Bryan Caplan  

Critical Review Symposium on My Book

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The Sophistry of the Balanced ... The Best of Times, the Worst o...

The latest Critical Review is a full-issue symposium on The Myth of the Rational Voter.  Stephen Bennett and CR editor Jeff Friedman lead off with a novella-length frontal assault on the book.  Then there's seven more critiques from David Colander, Elster & Landmore, Gerald Gaus, Kiewiet & Mattozzi, Arjo Klamer, Paul Quirk, and Wittman.  I then respond to one and all.  My favorite parts:

From my reply to Bennett and Friedman

We don't need to know everything about something to estimate the value of learning more about it. In many cases, we barely need to know anything at all. For example, almost everyone deletes spam email unread. If we accept BF's argument, this practice is a deep philosophical error. After all, how do we know that a given piece of spam isn't worth our time unless we actually read it? Indeed, unless we send him the money, how do we know that a random Nigerian's offer to split an inheritance isn't the path to untold riches?

N.B. Jeff Friedman's not too happy with my interpretation on his position.  If he likes, I'd be happy to post his response to my response on EconLog.

From my reply to Gaus

Gaus has high standards for useful advice. First, useful advice requires detailed empirical study: "Unless policy makers have a good way to predict the magnitude of the costs and benefits, they cannot have a sound basis for advocating or opposing the policy" (Gaus 2008, 15). Second, useful advice requires detailed empirical study of many things: Advisors must "factor in all the relevant, real-world variables" (ibid., 10) as well as "the complex interaction of different variables" (ibid., 12)

By Gaus's standards, economists (and experts generally) do not measure up. Even on relatively simple questions, "the experts' poor absolute levels of prediction . . . is really striking" (Gaus 2008, 17). If you take the problems of omitted variables and interaction effects seriously, good advice is effectively impossible: "We seldom if ever know all the relevant variables" (ibid., 10), and even if we did know all the relevant variables, "it is usually impossible to predict how they will interact" (ibid., 12)

Gaus's arguments prove too much. They don't just rule out useful policy advice; they rule out useful advice of any kind. For example, suppose a student asks me if he should go to grad school. By Gaus's standards, to "have a sound basis" for my advice, I would need fairly precise estimates of the magnitude of the costs and benefits of all the relevant, real-world variables and their interactions. I don't have that. No one does.

I take this to be a reductio ad absurdum: If your standards imply that useful advice is impossible, something is wrong with your standards.

From my reply to Wittman

Wittman could grant all these points, but respond, "I'm still not convinced that the disagreement between economists and the public is big." To get some perspective, I calculated belief gaps between laymen of the far left (very liberal Democrats) and laymen of the far right (very conservative Republicans). For the SAEE's 37 questions, the average absolute value of this belief gap is .30 on a 0-2 scale.  I also calculated belief gaps between Ph.D. economists and the general public.  All else equal, the average absolute value of this belief gap is .52. In other words, the belief gap between economists and the public is more than 70 percent larger than the belief gap between America's far left and far right. If that isn't big, what is?

If a steady diet of snack-sized blog debates have left you hungry for heartier fare, the latest issue of CR is for you.  But you'll probably have to actually buy the journal to partake - it's not online.


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COMMENTS (6 to date)
Kevin writes:

Dearest Bryan,

Ok, ok, I know I'm Gerald Gaus's student, but I have to say that your response to Jerry won't do. Jerry would never hold that the standards of evidence that apply to micro level advice-giving are the same for macroeconomic policy design (as your analogy implies). The idea is that if you're going to engage in public policy, which uses coercion to affect millions and sometimes billions of people, you'd better have some reasonably justified belief about the outcome of the coercion you're going to use. At the macro level, Jerry thinks this is really hard to achieve. The fact that economists agree on so little is evidence of this view.

You can't compare it to small-scale advice-giving. It's going to be pretty different. It's like Hayek says in his Nobel address - the problem with economic modeling at the macro level is that - as opposed to modeling in physics - you have an enormous number of variables. You don't have an enormous number of significant variables at the micro level.

Dan W writes:

Thanks for the heads up - I'm looking forward to reading the whole edition.

FWIW, it is online (albeit gated) - you can find it here, hopefully: http://www.informaworld.com/smpp/title~content=t778142998~db=all

Tim writes:

I guess it depends on how we define "far left" and "far right". (Is that by self-identification?) There's a lot of political overlap between the far left and the far "right". Take immigration: Many on the far left are opposed to immigration because they fear competition and market forces which left-wing Democrats and the unions see as threat to the job security of low-income working class whites. Many on the far "right" are opposed to immigration as well, though probably for slightly different reasons, mainly cultural. Or take free trade: Left-wingers tend to be opposed to free trade for economic reasons ("American workers lose their jobs", "Corporations exploit third-world workers", "Trade deficits harm our economy" and other economically illiterate claims). Some "right"-wingers (though they're not truly right-wing as I would define the term) may oppose free trade for cultural reasons.

John Edwards or Dick Gephardt on the left and, say, Pat Buchanan on the "right" could certainly agree on a lot.

If you however compared left-authoritarian Democrats like Edwards or Gephardt (or indeed many politicians in Obama's administration) on the one side and right-libertarian Republicans like Ron Paul, Jeff Flake, Paul Ryan, Bobby Jindal, Jeb Bush on the other side I guess there would be a much bigger difference than .30 on a 0-2 scale.

Tim writes:

Upshot: How about calculating the belief gaps between laymen who are "very libertarian" and laymen who are "very authoritarian"? My assumption is that there will be a much bigger economic belief gap between "very libertarian" and "very authoritarian" than between laymen who are "very left-wing" and those who consider themselves "very right-wing" (many of whom are far from being libertarian conservatives or Burkean conservatives).

Patri Friedman writes:

Kevin, that may be the idea, but it's a bogus idea! Public officials need to make some decision (doing nothing is a decision). Those advising them need to recommend some course of action (recommending the status quo and staying quiet are both actions). The idea that you have to be really sure in order to say anything is just bogus.

Among other things, those who follow your advice will be underrepresented in the sphere of opinion, leaving those willing to give advice even when uncertain to dominate the discussion. Do you really think that the bailout discussion would be better if it consisted only of people who are confident about what action we should take?

The bigger the sphere, the more important it is that we act correctly using whatever information we have. Reasoning under uncertainty is difficult, sure, but giving up on hard problems because the stakes are big does not strike me as much of an answer.

Whether the stakes are big or small, the best we can do in any situation is to accurately take into account all available information and make our best guess. You have so far failed to demonstrate why this case is a special exception.

Patri Friedman writes:

p.s. I should add - if the status quo bias was to do no coercion, I would find the viewpoint that we should not recommend coercion unless we are sure of a positive outcome much more reasonable. But if you think the current status quo in macroeconomics in the United States is to not coerce...you are living in a different country than the rest of us!

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