Economics is not causal. It is epistemic.

In Helsinki, during a UNU-WIDER seminar, I listened to Kaushik Basu present a simple but decisive idea: laws do not work because they are enforced—they work because people believe they should. Compliance is a matter of shared expectations, not force.

Later, I referenced this same view in an economic discussion. The reply was curt: “Economics is utilitarian.” It was not a methodological argument. It was an identity claim. Economics, in that room, was not about understanding—it was about preserving a particular way of seeing.

That moment clarified something essential: mainstream economics doesn’t just model relationships between variables. It models what is deemed thinkable. Anything that destabilizes its architecture is dismissed, even if it reflects reality more faithfully.

We do not live in a causal world. We live in a world that remembers, that interprets, that adapts—poorly or well—to the unexpected. In such a world, causality is useful, but insufficient. It is a local instrument inside a far deeper epistemic terrain.

A policy does not end with its effect. It leaves traces in institutional memory, in future credibility, in the justifications people adopt—or reject. An economic model is never neutral. It is a narrative that affirms certain forms of order and silences others.

So the question is not just what causes what. The real questions are:

How does a belief survive when its environment shifts?

How does an institution listen after learning not to doubt?

How much dissonance must accumulate before a paradigm collapses?

This is the economy I care about—not one that clings to pristine equations, but one that dares to model the conflict between what we expect and what actually occurs.

An economy that knows the real danger isn’t being wrong—it’s not knowing what to do when the data no longer confirm our convictions.