Bryan Caplan  

An Urgent Defense of Optimism

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At the most general level, Tyler's recent posts on what he calls the "Fallacy of Mood Affiliation" are excellent.  Except... I know from lunch that he sees me as a great example of the Fallacy.  When he speaks of...

People who see a lot of net environmental progress (air and water are cleaner, for instance) and thus dismiss or downgrade well-grounded accounts of particular environmental problems.  There's simply an urgent feeling that any "pessimistic" view needs to be countered.

... he's got me in mind.

Tyler's right, I confess, that I often get an "urgent feeling" that pessimism must be countered.  I have such a feeling right now.  But if we accept the premise that there has been "a lot of net environment progress," BETTER THAN PEOPLE THINK deserves to be the headline until the fact of net progress is common knowledge.  Until that day, even well-grounded problems should be "downgraded" in the sense that they're framed as exceptions.  This is basic pedagogy: First teach the Big Picture, then - if there's time - point out leading counter-examples.  If Tyler had followed this approach when he wrote The Great Stagnation, he wouldn't have to complain about being "misunderstood." 

Tyler also neglects the possibility that an optimistic presumption might be empirically grounded.  As I've explained before:

I'm skeptical about all predictions of disaster. I'm predictably skeptical about doom-and-gloom predictions used to rationalize big expansions of government power: global warming, overpopulation, avian flu, resource depletion, terrorism, nuclear proliferation, "Mexifornia," etc. But I've also long raised my eyebrow when libertarians predicted a Clintonian coup, hyper-inflation, or an American re-run of the Weimar republic.

There's not enough time in the day for me to know enough about all of these disasters to doubt them on their specific merits. But I do it anyway. How do I justify it?

...The fact that we've gotten as far as we have shows that true disaster must be extremely rare. Unless fears almost always failed to materialize, we'd already be back in the Stone Age, or plain extinct. It's overwhelmingly unlikely that we've gotten lucky a million times in a row. Thus, unlike my co-blogger, I think there is a good reason to expect global warming models to be milder than models predict. Namely: As a rule, disasters are milder than predicted.
One last point: Tyler conveniently overlooks the moods that tie most of his views together: love of ambiguity and sheer contrarianism.  I'd like to see him argue that a presumption in favor of these moods has the facts on its side.


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COMMENTS (13 to date)

Our bodies con certainly suffer from sudden catastrophic disasters. But an economy is a large, complex, and diffused phenomenon. I'm afraid the pessimistic bias comes from extrapolating from our own health to much wider orders.

In the Fall of 2008 some people were predicting catastrophic events (no cash in ATMs etc...) as if the economy was likely to suffer a stroke.

Bob Murphy writes:

Is it just me or is there a lot of GMU catfighting lately? I'm not judging, just observing.

Pandaemoni writes:
BETTER THAN PEOPLE THINK deserves to be the headline until the fact of net progress is common knowledge.

I don't know that I'd want to run my business on that model. I know, from day to day, that we are almost certainly doing reasonably well, though I have no idea precisely how well at any given moment. Pessimism thus drives me to ferret out as much waste and abuse as I can—to focus on the elements that I can tell could be improved. "BETTER THAN I THINK" is a useless headline, because the real headline remains "THINGS COULD BE BETTER, SO KEEP WORKING AT IT!"

Plus, optimism leads to shocks that good balanced pessimism avoids. If you optimistically assume that people are generally good drivers, then--invoking Alain de Botton (himself invoking Seneca and strong;y reminiscent of Boethius's argument in Consolation of Philosophy that misfortune can be better than good fortune), what frustrates and angers is is when our expectations are violated in a way that leaves us worse off than we expected. What delights us, conversely, is when things work out better than our expectations. Assuming frustration is something we want to avoid and delight is something we want to experience, that suggests setting our expectations low is the best strategy. (Of course, we shouldn't set them so low that we sink into a depression and neglect the rest of life, but within reason, I think it holds up.)

Daniel Klein writes:

Just as one can be intemperate in his courage, ambition, compassion, charity, pride, and less-than-encompassing forms of justice (such as commutative justice), can one be intemperate in his temperance?

agnostic writes:

Survivorship bias.

Plus, to take one example purely at random, the Big Picture of the mid-'80s through the mid-2000s was the Great Moderation. I mean, c'mon, how likely is it that the monthly statistics had gotten so good through sheer luck for 240 months in a row, or that hourly statistics had mellowed out through sheer luck for 175,200 hours in a row?

All right, now that we've impressed on the public the most important take-home message of the Great Moderation, we can sneak in an appendix about the recent blow-up that wiped out the illusory gains and then some from the go-go years.

agnostic writes:

Asymmetric costs of optimistic error vs. pessimistic error -- the former can wipe you out entirely, the latter can only depress your standard-of-living.

Like, how many rats have poured into Europe before 1347 that nobody had to worry about? So why bother lowering our standard-of-living by devoting time, effort, and resources to some kind of customs office that tediously and expensively inspects the rats coming in on ships loaded with spices, silks, and all other kinds of cool stuff?

Ben writes:

I think Tyler's biggest mistake is to refer to this as a fallacy. It's not a fallacy; it's a bias, and everyone's guilty of it.

The bias can't hurt you, so long as you recognize it, recognize it's not universally shared, and act accordingly. All these biases are empirically grounded, but different people have perceived different evidence, so their biases differ.

rpl writes:

Agnostic,

1) I don't think the size of our sample of civilizations (particularly industrialized civilizations) is big enough that survivor bias comes into play.

2) Anybody who treats monthly, let alone hourly statistics as independent and identically distributed for statistical purposes deserves to come to grief. The effective sample size in your example is way smaller than the numbers you quote.

3) Citing the financial crisis as a counterexample is precisely the sort of pessimistic bias Bryan is talking about. The crisis has caused no small amount of hardship, but it's hardly civilization-ending. The doom and gloom scenarios about worldwide collapse simply didn't happen.

4) Will you apply your reasoning about plague rats to all threats that anybody might dream up, however far-fetched, or just the ones that experience has shown to have some basis in reality? If you do the former you wind up spending all of your civilization's resources jumping at shadows, not to mention looking foolish in the process (q.v., Homeland Security, Department of). A little dash of optimism seems the wiser course.

hsearles writes:

I agree with Ben, Cowen's fallacy is simply not a fallacy; in fact, it is an abuse of the term. A fallacy is an error in discursive reasoning, the "fallacy" of mood affiliation is not an error in reasoning. Instead, as Ben pointed out above, it is simply a bias and a error in weighing premises. If it were a true fallacy, the fallacy of mood affiliation would look something like.

1. It is the case that there is an economy.
2. Optimism is the right mood.
----
3. Therefore, there is no Great Stagnation.

However, I think one would be hard pressed to actually cite an argument by a reputable scholar that has such a form.

Tyler cowen writes:

Almost all the reviewers understood the book, my complaint was that YOU misunderstood me.

Steve Sailer writes:

I'm not an optimist or a pessimist, I'm an opportunity costist.

Philo writes:

Our ancestors never produced a real disaster--else we wouldn't be here. But our capacity for creating disaster looks, in some ways, to have grown considerably over time, making the probability of disaster higher than ever before.

Ronny writes:

How is it possible to leverage economies (Like Iceland and Ireland) so many times?

Is it a good example of over-optimism?

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