Novelists as Economists

From a new economics paper by Harvard’s Dani Rodrik, the concession that novelists do a better job than economists in predicting the financial future. The author highlights Gary Shteyngart’s dystopically fun latest novel.

Novelists have a better track record than economists at foretelling the future.  Consider then Gary Shteyngart’s timely comic novel “Super Sad True Love Story” (Random House, 2010), which provides a rather graphic vision of what lies in store for the world economy.  The novel takes place in the near future and is set against the backdrop of a United States that lies in economic and political ruin.  The country’s bankrupt economy is ruled with a firm hand by the IMF from its new Parthenon-shaped headquarters in Singapore.  China and sovereign wealth funds have parceled America’s most desirable real estate among themselves. Poor people are designated as LNWI (“low net worth individuals”) and are being pushed into ghettoes. Even skilled Americans are desperate to acquire residency status in foreign lands. (A degree in econometrics helps a lot, as it turns out).  Ivy League colleges have adopted the names of their Asian partners and yuan-backed dollars are the only safe currency.

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Comments

  1. But remember, a while back when it was riding high, there were all those "Japan will conqueror the world" books.

  2. wally says:

    Before lauding a prediction, one should wait to see whether it comes true.

  3. omnivore says:

    Not a prediction but an statement on economic behavior:
    Plotting covetousness and deliberate contrivance, in order to compass a selfish end, are nowhere abundant but in the world of the dramatist: they demand too intense a mental action for many of our fellow-parishioners to be guilty of them.

    It is easy enough to spoil the lives of our neighbours without taking so much trouble; we can do it by lazy acquiescence and lazy omission, by trivial falsities for which we hardly know a reason, by small frauds neutralized by small extravagances, by maladroit flatteries, and clumsily improvised insinuations.

    We live from hand to mouth, most of us, with a small family of immediate desires; we do little else than snatch a morsel to satisfy the hungry brood, rarely thinking of seed-corn or the next year’s crop
    G. Eliot, The Mill on the Floss

  4. By the way:

    "Poor people … are being pushed into ghettoes."

    Pushing into? When did it stop?

  5. Guest says:

    Great prediction. Almost as good as all those novelists who declared the Soviet Union was the future, or Michael Christon's awesomely anti-Japanese Rising Sun

  6. daniel says:

    Everyone needs to be cautious with China. Europe tries to prevent their expansion in EU (especially Germany)

  7. SelenesMom says:

    Not sure Rodrik is really arguing that Shteyngart is making an accurate prediction of the future, so much as accurately capturing our current mood and anxieties of the present. This would be in the tradition of dystopian literature in general and Russian dystopian literature in particular, but why ruin this lively economics and finance discussion with literary pedantism?

  8. Snj says:

    Irony —

    Remember the Apple Mac 1984 commercial? http://www.youtube.com/watch?v=OYecfV3ubP8

    Now look at it's Foxconn operation —

    Think about it

  9. Skeptical says:

    What about all the sci fi novels that predict alien invasions or world domination by artificial intelligence? Are those also predictors of what the world will be like? Perhaps they are simply stories meant to entertain and given enough of these stories that "predict" the future, one of them will be somewhat close to the truth.

    If economists started writing about all possible outcomes of the future and one of them happened to be right once, the world would laud that economist as being the lone genius amongst a pack of know-nothings. **Ahem — Meredith Whitney — Ahem **