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January 17, 2005

Comments

Chris R

Phil, I consider this to be one of your better posts. You've pointed out a set of common themes that bug the hell out of me in popular writing. I've wanted to compile this list for some time but you've just helped me. Let me go in reverse order:

1. The tendency to assume that any economic outcome results from the intention of a particular set of people. A disbelief that an economic equilibrium could be uncoordinated and spontaneous, not to mention efficient. I've seen a lot of writers search around for a term for this. Hayek grapples with this one quite a bit ("A Fatal Conceit"). Let me give this a name, the Conspiratorial Fallacy. "If the price of oil rose last week, it was in order to enrich George Bush's buddies." "The North keeps the South poor in order to exploit natural resources." That kind of blather. The funny thing is, this is the first thing that we teach against when we teach micro to undergrads. Skip the Lagrangeans if you must, but at least remember this.

Creationists don't believe that complicated biological structures could arise independently of conscious action. Conspiratorialists and Marxists don't believe that complicated economic structures could arise independently of conscious action. Pseudoscience belongs in the low-carb aisle at the grocery store, or at a seance. Not in serious writing.

2. An unwillingness to consider the results rather than the intentions of policies. See (1). Economics as morality, rather than economics as a set of outcomes. Easterly occupies a prominent place on my bookshelf for this reason. We now have six decades of results of various leftish policies. Some of them (supporting freedom and the rule of law abroad, civil rights at home, good tertiary education) have succeeded enough so that they are now considered rightish. Some of them (foreign aid for kleptocrats, import substitution, killing people, licenses and quotas, printing a ton of money) have proven disastrous. Why don't popular writers assess the results of their proposals? Why don't popular historians learn from history?

For that matter, look at actual ecological data rather than the scribblings of alarmists. Do the reforestation of the eastern United States, the deintensification of farming, and improving air quality in the industrialized world mean anything? How does this relate to California's water supply problems and congestion? Phil's point about environmental quality being a luxury good implies quite a bit here.

3. A misunderstanding of what production and consumption actually are. We consume no more physical resources per person than we did 30 years ago. We consume a lot more in the way of services and new arrangements of old stuff. Production is about rearranging stuff to add value. This reeks of alchemy to your average person. But a night out downtown is consumption in the same way that eating a hamburger is.

This really confused a lot of the early proto-Keynesians. They figured that as soon as people satiated their caloric needs, they'd stop working. We'd have a "general glut" of stuff. Add in some individisibilities in labor, and massive unemployment would result. But as economists we don't care about the history of thought. Anything written before 1995 is ancient history. Unless it was in Econometrica.

4. "X is bad, and Y is bad, so X causes Y." A lot of my friends blame illegal immigration for low wages, pollution, and tequila hangovers. Diamond blames aesthetically ugly communities in Ventura County for rioting in Watts. Nice try.

5. "If Paul is rich, he robbed Peter." Or, if Ventura County is rich, it's at Watts's expense. This is just full of it on so many levels. It's really another version of the conspiratorial fallacy. It also ignores the fact that a production economy has, well, production. Interesting neuroscience question: Are people wired to think this way? Is envy genetic? Is this an adaptation for an environment where marginal products are really low?

6. A willingness to ignore the real problems of externalities and mispricing. People respond to incentives. People in S California pay a pittance for water. They use too much of it. They pay a market price for coffee. They consume the right amount of it (more or less). This is what economic theory boils down to. Mayan kings don't pay the cost of their actions, so they're likely to do extremely inefficient things. After all, George Bush isn't building a monument to himself on the Mall.

Stakeholders don't usually do terribly stupid things if they can avoid it. If I own a farm as the Norse did in Greenland, or as the Anasazi did in New Mexico, I'd care about how it's run. If I were a Mayan despot, I'd be more likely to go and build pyramids. If I were Stalin, I'd truly destroy the environment of central Asia by diverting rivers. This should set off the BS detector right away.

Let's see what happened around 1300 AD when Greenland and the Anasazi collapsed. Europe got noticeably colder and wetter. The Southwest got noticeably drier. Heck, Greenland got covered with a whole new layer of ice. It's easy to sit in an office 700 years later and call people stupid. Especially if an academic is the one doing the calling. But sometimes bad things happen even when people do things intelligently. This is difficult for most people to handle. "Why do bad things happen to good people?" Then it quickly becomes a moral story....

I expected better from Diamond. At least he forced me to organize my thoughts on what bad pop-economics looks like. Even worse, he takes legitimate environmental issues and turns them into a charicature of something that the alarmists of the 1970s would turn out. This does responsibile conservationists a disservice, just as creationists on school boards do a disservice to responsible Christians.

Philip

Thanks, Chris. Very interesting thoughts. I do share your frustration. I like Diamond as an historian. And I loved his earlier book. He just doesn't seem to have thought carefully about some key points in economics this time around. His view in the op-ed, it seems to me,is typical of NYTimes writers. He is just telling us, casually, what everybody at the Times knows already (but no one bothers to think deeply about, let alone to prove.) While the folks at the Times know a great deal, a lot of what they know is false.

Zeratulss

24% of Americans believe that the Internet is able for a time to replace them with a loved one. For obvious reasons, such sentiments particularly prevalent among residents of the United States alone. Both men and women can replace the beloved, beloved trips to the World Network. However, the willingness to such transactions vary among followers of different ideologies: conservatives frowned relate to this idea, and the "progressive-minded" on the contrary, Nerkarat it.

Study company Zogby International also showed that every fourth resident of the United States have their own representation in the web-site or internet-stranichka. Creating internet-dvoynikov most passionate about young people (18-24 years of age) - 78% of them have personal Web page. In doing so, 68% of those surveyed said that the World Wide Web, they do not appear in its original capacity, their virtual overnight seriously different from the real.

Only 11% of Americans would agree implantable microchip in his brain, which would provide them with direct contact with the Internet. But the situation is changing, in the case of children. Almost every fifth resident of the United States would agree to equip their child safety device which would allow him to track the movement in space on the Internet.

10% of U.S. stated that the Internet brings them to God. " In turn, 6% are convinced that because of the existence of the World Wide Web God away from them.

And how you feel? Sorry bad English.

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