I recently came up with a very interesting article concerning economics. The author introduces a very interesting term called “Economic Fallacy” – which defines as not something crazy but plausible and logical idea, yet with something missing. According to him, once fallacies take deep root into polices, they may burden whole economic system. Thus he distinguishes several types of fallacies.
- OPEN ENDED FALLACY – is type of fallacy which comes in hand for many politicians. These are “zero end promises” that are both misleading and delusive. For example, no matter how much is done to promote health, more could be done. No matter how things are safe, they could be made safer. No matter how deep reforms are done, they can still be done deeper. By creating open-end fallacy, politicians direct unnecessary money flows to open-ended objectives, which are neither attainable nor desirable for the society.
- FALLACY OF COMPOSITION – is a type of economic delusion that states “What Is True for Me Is True for You Too.” Many politicians copy different economic models, legislature – stating it has been successful in one country; therefore it will be a success in another. However, they fail to consider the environmental, cultural and legacy aspects of the country. At the end, when they fail and when we ask the reason, they say that “situation would be even worse, had we not done so.” Thus, fallacy of composition is delusive and requires careful consideration.
- ZERO SUM FALLACY – is based on assumption that “By Making Somebody Better-off We are Making Somebody Worse-off.” For example, for many years I have observed places where freelancer workers (мардикор) hoarding near “Eski Juva” bazar all day long. As most of them neither have documents nor pay taxes as a legal worker, government officials have taken measures to dissolve them by setting fines, sending them to mandatory work or even forcing them to social activities. Although the government succeeded to dissolve the congregations at some palaces but they flocked in other places. Thus, at the bottom the problem was never solved but merely pocketed from right area to left, creating zero sum effect.
On the other hand, as most of you may agree that health is certainly something desirable. But would anyone want to devote half the national income to wipe out tuberculosis? At the end, unlimited extrapolations constitute special variations of open-ended fallacy. Much bitter opposition to the building of homes, highways or even water and sewage systems economic fallacies create unsustainable delusions and unnecessary flow of funds.