The first lesson of applied economics is to doubt anecdotal evidence. Small samples of one, two, three, or a handful of observations give almost no information about the patterns in a large population. As applied researchers, we develop very quickly a deep mistrust of anecdotal evidence.
In stark contrast, novelists and journalists reach the pinnacle of success in their careers by becoming virtual virtuosos of the anecdotal. A novel is, itself, an extended anecdote. Journalists are often judged by the skill with which they render small sample events, capturing the human interest aspect of the story. The anecdote is the essence of the article, the novel, or the column.
Successful novelists almost always possess a hobbled economic intuition. Even worse, many of them seem to think, for some reason, that they are economists, that understanding economics consists precisely of mastering the art of disliking corporations, being apalled by poverty and inequality, empathizing with one's fellow man and conveying one's empathy with eloquence. (I write this with no ill feelings toward novelists, having written a couple of unpublished novels myself). In short, serious novelists often try to comment on the relative merits of different economic systems and the wisdom of economic agents.
I'm thinking of John Steinbeck in the Grapes of Wrath, and his charmingly poetic argument for why family farms would always be more efficient than large company-owned farms. Suffice it to say, that one's been fasified. Norman Mailer once said that living in the former Soviet Union was not much different from working for a major corporation in the United States. (He seemed to forget that you can always quit your job in a big corporation and do something else--most people switch jobs many times in a lifetime--but you never got to 'quit' the Soviet Union), Gabriel Garcia Marquez is a fan of Fidel Castro, along with many other esteemed writers. Don Delillo, Norman Rush, and other contemporary novelists routinely feign an insight into economic phenomena they neither understand nor should be expected to understand. I doubt that any of them have ever looked at an economic dataset.
But they are masters of anecdotes. That's what we pay them for. They have the ability to imagine specific events and recount them in a way that feels lifelike to the reader. It is a splendid gift, a rare and valuable talent, but one that is almost irrelevant to development of sound economic analysis.
Why is every writer and pseudo-intellectual a closet economist? This, to me, was a secondary tragedy associated with the popularitry of Marxist and socialist thought among academics and intellectuals of a generation ago: Marxism made every philosopher, artist, poet, and comp. lit. major into an economist. There were brilliant socialist economists of course (Paul Samuelson could be described as a market socialist). But for most intellectuals, economic analysis became an act of the spirit, rather than the painstaking and sytematic analysis of evidence for the purpose of confirming or refuting explanations of what we see.
Data, then, is the antitode to anecdotes. From firsthand experience, I offer an understatement: Data tends to be nasty and uncooperative. It does not serve up the glib certainties that anecdotes do. It rarely gives you a warm feeling in your tummy, rarely confirms your ideological prejudices. But it is, I think, the beginning of knowledge. (Or, more to point, the beginning of knowledge of one's ignorance.)
More on novelists and journalisits in the next post. In the meantime, I invite my readers to submit there favorite examples of bad economics in novels or from the mouths of novelists and playwrights. I've barely scratched the surface.