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Stories That Can’t End Well

After almost a century in which economic policymaking was the preserve of technocrats and social scientists, scholars from narrative-based disciplines have begun to feature prominently in policy debates. But by using partial knowledge to advance specific policy prescriptions, they have become even more dangerous than economists.

PRINCETON – In today’s irrational world of fake news and bad-faith politics, a new mantra has emerged: It’s all about narratives. Power today lies in one’s ability to tell a story. As a case in point, consider Ukrainian President-elect Volodymyr Zelensky, a comedian whose only political experience is that he played a president on TV. Zelensky beat the incumbent, Petro Poroshenko, because he knew how to spin a yarn.

Today’s performative politics represent a sharp break from a century in which social science drove governance. Until recently, policymakers sought to provide empirically compelling – albeit often simplified – assessments of problems such as poverty, disease, and violence, in order to build political support for evidence-based solutions.

After the 1930s, this technocratic approach was shaped by economists who used national income accounting to manage macroeconomic conditions. Relying on a straightforward conceptual framework developed by the British economist John Maynard Keynes, they saw deficient demand as the root cause of underemployment and overcapacity. At the same time, they abided by an economic orthodoxy that linked monetary growth to inflation. In both cases, there was a simple causal mechanism, embodied in the Phillips curve, for controlling unemployment and prices.

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