Edward Quince’s Wisdom Bites: The Rhetoric of the Spreadsheet

 There is a running joke in corporate finance: "More fiction has been written in Excel than in Word." We view economic models as hard science. We look at a 14-tab spreadsheet projecting a company's earnings out to 2030 and assume it represents objective reality.

It doesn't. It is just a story told with numbers.

The Wisdom Bite:

"Rhetoric is the art of the incomplete argument, a 'heuristic' device, or story, to point the mind in the right direction. In a sense all the social sciences are rhetorical. This simply means that the conditions required to make them universally true do not hold, or only hold under special conditions. They are only partially true."  - Robert Skidelsky

"From this perspective, economic modeling is a persuasive undertaking: it does not aim to discover truth, it tries to persuade people of the truth of its own 'text'. All reality is 'socially constructed'"  - Robert Skidelsky

The Persuasive Undertaking 

When an investment banker brings you a pitch deck, or a central banker publishes an economic forecast, they are not handing you a blueprint of the future. They are handing you a rhetorical device. Economic modeling is a persuasive undertaking designed to convince you to buy a stock, approve a merger, or accept a policy.

Because the conditions required to make these models universally true do not exist in the real, messy world, they are only ever partially true. They rely on the assumption of rationality—an assumption that is wildly flawed.

The Financial Takeaway: Stop viewing financial models as the discovery of truth. View them for what they are: marketing documents. When someone shows you a model proving a business is undervalued, ask yourself: What narrative are they trying to construct? What variables did they conveniently omit to make the math work? Protect your capital by bringing extreme skepticism to any spreadsheet that claims to have perfectly charted the unknown future.