Jonah Lehrer — Is the world just?

...Why do we ignore [things like] prisoner abuse? After all, we are usually empathetic creatures, sensitive to the suffering of others. Why does this suffering leave us cold?

Part of the answer is rooted in a human bias. It turns out that we all have an intuitive belief in justice – people get what they deserve. This instinct makes all sorts of social contracts possible, but it comes with a perverse side effect, causing us to ignore stories of suffering that directly contradict that assumption. Because we believe in justice, we ignore stories of injustice.

This is known as the Just World Hypothesis and it was first developed by the social psychologist Melvin Lerner. One of the classic demonstrations of the effect took place in 1965: Several volunteers are told that they are about to watch, on closed circuit television, another volunteer engage in a simple test of learning. They see the unlucky subject – she is actually a graduate student, working for Lerner – being led into the room. Electrodes are attached to her body and head. She looks a little frightened.

Now the test begins. Whenever the subject gives an incorrect answer, she is given a powerful jolt of electricity. The witnesses watching on television see her writhe in pain and hear her scream. They think she is being tortured....

Read the whole post at Wired: The Frontal Cortex, Is the world just? (h/t Edward Harrison)

This post by Lehrer shows about narrative shapes meaning and perspective, and therefore influences the apprehension and description of reality. This is not a new discovery, and it is not applicable only to matters like justice.

A lot of economics is based on a narrative that is widely accepted even though many of its assumptions have been falsified empirically, or are not even stated as testable hypotheses. This is an indication that a great of what passes for science is simply ideology.

This explains a lot of the misunderstanding of monetary economics and the resistance to MMT. MMT runs against prevailing narratives embedded in the contemporary economic universe of discourse that have filtered from academia to the media, public, and policy makers.

This is particularly troubling at this point, since the prevailing narrative just broke down big time when mainstream economists were not only unable to foresee the onset of the global financial crisis until in broke, but also they were unable to account for it afterward. But the narrative still stands, since it is so deeply embedded.

One of the powerful and growing narratives is based on the norm that all indebtedness is "bad," and that government deficit expenditure involves increasing public debt, which is exponentially bad since it is passed on to future generations.

There is also a narrative emerging shared by both left and right that "debt-based" money is one of the chief underlying problems. This is at the basis for some people calling for abolition of the Fed.

These narratives are gaining strength and breadth, and this phenomenon — I would call it a fad at this point — is creating obstacles in the way of understanding and acceptance of MMT. That's not only an economic problem; it is a social and political problem as well. For as long as the understanding eludes the public, media and policy makers, more financial crises are in store.