bravely cried out, “I can’t tell a lie, Pa; you know I can’t tell a lie. I did cut it
with my hatchet.”11
This little story is widely remembered in the United States today as a moral
lesson. A search on “I can’t tell a lie” and “Washington” gets 188,000 Google
hits, over a third as many as “I can’t tell a lie” by itself. This Washington story is
on its way to usurping a basic sentence. Why is it such a contagious story? It
must be because it is about the first president of the United States, and it has
patriotic appeal. In that context, it is a great narrative; about almost anyone else,
it would be nothing. There isn’t much to the story, just that as a child
Washington didn’t lie. “I can’t tell a lie” and “Lincoln” gets 102,000 hits on
Google, as the equally famous President Lincoln is introduced into the story and
sometimes even substituted for Washington. The story, involving two legendary
US figures, is part of a constellation of economic narratives about honesty.
Those narratives seem to be part of a tradition of honesty, not unique to the
United States but maybe stronger than in some other countries, that has likely
helped propel the US economy by creating trust in business dealings and by
limiting bribery and corruption.
Often, the basic human-interest element of an economic narrative is embodied
in somewhat different stories going viral at about the same time. Different
versions of the narrative substitute different celebrities who are appropriate for
the target audience. For new narratives involving celebrities, there are already
familiar narratives about the celebrities in memory, which can enhance
contagion.12 The constellation of narratives built around celebrities is self-
reinforcing. In extreme cases, the celebrities attain superhuman status, and
associated ideas begin to seem natural and obvious. George Washington’s picture
is on every one-dollar bill and on every quarter-dollar coin in the United States.
Sometimes, everyday people coin apt or pithy quotes, but those quotes
become contagious only after the story is altered to substitute the name of a
famous person as the originator of the quote. For example, since the middle of
the twentieth century the socialist slogan “From each according to his ability, to
each according to his needs” has been attributed to Karl Marx. Actually, those
words were emphasized by socialist philosopher Louis Blanc in 1851, when
Marx was virtually unknown, and a variation of the phrase appears in the Bible.13
Louis Blanc was more famous than Marx until after 1900, but today he is largely
forgotten. Thus the quote became attributed to Marx in the mid-twentieth

century, by unknown persons who started a mutated epidemic by attaching a new
celebrity to it.
The website Wikiquotes tracks down the origins of famous quotes, and
typically the famous person was quoting someone else, if he or she even said it
at all. But, no matter: Wikiquotes notwithstanding, the story of the quote’s true
source will never go viral because it is not contagious. And contagion is the all-
important element: if the narratives are not repeated in human communications,
they will be gradually forgotten. Narratives involving celebrities can suddenly
lose their contagion if some event discredits the celebrity, whether or not the
ideas in the narrative are true or good.
As we’ve seen, the choice of celebrities has patriotic dimensions, as people
have a preference for individuals in their own country or their own ethnic group.
This preference helps to explain why the epidemic spread of narratives is often
not seen or acknowledged. To acknowledge it typically requires admitting its
foreign origin. Practically no one has an incentive to present an idea as coming
from abroad, except in unusual circumstances. Thus we have the illusion that
important ideas came spontaneously to a compatriot, and we see nothing of the
idea’s true world epidemic. Beyond celebrities, there are issues of party or
regional or religious loyalty.
Patriotism does not mean just flag-waving assertions of loyalty. It is also the
feeling that only in our own country does anything important, good or bad,
happen. For example, CBS News in the United States has a regular morning
feature, “Your World in 90 Seconds,” that purports to tell you very succinctly
everything you need to know about today’s news. But the name is inaccurate
because the report doesn’t cover the world. Virtually all of the news stories are
from the United States (with the exception of tidbits about the British royal
family and Vladimir Putin). Maybe the title is accurate for many of the
Americans who think that the United States is the world, despite having only 5%
of the world’s population.
We have seen seven key propositions with respect to economic narratives:
1. Epidemics can be fast or slow, big or small. The timetable and magnitude of
epidemics can vary widely.

2. Important economic narratives may comprise a very small percentage of
popular talk. Narratives may be rarely heard and still economically
important.
3. Narrative constellations have more impact than any one narrative.
Constellations matter.
4. The economic impact of narratives may change through time. Changing
details matter as narratives evolve over time.
5. Truth is not enough to stop false narratives. Truth matters, but only if it is
in-your-face obvious.
6. Contagion of economic narratives builds on opportunities for repetition.
Reinforcement matters.
7. Economic narratives thrive on human interest, identity, and patriotism.
Human interest, identity, and patriotism matter.
In part III, we use these seven propositions as a framework to look at
historically important economic narratives, to identify what we can learn from
economic narratives and their consequences in the real world.

Part III
Perennial Economic Narratives