instead (i.e. wars that aren't necessary for self-defense are always economically destructive overall (when all the costs and benefits to all parties are tallied up)).
- Note, however, that this only covers cases where the domestic war industry is supposed to be the primary motivation for the economy (rather than an embezzlement scheme by the military-industrial complex.) War itself, on the other hand, is a very profitable pursuit for those who loot and plunder.
- Heck, it's even sustainable if you use crop rotation…
- Also, according to Keynesian economic theory (one of the more popular schools), massive military spending can provide an economic boost in the situation that the economy is already a complete wreck. The standard example for this is World War II ending the Great Depression. That said, Keynesians agree that military spending does act as a drag on a healthy economy.
Digging and Filling Ditches: The government (or a corporation) gives everyone a job and pays them, without regard for the actual usefulness of said jobs. When you boil it down, this is just another flavor of "Money For Nothing". It is also another flavor of the broken window fallacy or "Destruction Equals Employment". There are significant opportunity costs associated with the resources required to pay the people working on the newly-created jobs (because these resources could have been used to do something else, which may have been more beneficial).
Exporting Good, Importing Bad: It's usually used something like this: Exporting something is good and makes others dependent; this is good. Importing things is bad and makes you dependent; this is bad. Note that there was an early economic theory, mercantilism, which taught this exactly. In truth, some countries have a relative productive advantage in some areas, while other countries have different relative productive advantages. Trade allows countries to specialize in whatever production they have an advantage in, thus producing more in total, and then trade with each other. This makes both countries better off. For example, perhaps Country A can produce 4 cans of butter, or 2 cans of butter and 1 carton of eggs, or 2 cartons of eggs. Country B can produce 4 cartons of eggs, or 2 cartons of eggs and 1 can of butter, or 2 cans of butter. With trade, they can produce at their advantages of 4 cans of butter in A and 4 cartons of eggs in B and then trade so they each have 2 cartons and 2 cans. Making them both better off than if they produced everything in their own country.
- It's worth noting that in an Empire that has expanded sufficiently the Mercantile system makes more sense (although probably still isn't optimal) as plenty of trade for almost any desirable resource can be done within one's own empire.
- It is also worth noting that this might conceivably be true for when thinking from a political rather then economic perspective. That is if exports increase your Empire's power in relation to other Empires then you might consider that "good". That does not mean it is economically good.
- Not to mention the fact that such trading practices can be bad in certain situations where there is a shortage of something. For example, if one nation produced exclusively peanut butter, and the other produced exclusively jelly, then when the peanut crop has something bad to it everyone goes without peanut butter sandwiches. Now imagine that, except with common foodstuffs, labor and manufactured goods. (Incidentally this is one of the main criticisms of a globalized economy. The other main one is that it sort of leaves countries with the "comparative advantage" in the lowest paying/least safe and secure outputs holding the short end of the stick... no country government would want to have the comparative advantage in child prostitution, or making sneakers for pennies, or natural resource plundering, and it's often in the richer companies interests to keep things that way.)
Ridiculous Future Inflation: The main problem with this is that it is often portrayed as being a natural and normal result without any of the many social and economic problems hyperinflation show in the real world. It is, however, normal to see drastically inflated prices as a result of a past inflation.
Wealth is Zero Sum: The assumption that all business or economics is based on grabbing the largest share of the pie that you can. This is how you get ideas like "businesses want to keep people unskilled and uneducated because that means they can control a larger share of the wealth", which ignores the fact that an educated work force would be far more productive and make everyone, including those formerly in control, much better off. The fact of the matter is modern economies are usually successful because they recognize wealth isn't zero sum.
Superiority Equals Success: The idea, that a product's measurable quality, for example a screen's resolution, a vehicle's speed, or a computer's processing capacity is the most important thing for consumers. In Real Life, even when they cost the same, often the "inferior" product is more appealing, simply for being easier to use, or even being sold in more attractive colors. Most consumers are laymen who are uninterested in the details of the product that they need to buy, as long as it does what they need.
- Note that the previous two fallacies affect each other: It can be generally said that businesses wish for people to be skilled and educated except where it concerns their particular product. The whole concept of advertising is in large part based around making educated comparisons between similar products difficult. And, of course, it goes without saying that, for good or for bad, the free-market economy runs much smoother when people have been educated to believe in the free-market economy.
Ridiculous Rationality: The basic assumption underlying this one is that human beings are perfectly rational (everyone will buy exactly and only what they need, at the best possible price) and a perfect market is possible (laws against unfair dealings are both reasonable and enforced, prices reflect all external factors, and there are no significant real-world barriers to starting or operating a business.) Basically, even under ideal circumstances, even with good intentions, a well crafted economic system must mitigate the fact that You Suck and Humans Are Bastards. Note that this works hand in hand with the previous fallacy: the real world is not a perfect meritocracy. Be wary of believing too much in fictional ones that are.
- Of course this is the main critique given of real life economic theories, as rationality is the primary assumption backing almost all economics. Most economists argue back that as long as you are dealing with large groups of people, rationality is a workable assumption. Oh and rationality usually assumes Humans Are Bastards — since rationality usually means being a bastard when you can get away with it is the best course of action.
Rights-Efficiency Tradeoff: The false dichotomy that suggests that civil liberties and workers rights would automatically undermine economic efficiency. This idea, which is implicit in the idea that Hobbes Was Right, is not only an oversimplified model of political theory, it's also a severe bastardization of welfare economics. In fact, many economic models like the coase theorem suggest that markets become more efficient when certain rights are institutionalized. This trope was notably more popular before the fall of the Soviet Union effectively discredited it forever, but many writers still haven't gotten the message. Whenever this trope is invoked, expect to see a lot of rag clad vagrants mucking about in the wastes outside a clockwork efficient police state, consoling themselves "at least I have my freedom".

A word of caution: some authors will actually make the above points work with the aid of Phlebotinum or even Aesoptinum. These examples are intentional, and probably don't apply. Run them by the discussion page first. Sometimes, for extra Anvilicious flavor, this trope is paired with Ludd Was Right, making a case for not changing anything technological or economic at all. Also, just because some of these things are stupid doesn't mean that they haven't been tried on many, many occasions.

Leave your pet theories at the door, put the natter in the Discussion page, and be prepared to read some stunningly stupid ways writers Did Not Do The Research. Please note, the Examples listed are for when the authors get it wrong. If the characters get it wrong and it is shown in-story to be wrong (for the right reasons), then place it in the Aversions.

This trope is not to be confused with Adam Smith Hates Your Guts. And for a common way of failing a shadier type of economics, see More Criminals Than Targets. When this occurs on a more personal level, see Hollywood Economics.

As a last note, economies are far more complicated than even most economists realize. Even a good author could be forgiven for not understanding them.