« Is There an "Anti-Affirmative Action Wave Washing over America"? | Main | What Economists Can Learn from Evolutionary Theorists »

Wednesday, November 29, 2006

Higher Powered Economics

Stephen Gordon at Worthwhile Canadian Initiative offers an explanation for why "explaining economics to non-economists is as difficult - and as frustrating - as explaining the theory of evolution to creationists":

The Intelligent Design theory of economics, Worthwhile Canadian Initiative: Mark Thoma at Economist's View has been wading through what non-economists think of economics, and he's finding the exercise somewhat frustrating. For someone who hasn't had formal training in the field, anti-economics is often more persuasive than the real thing. Paul Krugman ran into this particular brick wall a few years ago, and realised that the correct response to many criticisms of economics is "You just don't understand".

I used to think that the yawning gap between economists' understanding of economic issues and that of non-economists was primarily a problem of communication: we simply were not doing our job of explaining our ideas to the broader audience of non-specialists. But it sometimes seems as though explaining economics to non-economists is as difficult - and as frustrating - as explaining the theory of evolution to creationists.

Intelligent Design as applied to economics takes pretty much the same form as it does with biology: "What we observe couldn't have just happened; it's obviously the work of some Greater Power." When it comes to evolution, the Greater Power generally takes the form of an omnipotent diety. The counterpart in economics is the 'economic elite': the existence of inequality is interpreted as evidence that those who have done well did so by design.

Economists do of course try to explain that market outcomes are the result of decentralised interactions between self-interested agents - and that these interactions generally lead to socially desirable outcomes. (And even when those outcomes are not desirable, market-based solutions are generally better than those based on what a central planner could come up with.)  But once you've convinced yourself that elites are manipulating market outcomes, it's all-too-easy to persuade yourself that those who would argue otherwise must necessarily be bought-and-paid-for apologists for the omnipotent elites. And once you've persuaded yourself of that, it becomes pretty much impossible for anyone to say anything that will budge you from your position.

Stefan Geens at economonitor adds more:

Intelligent design vs. the invisible hand, by Stefan Geens: A truly wonderful post on Worthwhile Canadian Initiative posits that the reason many people have trouble understanding basic economic principles is the same reason many people have trouble accepting evolutionary theory: They instinctively prefer an intelligent designer...

The analogy even bears some straining: Economics and evolution are both driven by an "invisible hand" of decentralized interactions between selfish agents, and both sciences are susceptible to interpretations that fall prey to the naturalistic fallacy: If it happens in the market, then it is good. If it happens in nature, then it is good. Neither inference holds, of course, and so we remain free to make normative statements about how best to regulate markets or how to lead a moral life.

I can't say I fully understand the resistance to economics, so not sure I agree. I can say that one of the things I've been most surprised about since I started doing this is how little regard many people have for economists and their ideas. I guess we still have lots of work left to do.

While we're on the topic, there's also this from Brian Caplan at Econlog:

Difference in Deference, by Brian Caplan, Econlog: Over at Overcoming Bias, Robin Hanson amusingly contrasts the abject deference the public gives to physicists with the stubborn defiance the public gives to economists:

Consider how differently the public treats physics and economics. Physicists can say that this week they think the universe has eleven dimensions, three of which are purple, and two of which are twisted clockwise, and reporters will quote them unskeptically, saying "Isn't that cool!" ... I see the same pattern with my students - they'll easily believe physics claims, but are very reluctant to entertain standard economics claims. ... As Caplan emphasizes, the publics' problem with economics is not the things they don't know, it is the things they know that ain't so...

    Posted by on Wednesday, November 29, 2006 at 12:33 AM in Economics, Miscellaneous | Permalink  TrackBack (1)  Comments (88)


    TrackBack URL for this entry:

    Listed below are links to weblogs that reference Higher Powered Economics:

    » Brad DeLong has the best Economics discussion of the week from Marginal Utility

    Brad DeLong (last seen getting battered and bruised here) shows why one must fight on as he gets into the details of Paritha Dasgupta's discussion of the Stern report, which Arnold Kling (as usual) hacks into misinterpretation. [Read More]

    Tracked on Friday, December 01, 2006 at 12:23 PM


    Feed You can follow this conversation by subscribing to the comment feed for this post.