Bryan Caplan  

The Subtle Value-Added of Frederic Bastiat

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Yglesias's Off-Target Critique... Low Transfer of Learning: The ...
I'm delighted to get Matt Yglesias talking about Bastiat, but I'm afraid he's missing my point.  For Matt, Bastiat's writings are "non-responsive to modern issues."  Matt's example:
The candlemakers' petition is a devastating satire of pharmaceutical companies' endless lust for patent rents, unless you happen to think that pharmaceutical patents and the monopoly rents they generate are a crucial engine of R&D funding and life-saving research. Are the pharmaceutical companies right? I think it's questionable, but I also don't think you'll find the answer in Bastiat.
I completely agree - and I'm confident that Bastiat would as well.  The point of Bastiat isn't to evaluate complex economic policies.  The point is to dispel belief in popular but inane arguments that prevent most people from seriously evaluating complex economic policies. 

If you suspect I'm reading too much into an old book, carefully read what Bastiat says at the end of Economic Sophisms:

After all, my aim is not to inspire convictions, but to raise doubts.

It is not my expectation that when the reader puts down this book he will cry out, "I know!" Would to heaven that he might honestly say to himself, "I don't know!"

"I don't know, for I am beginning to fear that there may be something illusory about the alleged blessings of scarcity." (Sophism I.)

"I am no longer so enthusiastic about the wonderfully beneficial effects of obstacles." (Sophism II.)

"Effort without result no longer seems to me so desirable as result without effort." (Sophism III.)

[...]

"Therefore, without considering myself altogether satisfied by his arguments, which I am not sure whether to regard as well reasoned or as paradoxical, I shall consult the experts in this science."

Bastiat's essential claim: the economic arguments that the public habitually makes are "non-responsive to modern issues."  Indeed, the economic arguments that the public habitually makes have always been "non-responsive to modern issues."

Bastiat's primary mission is to take popular but inane economic arguments off the table of democracy.  If there are good arguments for the minimum wage, Social Security, or the FDA, they aren't the arguments that convince the public.  Before we can even begin to earnestly consider the case for these policies, though, we must intellectually reboot.  We have to thoroughly purge popular but inane arguments from our thinking, then suppress the residual emotions that popular but inane arguments initially inspired in us.

No offense (clearly!), but Matt lives in a Bubble.  He's a policy wonk.  He spends a lot of time thinking deeply about complex economic issues.  He spends a lot of time talking to other people who do the same.  Why should he read Bastiat?  To step outside his Bubble and see the ludicrous ideas that rule the world.  Outside of Matt's Bubble, people think about complex economic issues in utterly simplistic ways.  They love a long list of arguments that are truly absurd.

Bastiat's value-added: He elegantly exposes popular arguments' absurdity, then reminds us that public policies are based on popularity, not truth. 

My value-added: Building on Bastiat's giant shoulders, I point out that most wonks used to be normal people.  They initially embraced popular policies for absurd reasons.  It is remarkable, then, that wonks continue to largely support the same policies as normal people. 

It's admittedly conceivable that wonks discovered intellectually serious substitutes for almost all of the mock-worthy arguments the public loves.  But a more plausible story is that few wonks truly free themselves from their emotional attachment to popular policies.  So instead of weighing whether e.g. Social Security is genuinely a good idea, they use their powerful intellects to defend Social Security to the best of their abilities. 

As David Henderson points out, there's nothing "conspiratorial" about my story.  Imagine a society where almost everyone believes in God because "Someone had to create the universe."  In his youth, the typical intellectual in this society found this argument convincing.  Now that he's older and wiser, he sees the popular argument's absurdity: "If someone had to create the universe, didn't someone have to create God?"  Yet these same intellectuals are almost as religious as the rest of the population, and spend their days fine-tuning subtle arguments for God's existence. 

My hypothetical hardly suggests a conspiracy.  But the intellectual culture I describe is extremely suspicious nonetheless.  Yes, the subtle arguments for the existence of God might be incredibly compelling.  But isn't it more likely that these intellectuals are just rationalizing and mutually reinforcing the religious viewpoint they've loved for as long as they can remember?



COMMENTS (17 to date)
Joe Cushing writes:

You must assume a large portion of your audience is made up of agnostics and atheists. Otherwise you know that logic at the end of your post would just fly right over their heads for the very reasons you talk about in this post. I wonder if your assumption is correct.

Arthur B. writes:

Yglesias totally misses the point, too bad. For the sake of the conversation, here's a plausible liberal defense against your argument that doesn't.

People have the right idea intuitively, they just don't know how to properly formalize it. Bastiat only shows that the way people formalize their intuition isn't fully rigorous, this isn't particularly interesting.

For instance, the common man who worries about technology displacing jobs has the right idea, and he wouldn't suggest blocking out the sun. By taking generally correct (but imprecise) popular wisdom on economics and logically extending to absurd conclusions, Bastiat is being autistic and only defeats a strawman.

Liberal economist care a lot more about formalization and rigor, so they give the rigorous justification for intuitively good policies like the minimum wage, immigration restriction, progressive taxation, etc. The common man doesn't need to understand the details these justifications to get the right idea.

RickC writes:

So Arthur B,

You're saying, or whoever you are quoting is saying, that liberal economists start with the "right" ideas and work their way to conclusions that support those ideas?

Mike W writes:

As a liberal, here is my preference hierarchy for how other people think about economic issues:
1) (best) people have well-informed opinions and support liberal policies,
2) people have well-informed opinions and support conservative policies,
3) people have poorly informed opinions and support liberal policies,
4) (worst) people have poorly informed opinions and support conservative policies.

Matt's claim is that Bastiat moves people from 3 to 4. If I'm reading you right, you agree with him! You're noting that Bastiat explicitly notes that he's not raising the level of the debate by informing people about deep, specific policy issues and helping them to be good wonks.

Now, maybe you prefer that people are in 4 rather than in 3, but if that's where we've ended up, then I think we have a strong understanding of why liberals don't particularly care for Bastiat! What you should have to prove, to ensure that liberals like Bastiat, is that Bastiat moves people from 3 to 2 or 1. I think you have failed to do that.

I, unlike you, grew up among unthinking conservatives rather than unthinking liberals. A mix of religious schools and an extended stint in Idaho. Unthinking conservatives often essentially know Bastiat's arguments and use them as 'magical thinking': i.e. I can't marshal any evidence about the effect of the minimum wage, but it's a regulation, therefore it will lead to (unseen, underestimated by evil central planners) bad consequences. Your job should be to show that reading Bastiat would not lead to this sort of unthinking conservatism.

Arthur B. writes:

RickC, I used a quote to distance myself from the argument and make it clear I'm playing devil's advocate.

You're saying, or whoever you are quoting is saying, that liberal economists start with the "right" ideas and work their way to conclusions that support those ideas?

Yes, that's the argument a liberal economist could make: liberal policies are intuitively good, from experience, from heuristic considerations, but economists being scientific people, they like to show rigorously why this is true. This involves a more complex argument than most people would make, but that doesn't mean people don't get the right idea overall.

Charlie writes:

"Why should he read Bastiat? To step outside his Bubble and see the ludicrous ideas that rule the world"

Reading Bastiat is a terrible way to do this. It was written 200 years ago. A much better way to do that is to read the paper and see the arguments people actually make. Yglesias does that everyday, and a good portion of his job description is ridiculing poorly reasoned arguments.

If you already know that bad arguments are bad, then Bastiat has little to no value.

Bastiat is enlightening when you're 17, but trivial by the time you've reached wonk status.

Bill Nichols writes:

Arthur B.

Congratulations on passing the Turing test!

Greg G writes:

Yes it's true that people often think about complex economic issues in utterly simplistic ways. They sometimes even reason about the national budget as if it were a household budget and talk about complex economic issues with analogies to a barter economy.

Gene writes:

Charlie, you did read Bryan's post, right? Where he said,

I completely agree - and I'm confident that Bastiat would as well. The point of Bastiat isn't to evaluate complex economic policies. The point is to dispel belief in popular but inane arguments that prevent most people from seriously evaluating complex economic policies.

Almost every person I know (and that group is overwhelmingly college-educated, by the way) believes all or almost all of those ignorant, "simplistic" economic truths. And my experience is anything but unique. Our educational system, except for those higher-ed programs in economics or business disciplines, does a poor job of teaching economics, which is why most Americans are economically illiterate. It's sad that there is still a need for what Bastiat is teaching, but that need exists.

jc writes:

Re: your value-added

A + B = C

A = Orwell: "There are some ideas so wrong that only a very intelligent person could believe in them." (Modifier: once inane arguments have been debunked.)

B = Pinker: "The conscious mind—the self or soul—is a spin doctor, not the commander in chief."

C: The more grey matter you have (progressive or conservative), the better you are at rationalizing and providing a veneer of academic legitimacy for your beloved ideas, the better you are at filling that frantic, angry urge to prevent having to give up and lose your beloved ideas, searching for an intellectual life preserver like a junkie hunting for his next fix, hating the heathen that try to prevent you from reaching that life (idea) preserver.

What's Planck's old saying (short version), not about laymen, but about those of us trained to dispassionately examine issues via rational, scientific inquiry? (He, like Bryan, was perhaps less optimistic than Shermer in the link above.) "Science advances one funeral at a time."

Charlie writes:

Gene,

I agreed with that part. That part specifically didn't apply to Matt (or other left leaning economists and wonks). I addressed the reason Bryan gave that Matt and other lefty economists should be more enamored with Bastiat. I don't think his reason holds up well at all.

Would it help you to see the whole quote? Please read for content. The "he" refers to Matt Yglesias.

"Why should he read Bastiat? To step outside his Bubble and see the ludicrous ideas that rule the world. Outside of Matt's Bubble, people think about complex economic issues in utterly simplistic ways. They love a long list of arguments that are truly absurd."

Seth writes:

@Mike W -- Far too many people think they are in 1) or 2) but are really in 5).

Dan Carroll writes:

Likewise, too many athiests were swayed by simplistic and inane arguments while in college against a poor understanding of their own received faith or of the faith of others. Very often, however, the most militant atheism arises from emotional critiques of the church, and indeed the initial impulse was deeply personal. Many have gone on to sophisticated rationalizations of their beliefs as their intellects developed.

The hatemail that I receive when making these kinds of comments offers further confirmation of those observations.

The same arguments could be made of liberals and conservatives, or of economists and humanities professors.

However, whether sophisticated arguments are rationalizations or not is irrelevant. All of our arguments are rationalizations to some degree, because once we reach the point of sophistication and nuance, we have too much invested in the framework to back down easily. None of us are objective truth-seekers, and if one believes he is, then his biases are most dangerous and his ignorance is profound. Our biases are important to understand ourselves and our own intellectual weakness, but what is most relevant is the truth and error contained in our arguments.

Yancey Ward writes:

Dan Carroll nails it, and by using an observation I have made myself (and I write this as someone who essentially an atheist).

a Racoon writes:

intellectuals are just rationalizing and mutually reinforcing the ... viewpoint they've loved for as long as they can remember?

Anyone recommending what we, as a society, ought to do is guilty of that. There is no objective reason why I should do what you think I (as part of the we) should do. Arthur Leff wrote this up beautifully. Or, as Daniel Kahneman wryly put it, "You need to have studied economics for many years before you’d be surprised by my research; it didn’t shock my mother at all.”

Who cares, you might ask? Kahneman, Pinker, Orwell, Leff and others "elegantly expose popular arguments' absurdity, then remind us that public policies [and claims of experts] are based on popularity, not truth."

ThomasH writes:

I think Matt's problem is that Bastiat is addressing fallacies of making policy assuming that there are idle resources when there are not. Matt is more focused on the fallacies of making policy assuming there are no idle resources when there are. With unemployment and an accommodating central bank protectionism (the candle makers) and make-work projects (broken windows) do lead to improvements in welfare, so Bastiat gives the wrong answers for the "modern conditions" Matt has in mind

Russ Wood writes:

Matt Yglesias focused on a straw man: in fact, nobody claims that Bastiat's writings contain all answers to all modern problems. In doing so, Yglesias ignored the thrust of Mr. Caplan's post, which was that Bastiat is a witty and effective counter to lots of bad economic thinking.

Bad economic beliefs are significant: if the voting public (who ultimately, though very indirectly, decide policy) remains confused in its economic thinking, then political debate will almost unavoidably tend toward demagoguery. See, e.g., almost all Democrat responses to any proposal to reform either Social Security or Medicare. The Repubs do the same on other issues, though (I think) with less frequency.

Messrs. Caplan and Bastiat are correct: if we want better results from public policy, we need better argument about the policies. The era of sound-bite politics gives the politicians little opportunity or incentive to elevate the debate. Our schools clearly are dropping the ball. It looks like we need a Gates Foundation for Economic Literacy, or perhaps that's where much of the stimulus should have been spent.


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