October 5, 2007
Arnold Kling
Tyler Cowen makes 8 remarks about journalism. The one that most reinforces what I believe is:
Journalists tend to favor visible stories and neglect invisible opportunity costs and invisible hand mechanisms, which often but not always puts them against the side of the market.
Journalists write stories. The best stories have villains and victims. The villain-victim framework is often ill-suited to capturing economic phenomena. So that while Shannon Brownlee's Overtreated is praiseworthy in she does not blame the usual villains, it is still constrained by the villain-victim framework. I still owe the book a full review, so I need to resist going on at length here, but...
One example is that she thinks that managed care has the potential to be more efficient than our current fragmented system. Fine. But as an economist, I am inclined to ask why the market has not evolved toward managed care. My tentative hypotheses are (a) managed care may be only efficient for a few people, namely those with complex ailments, such as diabetes; (b) managed care can achieve only a small fraction of its potential efficiency given our current medical licensing laws, which micro-manage the process of delivering medical services. Instead of thinking along those lines, Brownlee speaks in terms of villains and victims.
Anyway, back to Tyler. His comment that most made me go "Hmmm...." was
Most journalists work in a declining sector -- newspapers or TV -- and this does not augur well for their belief in progress and the virtues of economic growth. They are not well-positioned to enjoy "creative destruction."
I suspect that journalists have catered to what Bryan calls "pessimistic bias" for a long time, even when the news business was thriving.
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In Knowledge & Decisions homas Sowell calls this villain-victim style the 'animistic fallacy' as contrasted with 'systemic' thinking.
Animism is, of course, the spontaneous human mode of thinking. We were all animistic children, and in the hunter gatherer societies in which humans spent 90-something-percent of their evolutionary history - animists we would have remained, all our lives.
Everything is about story. That's why we humans are often called homo-narratus.
Most economics is just a set of stories, some good, some tenuous.
Journalists--e.g. Faux news and their "Market up as we head towards confrontation with Iran" are simply more aggregious forms of what is a natural human characteristic.
Consider this blog: socialists are the always the villains and libertarians the good guys. The same good-guy/bad-guy analysis holds for economic blogs as for journalism.
General Specific -
That explanation sounds plausable, can you suggest any potential solutions?
N: "That explanation sounds plausable, can you suggest any potential solutions?"
Qualitatively, I think people have to step aside from their ideological predispositions. Easier said than done--and I point at myself when saying that.
Quantitatively, I think we have to rely on numbers, prediction, and accountability. For example, I don't agree with everything James Hamilton says. But he argues with numbers, makes predictions, and then says "I don't know" when the numbers don't say anything, even if his own predispositions lean in a particular way. When he argues economics, he doesn't argue ideology, he argues numbers. Truth in a sense, though as Kling points out, even arguing numbers requires a selection process.
The problem is that the world is not lead by truth. It's lead by good stories. My experience: companies are lead by people who have positive track records but in addition (a) they're good at constructing plausible stories and (b) also good at over-powering, over-arguing, and out-witting those with competing stories--directly or behind the scenes. They're tricky. Go into a room full of people trying to make a decision. In the battle of leadership and ideas, the more forceful person often wins--not the right ideas.
Does the person with the best story have the right or true story? Not necessarily. The market will answer that question when the story is badly wrong, but often the story is not right but also not too bad. The better--more true--story lost because the louder more powerful story won out.
In the end it's all about power. And power needs balance and accountability. Because power isn't true. It just is. Unless one defines truth as power. Some have.
I'd like to see more accountability for bloggers, journalists, politicians, etc. Openness and exposure to competing ideas--and a public track record that we can evaluate. The internet will help with that. But the internet is also full of noise--people spouting opinions--like mine right now. It would nice to see a clearing house of stories, with a quantitative means to establish their accuracy and success. A true market of ideas that includes an SEC-like report. It would also be nice to see the same people who go after Naomi Klein also going after William Kristol. Both are no-doubt fountains of half-truths and nonsense in support of their ideological predispositions.
General Specific, read mises.org or lewrockwell.com
There are plenty of people who attack both Mrs & Mr K if you look for them.
What is it about the market that causes it to accept bad-but-not-too-bad stories and what corrective forces would be immune to those same faults?
The other common journalistic tendency is the 'balanced' approach of contrasting opinions, pretty much the 'one the one hand .., and on the other ..' without an indication of importance, likelihood, or number, and usually staying at that level.
All stories are morality plays...
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