# How many actually know how the world's economy works?

**URL:** <https://boards.straightdope.com/t/how-many-actually-know-how-the-worlds-economy-works/636302>\
**Category:** In My Humble Opinion\
**Created:** [September 30, 2012, 8:59am UTC](https://boards.straightdope.com/t/how-many-actually-know-how-the-worlds-economy-works/636302 "2012-09-30T08:59:16Z")\
**Posts on this page:** 3\
**Page:** 1

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**Author:** ![grude](https://avatars.discourse-cdn.com/v4/letter/g/e47774/32.png) [@grude](https://boards.straightdope.com/u/grude)\
**Post date:** [September 30, 2012, 8:59am UTC](https://boards.straightdope.com/t/how-many-actually-know-how-the-worlds-economy-works/636302/1 "2012-09-30T08:59:16Z")

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I didn’t put this in GQ because I’m honestly not sure how stupid of a question it is.🙂 And also I’m open to opinion rather than plain facts.

But how many people in the whole world actually know the nitty gritty of how the world’s economy actually works? I’m thinking of things like the LIBOR scandal which basically revealed that a mechanism of setting interest rates was basically a lie and very few people know about it.

> **[Libor scandal](https://en.wikipedia.org/wiki/Libor_scandal)**
>
> This dwarfs by orders of magnitude any financial scam in the history of markets.
> The Libor scandal was a series of fraudulent actions connected to the Libor (London Inter-bank Offered Rate) and also the resulting investigation and reaction. Libor is an average interest rate calculated through submissions of interest rates by major banks across the world. The scandal arose when it was discovered in 2012 that banks were falsely inflating or deflating their rates so as to profit from trades, or ...

> [@](#):
>
> The scandal arose when it was discovered that banks were falsely inflating or deflating their rates so as to profit from trades, or to give the impression that they were more creditworthy than they were.[3] Libor underpins approximately $350 trillion in derivatives. It is controlled by the British Bankers’ Association (BBA).[4]

How many other areas are there where common knowledge is possibly a lie? Where instead of complex computer algorithms a guy is actually making decisions based on what the hallucinations in his head tell him?

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**Author:** ![TonySinclair](https://avatars.discourse-cdn.com/v4/letter/t/49beb7/32.png) [@TonySinclair](https://boards.straightdope.com/u/TonySinclair)\
**Post date:** [September 30, 2012, 9:17am UTC](https://boards.straightdope.com/t/how-many-actually-know-how-the-worlds-economy-works/636302/2 "2012-09-30T09:17:42Z")

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Well, you kind of answered your own question if you include things like the LIBOR scandal. Obviously, only a few insiders knew about that, and there are bound to be similar things going on in other major banks and brokerages with different groups of insiders, so nobody knows everything that’s going on.

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**Author:** ![Ken001](https://avatars.discourse-cdn.com/v4/letter/k/43a26b/32.png) [@Ken001](https://boards.straightdope.com/u/Ken001)\
**Post date:** [September 30, 2012, 10:30am UTC](https://boards.straightdope.com/t/how-many-actually-know-how-the-worlds-economy-works/636302/3 "2012-09-30T10:30:53Z")

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The global economy is so large and so complex that no single person can understand it. Economists know this so what they do is try to apply models based on rational behaviour and extrapolate into the future.

The risks to this approach is that humans do not behave rationally and furthermore the resources of the past may not exist in the future. Oil may run out. Water may be limited. Nobody knows.