By Dr. Robert Scott

  • Dec. 15, 2021
  • 2-min read

Especially as a young man, I enjoyed spending hours reading books and short stories written by Isaac Asimov. His writings were adventurous and scientifically (for the most part) possible. He was an endorser of technology that brought more jobs by the end of the 20th century than we had people at the beginning of the century. He appealed to the economist in me.

Asimov wrote (Newsweek, January 21, 1980; re-posted on Medium: “A Cult of Ignorance”) an article critical of people who considered college professors and other highly educated people to be elitists. Snobs. He cited a few examples of famous people who denigrated college professors. It seemed like a good point, especially to a young college professor.

Today, I hear disdain for those who are unvaccinated. They are described as “misinformed” or “ignorant.” They should follow the science. (Which apparently means they should follow Tony Fauci, who says “I am science.”) Yet, recent reports from the CDC showed about 30% of healthcare workers have not been vaccinated. This includes many doctors and nurses that logic says would have some knowledge of science (even if not of “Fauci-science”).

This is thousands of highly trained people, with millions of years of cumulative training and experience, saying “no” to the Covid shot. Yet the disdain continues with unvaccinated people being effectively called ignorant and uneducated. They are the people Isaac Asimov was calling anti-academic.

I have a Ph. D. in economics. I take pride in the accomplishment, but only mention it when it is relevant to a discussion, as it is here. While in doctoral studies, I was introduced to a concept called “money illusion.” Money illusion refers to the concept that people only see their incomes (or savings, etc.) in dollar terms. For example, if they see their incomes rise by 10%, they believe they can buy 10% more goods. EVEN if prices are up by 10%!

Of course, it doesn’t take a Ph. D. in economics, or even underwater basket weaving, to know that a 10% increase in costs will wipe out the benefits of a 10% increase in income. But many in the bureaucracy, the halls of Congress, or the academy think people won’t figure this out. The prevailing opinion seems to be that “the masses are asses,” if you’ll pardon the expression!

The money illusion came from an academic who was arguably a genius, but maybe came up with this idea on an off day. Irving Fisher gave as an example of a woman who couldn’t seem to figure out that she was losing profits due to cost increases. It is widely believed, unfortunately, that a lot of average folks will not notice increasing prices if their wages are rising as well. I don’t buy it.

In more than half a century of working with college professors (and 45 years of being one), I have never heard of a more hair-brained notion. It is relevant today. As we have discussed in these pages, we are verging on an inflation rate above 10%, and it is already at the highest level in nearly 40 years. Do people who buy into the money illusion really believe the population at large will not see their buying power fall? I sincerely doubt it.

The average American is, in many ways, smarter than the elite who make decisions about things like interest rates, the money supply, and fiscal policy. They will notice rampant inflation because it directly affects their quality of life. It is a good thing, too. Sometimes, the masses just aren’t as dumb as the elitists choose to believe.

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