Scanlon — “When expectations, theory, and reality diverge, that’s when…”

Source: In This Economy?: How Money & Markets Really Work — Kyla Scanlon

Book page: scanlon-in-this-economy-part-1

From: In This Economy?

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When expectations, theory, and reality diverge, that’s when the vibes get really weird. Economic theory is the perfect example of this. There is a gap between what textbooks say is going to happen and what companies actually end up doing. Economics is known as the dismal science, but it really should be known as the dismal art. Most stock valuation models are an educated guess about the future; most economic theory is measurable, but on the basis of loose facts. As the English author Hilary Mantel wrote in a 2017 Guardian piece on facts, history, and truth, “Evidence is always partial. Facts are not truth, though they are part of it—information is not knowledge. And history is not the past—it is the method we have evolved of organising our ignorance of the past. It’s the record of what’s left on the record.