Bryan Caplan  

Practicing What I Preach: How I Fight Statistical Discrimination

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In a recent post, I said:

If you really want to improve your group's image, telling other groups to stop stereotyping won't work. The stereotype is based on the underlying distribution of fact. It is far more realistic to turn your complaining inward, and pressure the bad apples in your group to stop pulling down the average.

I'll admit that this sounds a bit harsh (maybe more than a bit). But before you write me off for my insensitivity, let me say that I follow my own advice. I'm a libertarian economist, and as a libertarian economist I face an array of negative stereotypes from mainstream economists, which in turn lead to statistical discrimination. Here are a few of the stereotypes:

1. Libertarian economists can't do math.

2. Libertarian economists are just ideologues.

3. Libertarian economists don't understand market failure arguments.

4. Libertarian economists are insufferable jerks.


There are roughly two ways I could try to defuse this problem:

1. Preach to mainstream economists: "Stop stereotyping us!" and pretend like there is no truth to these generalizations.

2. Preach to other libertarian economists: "Let's improve our image by improving ourselves."

I've been trying to do the latter for about a decade. For example, I wrote my essay "Why I Am Not an Austrian Economist" because I think that libertarian economists are disproportionately ideologues who don't understand market failure arguments. There's no use pretending it isn't so. (For another paper I've written against mistaken views common in libertarian circles, see here; see also my debate with Pete Boettke).

Telling mainstream economists "The stereotype is false because some libertarian economists don't fit it - look at Milton Friedman!" is scarcely better than naked denial. Obviously, every stereotype has exceptions; stereotypes are useful because they are better than nothing, not because they are infallible.

It's far more productive, then, for me to exhort other libertarian economists to not be ideologues and get a firm grip on market failure arguments. Fight the stereotype by making it less true, instead of pressuring others to ignore what's right in front of their faces.

Similarly, when libertarian economists make mathematical mistakes, I try to correct them. If it were just a random economist, I wouldn't bother. But when a libertarian economist maintains that utility functions are cardinal, he drags down our average math score.

Admittedly, there are limits to my strategy. Another stereotype of libertarian economists is that they oppose discrimination laws. It's true, but I wouldn't try to undermine the stereotype because I think it's the right position. Of course, I would like to undermine the stereotype that we don't have good arguments for this position by making good arguments, but that's a different matter.

So am I saying that discrimination against libertarian economists is basically just statistics, not disgust? That's going too far; as I've previously argued, non-profits such as universities are a lot more likely to let taste-based discrimination survive than for-profits. What I am saying is that libertarian economists should recognize that negative stereotypes about them are grounded in fact, and the way to fight those stereotypes is to change the facts.


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The author at Asymmetrical Information in a related article titled Fight discrimination the hard way writes:
    Bryan Caplan practices what he preaches: In a recent post, I said: If you really want to improve your group's image, telling other groups to stop stereotyping won't work. The stereotype is based on the underlying distribution of fact. It is far more re... [Tracked on September 29, 2005 7:36 AM]
COMMENTS (16 to date)
Mike Linksvayer writes:

Bravo!

Not understanding math may be peculiar to libertarian economists (and irrelevant for most laypeople), but the other three stereotypes are probably statistically true of libertarians in general.

I suspect I'm just embodying "[libertarians] are just ideologues" but one of the reasons I alot a good portion of my ranting to opposing immigration restrictions and military interventions is that an embarrassing number of libertarians are horribly and embarrassingly wrong (anti-immigration and pro-war) on these issues and I thus feel compelled to correct them. I'm sure Stalinists and Trotskyites feel the same way about whatever issues they disagree on. :)

Bryan, can one have "a firm grip on market failure arguments" and yet reject standard versions of the argument as anti-subjectivist (making "consumption" non-volitional) or non-falsifiable? When the market isn't providing Good X, how can we tell whether that's inefficient? I.e. how can we tell whether it's a case of market failure, rather than genuine lack of sufficient willingness to pay? Would you agree that (say) David Schmidtz has a firm grip on market failure arguments, despite being a libertarian?

Bill Woolsey writes:

The links to Boettke's papers don't work for me. I get an error message that I cannot get on the server.

spencer writes:

Maybe a little more intelligencial honesty would work wonders.

For example,Lynne Kiesling at the Knowledge Problem wrote a series of blogs taking the position that there was no such thing as
gouging. But she turns around and immediately wrote a blog accusing a Democratic Congress of gouging for charging $1,000 for a political dinner.

How can anyone that does that expect to be taken
seriously? And I am not even taking up the issue of does gouging actually exist or how she screwed up the issue of what was actually sold at the dinner.

John Thacker writes:

For example,Lynne Kiesling at the Knowledge Problem wrote a series of blogs taking the position that there was no such thing as gouging. But she turns around and immediately wrote a blog accusing a Democratic Congress of gouging for charging $1,000 for a political dinner.

How can anyone that does that expect to be taken seriously?

The first point is that post was not written by Lynne Kiesling, but by a guest on her blog, Michael Giberson. The second point is that it was obvious sarcasm, and not intended to be taken seriously-- rather as a criticism attempting to point out the absurdity of outside observers claiming that "gouging" occurred in a free transaction, because the "true price" should be something else. I don't think that it was particularly the most effective argument, nor phrased all that well, but a charge of hypocrisy against the poster is absurd.

John Thacker writes:

Also, Professor Caplan, you should spell "loses" correctly in the Abstract of your linked paper or else people are going to take you less seriously, fairly or not.

Randy writes:

Lawrence,

Exactly. Its not that I don't understand market failure arguments, its that I reject most of them.

P.S. Not really an economist or a libertarian. Though I often play one on the internet.

spencer writes:

OK, John I missed that it was done by someone else.

But I was not the only person to miss that it was
sarcasm. A whole series of comments discussed the issue seriously. The critism was centered around the point that it was political access being sold, not a dinner. But several people on the blog argued against that and agreed with the author that it was gouging.

Sarcasm is very hard to do in writing, and most people there completely missed it.

Bryan Caplan writes:

The Boettke links have been fixed. Thanks to Bill Woolsey for pointing out the problem.

John Thacker writes:

spencer,

You know, you're absolutely right about that. I shouldn't have said it was "obvious" sarcasm. It was obvious to me, but sarcasm is notably difficult to judge over the Internet. Without a good understanding of the author and context it is really easy to miss.

It's a good argument for avoiding sarcasm.

Steve Sailer writes:

Excellent post.

One thing libertarian economists need to do is be much more skeptical of their common assumption that open borders immigration is the same as free trade. Human beings come with a much broader set of externalities than do DVD players (to name a few, crime, medical scare, public schooling, cultural changes, freeway crowding, etc etc).

Perhaps a better model for thinking about immigration is thinking about hiring new employees at a company, especially an employee-owned one. The shareholders don't want too much hiring and they want management to be quite picky about whom they hire. They want them to search carefully for the people who will generate the greatest excess of revenue over costs for them.

Brad Hutchings writes:

OMG, I just spit brownie through my nose reading spencer's post. I didn't think Lynne's post was a particularly good troll when I read it, but man, it now gets a 10 in my book.

Brian, your essay, "Why I am not an Austrian" could be called "Why Brad is not an economist". I really cannot believe that Austrians and mainstreamers are arguing over calculus. Actually, I can believe it. This is forest through the trees thinking. You're not even arguing over math, per se, but one modeling technique that has worked its way into advanced high school math, and hence, eveyone's vocabulary. It's like you guys are arguing over a screwdriver.

As a guy with a masters in computer science, specializing in algorithms and data structures (what some call theoretical CS) and even more specialty in something called graph theory (think networks with nodes and edges, not "graphs" of functions), I think the Austrians have the right insight, but haven't found the right tool. The right tool is to look at networks and flows and use mathematical models to evaluate them. Think of your train station example from that paper. All the Austrians need is a little graph theory and then they have a mathematical model to frame their observations and make meaningful conclusions!

The functions and the calculus don't explain squat. Ask Arnold if he ever tried to intersect demand and supply curves in running his business. What you actually end up doing, as a rational actor, is trying to have capacity that meets demand over time without having too much excess capacity. That isn't a curve, but discrete steps that take tremendous planning, investment, and execution to reach. With enough actors working this way, things start to look like a continuous function curve in whole, but you're probably a lot better off using tools from discrete mathematics that have found their home in theoretical computer science to make sense of such systems than using multivariate functions. Just like you're better off using the right sized boxed-end wrench to remove an oil drain plug than you are using a pair of pliers or a crescent wrench. Know what I mean?

nobody writes:

Too funny, just after reading this, I came across a post on Karen DeCoster's blog where she wrote the following:

In the fall, I'll brush up on my advanced math - trig, calc, econometrics [snip]

http://www.karendecoster.com/blog/archives/001732.html

Trigonometry as advanced math?

I'm actually a fan of Ms. DeCoster, but she does sometimes seem to fit into the mildly-crazed ideologue/Rockwellian-Rothbardian-Austrian portion of the libertarian blogosphere.

I generally differentiate between the sensible Misesean Austrianism and the (IMHO) more-crazed Rockwellian-Rothbardian Austrianism)

Glaivester writes:

One thing libertarian economists need to do is be much more skeptical of their common assumption that open borders immigration is the same as free trade. Human beings come with a much broader set of externalities than do DVD players (to name a few, crime, medical scare, public schooling, cultural changes, freeway crowding, etc etc).

In all due fairness, though, Austrian-school libertarian economists are not usually for open borders.

paul writes:

Brian, don't be so defensive. For the most part, academic economics is a sterile pursuit. Look at how the real world values economists. They are bad story tellers used to fill up time during client meetings and very expendable during recessions. If academic economists were really insightful, they would clean up their own institutions first. Then maybe they would start asking interesting questions.

wkwillis writes:

That depends. For instance, we nerds could learn to be more people sensitive with training. That's because the "insensitive nerd" stereotype is fact.
On the other hand, the "Jews eat babies" stereotype in Germany in 1942 is not something you can battle by handing out vegetarian cookbooks at synagogues. The proper way to fight that stereotype involved carpet bombing Berlin.

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