jump-start one’s connection to this new reality by buying some Bitcoin. Best of
all, one doesn’t have to understand Bitcoin to buy it. Vending machines at
convenience stores now sell Bitcoins and other cryptocurrencies. This “Be a part
of the future” narrative, enhanced by regular news of exciting fluctuations in the
price of Bitcoins, gives them value. It generates fluctuations in Bitcoin prices in
terms of national currencies, and these fluctuations thrive on and produce
contagious narratives.

Bitcoin as a Membership Token in the World Economy
We are living in a peculiar transition period in human history, in which many of
the world’s most successful people see themselves as part of a broader
cosmopolitan culture. Our nation-states sometimes seem increasingly irrelevant
to our ambitions. Bitcoin has no nationality, giving it a democratic and
international appeal. Inherent in its pan-national narrative is the idea that no
government can control it or stop it. In contrast, old-fashioned paper money,
typically with historical engravings of famous men in a country’s history,
suggests an obsolete nationalism, something for losers. Paper currency
resembles little national flags in a way; it is a symbol of one’s nationality.
Having a Bitcoin wallet makes the owner a citizen of the world and in some
sense psychologically independent of traditional affiliations.
How, then, do we summarize the popularity of Bitcoin? In the end, people are
interested in Bitcoin precisely because so many other people are interested in it.
They are interested in new stories about Bitcoin because they believe that other
people will be interested in them too.
The surprising success of Bitcoin is not really so surprising when we consider
the basic principles of narratives discovered by intellectuals who have thought
about the human mind, about history, and about mathematical models of
feedback. We discuss these great thinkers and their contributions in the next
chapter. Most of these thinkers were not economists by training or profession.

Chapter 2
An Adventure in Consilience
For me, thinking about narrative economics has been an adventure in the
discovery of consilience. The word consilience, coined by philosopher of science
William Whewell in 1840 and popularized by biologist E. O. Wilson in 1994,
means the unity of knowledge among the differing academic disciplines,
especially between the sciences and the humanities. All these different
approaches to knowledge are relevant in understanding the real and human
phenomenon of the economy and its sudden and surprising changes. When one
reflects that the economy is composed of conscious living people, who view
their actions in light of stories with emotions and ideas attached, one sees the
need for many different perspectives. Narrative economics therefore requires
concepts from most university departments.
Unfortunately, academic disciplines tend to become insular. A researcher
cannot know everything, and so the impulse is to think one must specialize,
narrowing one’s inquiry to the point where one can reasonably judge that one
has all relevant knowledge on a narrowly defined subject. To some extent,
university researchers must live with this reality. But the impulse can go too far,
and it often leads to overspecialization.
When economists want to understand the most significant economic events in
history, they rarely focus on the important narratives that accompanied those
events. As Figure 2.1 shows, economics has lagged behind most other
disciplines in attending to the importance of narratives. And, while all
disciplines increasingly pay attention to narratives, economics and finance are
still playing catch-up, despite occasional calls for a broader approach to
empirical economics.1

FIGURE 2.1. Articles Containing the Word Narrative as a Percentage of All Articles in Academic Disciplines
All fields show increased attention to narratives in recent years, but economics and finance are relative
laggards. Source: Author’s calculations using data from JSTOR.
Nor do most economists appear interested in using the enormous databases of
written words that they might work with to study narratives. When they do use
the word in published work, they most often do so casually and tangentially to
refer to what they perceive to be a conventional view that they will criticize. In
addition, they rarely document the narrative’s popularity, convey its popular
human-interest stories, or consider the impact of its popularity on economic
behavior. Finally, the word narrative tends to appear in offbeat or popularizing
economics journals. However, to the extent that an incipient theory of narrative
economics holds promise for helping us better anticipate major economic events,
economists can and should be learning more about narrative, gathering insights
by scholars from the fields discussed in this chapter. This chapter is an exercise
in consilience. It summarizes how thinkers in a variety of fields have used
narrative to advance knowledge within their disciplines and across disciplines,
and it provides a foundation on which economists might build to think more
imaginatively about narrative.

Epidemiology and Narrative
Medical schools have pursued mathematical modeling of the spread of disease
epidemics for about a hundred years, making the field well developed and
bursting with potential applications to economics. Epidemiology has produced
not one model but rather many different models that can be applied to different
circumstances, and it is central to this book, as we will see in subsequent
chapters. For those who want to examine these mathematical models in detail,
the appendix at the end of this book provides a survey of the models and their
possible applications to economic narratives.