The problem of prosocial lying in the economics profession(duckofminerva.com)
duckofminerva.com
The problem of prosocial lying in the economics profession
https://duckofminerva.com/2020/11/ignoble-lies-the-problem-of-prosocial-lying-in-the-economics-profession.html
99 comments
I'm curious how you relate this to the emergence of statehood. For modern states to exist there needs to be some state-level understanding of concepts like inflation, fiscal policy, central bank interest rates etc. and at the moment it seems like most of that knowledge is best understood by the economics profession.
If all economists disappeared, surely we would all be worse off in the long run?
If all economists disappeared, surely we would all be worse off in the long run?
The idea that the state needs to pull levers in order to manage things like inflation and interest rates isn't supported by all economists.
It's definitely not supported by the Austrian school.
It's definitely not supported by the Austrian school.
You don't even have to go to the Austrian school.
You can find slightly more mainstream economics about privately issues currencies as well. Look into the economic history of Canada or Scotland during their free banking era.
(Ironically enough, fractional research banking is crucial to the stability of free market money and banking, but Internet Austrians seem to hate it.)
See also https://www.alt-m.org/2015/07/29/there-was-no-place-like-can...
You can find slightly more mainstream economics about privately issues currencies as well. Look into the economic history of Canada or Scotland during their free banking era.
(Ironically enough, fractional research banking is crucial to the stability of free market money and banking, but Internet Austrians seem to hate it.)
See also https://www.alt-m.org/2015/07/29/there-was-no-place-like-can...
The state or its bank largely has to set interest rates to something - it gets to choose central bank deposit rates and bond coupons. It doesn't get to set yield (that's set at auction) but it has to set the bond payout to something.
The question then arises as to whether the state has a responsibility to manage inflation and unemployment.
The question then arises as to whether the state has a responsibility to manage inflation and unemployment.
> The state or its bank largely has to set interest rates to something - it gets to choose central bank deposit rates and bond coupons. It doesn't get to set yield (that's set at auction) but it has to set the bond payout to something.
The Monetary Authority of Singapore doesn't do anything about interest rates. Neither does the equivalent institution in Hong Kong.
The policy lever in Singapore is the foreign exchange rate. In Hong Kong, they more or less just fix the exchange rate to the USD.
Singapore happens to have lots of government debt for weird reasons. Hong Kong has almost none. (And you could easily imagine a version Singapore without government debt.) So there wouldn't necessarily be deposit rates or bond coupons to set at all.
In general, economies also don't need central banks. Many economies do just fine without them.
Good examples today are lots of smaller economies that just don't bother with their own currencies, the process is commonly called 'dollarisation'. But historically we also had examples of successful large economies with privately issues means of payment and minimal government regulation. The free banking episodes in eg Canada, Scotland or Australia are well documented.
The Monetary Authority of Singapore doesn't do anything about interest rates. Neither does the equivalent institution in Hong Kong.
The policy lever in Singapore is the foreign exchange rate. In Hong Kong, they more or less just fix the exchange rate to the USD.
Singapore happens to have lots of government debt for weird reasons. Hong Kong has almost none. (And you could easily imagine a version Singapore without government debt.) So there wouldn't necessarily be deposit rates or bond coupons to set at all.
In general, economies also don't need central banks. Many economies do just fine without them.
Good examples today are lots of smaller economies that just don't bother with their own currencies, the process is commonly called 'dollarisation'. But historically we also had examples of successful large economies with privately issues means of payment and minimal government regulation. The free banking episodes in eg Canada, Scotland or Australia are well documented.
> economies also don't need central banks. Many economies do just fine without them
.. until you need a lender of last resort.
> lots of smaller economies that just don't bother with their own currencies, the process is commonly called 'dollarisation'
Also the Eurozone. And there we saw what the risk is under a real shock of having debt in externally-controlled currency.
Describing dollarisation as being without a central bank is like "serverless"; there is a server/central bank, but it's in the US and occasionally goes down for reasons outside your control or understanding.
.. until you need a lender of last resort.
> lots of smaller economies that just don't bother with their own currencies, the process is commonly called 'dollarisation'
Also the Eurozone. And there we saw what the risk is under a real shock of having debt in externally-controlled currency.
Describing dollarisation as being without a central bank is like "serverless"; there is a server/central bank, but it's in the US and occasionally goes down for reasons outside your control or understanding.
You don't need a lender of last resort. Canada and Scotland did just fine without.
(In fact, private Canadian banks usually played something like a lender of last resort to American banks in their recurring financial crises.)
The Eurozone is a mess, that's true.
Dollarisation in the strict sense of using the USD is useful when your domestic institutions crash more often than the US.
But in the wider sense, currency substitution still makes sense.
However, do keep in mind that these efforts really work best when the provision of currency is regulated just like making shoes or any other industry.
Historically, many of these economies with privately issued currency ran on some sort of metal standard. Which is similar to dollarisation plus local banks issuing their own deposits and notes promising to pay the bearer in USD.
(Also historically, no single bank ever developed a monopoly on issuing currency, but they quickly settled on a common standard of accounting.
Also do keep in mind that the US experiments with private bank notes were bonkers, just like the rest of the regulation of their banking system. Look to eg Canada or Scotland for how to run a more proper system.)
(In fact, private Canadian banks usually played something like a lender of last resort to American banks in their recurring financial crises.)
The Eurozone is a mess, that's true.
Dollarisation in the strict sense of using the USD is useful when your domestic institutions crash more often than the US.
But in the wider sense, currency substitution still makes sense.
However, do keep in mind that these efforts really work best when the provision of currency is regulated just like making shoes or any other industry.
Historically, many of these economies with privately issued currency ran on some sort of metal standard. Which is similar to dollarisation plus local banks issuing their own deposits and notes promising to pay the bearer in USD.
(Also historically, no single bank ever developed a monopoly on issuing currency, but they quickly settled on a common standard of accounting.
Also do keep in mind that the US experiments with private bank notes were bonkers, just like the rest of the regulation of their banking system. Look to eg Canada or Scotland for how to run a more proper system.)
The sole purpose of the state, is organize its population for war.
All other stuff a state do, is extras.
There were stateless societies with things like social welfare and public health and so on.
But the purpose of the state itself, as organization, is organize for war, states not only can exist without economists, they exist for 5000+ years, and for much of that time without any economist existing, and some states right now still don't rely on economists.
EDIT: if you disagree with me, explain why, do not downvote.
All other stuff a state do, is extras.
There were stateless societies with things like social welfare and public health and so on.
But the purpose of the state itself, as organization, is organize for war, states not only can exist without economists, they exist for 5000+ years, and for much of that time without any economist existing, and some states right now still don't rely on economists.
EDIT: if you disagree with me, explain why, do not downvote.
> There were stateless societies with things like social welfare and public health and so on.
Citation needed (unless we're talking about village-sized communities sharing harvest and giving access to a witch doctor, which is not the same thing, logistically)
States certainly existed without economists, but the world doesn't half look richer since states started caring more about economist hobby horses like trade policies, monetary stability, investment and human capital and less about gold reserves and military action to expand them.
Apart from anything else, they came up with an awful lot of influential arguments about purposes for and measures of prestige of states other than efficiently plundering their neighbours
Citation needed (unless we're talking about village-sized communities sharing harvest and giving access to a witch doctor, which is not the same thing, logistically)
States certainly existed without economists, but the world doesn't half look richer since states started caring more about economist hobby horses like trade policies, monetary stability, investment and human capital and less about gold reserves and military action to expand them.
Apart from anything else, they came up with an awful lot of influential arguments about purposes for and measures of prestige of states other than efficiently plundering their neighbours
Well, I think humanity got lucky that by and large since the industrial revolution many things that improved human welfare also improved fighting power.
The economist hobby horses you mention do mean that you nations can spend more resources on their military. That's both in the steady state, and what extras they can mobilize in terms of emergencies.
The economist hobby horses you mention do mean that you nations can spend more resources on their military. That's both in the steady state, and what extras they can mobilize in terms of emergencies.
Counter-theory: states exist to coordinate large groups of people for mutual gain, mostly in form of shared services (such as law, law enforcement, defense, thriving markets, but in current era also healthcare and social security) and wealth redistribution (taxes go in, subsidies come out). They may start as an attempt by a group of people to subjugate and extract wealth from a wider group of people, but they don't grow and survive unless they offer all these "extras".
In this way, they're another step of the natural way people divide into hierarchies as the group size grows beyond a size that's manageable through social conventions (which happens to be more or less Dunbar's number).
Now that explains why they exist and why people accept them. As for their purpose, I'm reminded of the good ol' POSIWID[0] - "the purpose of a system is what it does".
--
[0] - https://en.wikipedia.org/wiki/The_purpose_of_a_system_is_wha...
In this way, they're another step of the natural way people divide into hierarchies as the group size grows beyond a size that's manageable through social conventions (which happens to be more or less Dunbar's number).
Now that explains why they exist and why people accept them. As for their purpose, I'm reminded of the good ol' POSIWID[0] - "the purpose of a system is what it does".
--
[0] - https://en.wikipedia.org/wiki/The_purpose_of_a_system_is_wha...
The problem with this theory is that non-state organizations that did that, existed for a while, but were defeated in combat, or by threat of combat (ie: the threat of combat made them change to mount a defense) by states.
For example: During early Roman Empire era, they had a few rivals that were states themselves, and they dedicated most of the resources defending against them, but there was lots of wars and skirmishes with "barbarians", many that were considered a nation in the ethnic sense (Germania, Alemannia, Lusitania, etc...) but weren't states, they were bigger than dunbar number but their coordination in the nation sense, were more of a league of settlements and warbands, not an organized state, they had many things modern states do, like ways to provide for the old, law enforcement and so on, but had no central command for the army.
Many of these people were just crushed by states that did exist, often outright genocided (for example the Helvetii), the ones that survived (for example the precursors of modern Germany and France) eventaully became states themselves to be able to defend themselves.
The major exception was peoples living in places where agriculture is not possible, seemly agriculture is a sort of requeriment for a state to exist, so in the eurasian steppe/desert, african desert and so on, some non-state nations survived for a long time (for example Mongolia, although now they are a state too, still, they moved their capital to a place where agriculture is possible).
Seemly the "weirdest" states now in some senses, are the states that became possible because of our current oil-based economy, states that became fully sedentary despite not having enough food, because they export oil and buy food or irrigation equipment/water (for example UAE)
For example: During early Roman Empire era, they had a few rivals that were states themselves, and they dedicated most of the resources defending against them, but there was lots of wars and skirmishes with "barbarians", many that were considered a nation in the ethnic sense (Germania, Alemannia, Lusitania, etc...) but weren't states, they were bigger than dunbar number but their coordination in the nation sense, were more of a league of settlements and warbands, not an organized state, they had many things modern states do, like ways to provide for the old, law enforcement and so on, but had no central command for the army.
Many of these people were just crushed by states that did exist, often outright genocided (for example the Helvetii), the ones that survived (for example the precursors of modern Germany and France) eventaully became states themselves to be able to defend themselves.
The major exception was peoples living in places where agriculture is not possible, seemly agriculture is a sort of requeriment for a state to exist, so in the eurasian steppe/desert, african desert and so on, some non-state nations survived for a long time (for example Mongolia, although now they are a state too, still, they moved their capital to a place where agriculture is possible).
Seemly the "weirdest" states now in some senses, are the states that became possible because of our current oil-based economy, states that became fully sedentary despite not having enough food, because they export oil and buy food or irrigation equipment/water (for example UAE)
That reminds me a bit of steam engines: engineers were building quite successful steam engines and thermodynamics was only developed later in order to really understand how those engines worked.
Of course, later on thermodynamics helped build better engines to an extent. But the causation is from engineering to science.
Similar for modern states.
Also specifically central banks are a fairly recent idea in many parts of the world. And areas like Canada, Scotland, Australia etc did just fine without them, or actually even better.
(I actually do like economics and think it's very important and useful. But politicians and civil servants can run a modern state just fine without economists.)
Of course, later on thermodynamics helped build better engines to an extent. But the causation is from engineering to science.
Similar for modern states.
Also specifically central banks are a fairly recent idea in many parts of the world. And areas like Canada, Scotland, Australia etc did just fine without them, or actually even better.
(I actually do like economics and think it's very important and useful. But politicians and civil servants can run a modern state just fine without economists.)
This is a really good question, and it's the exactly the kind of question which needs to be asked but we're very afraid of what will happen when people start thinking about things like that.
I'm going a bit out of bounds here, but I think we've already entered into an early phase of post-statehood already, but haven't really realized it yet. The American nation is completely subservient to those manning the helm of the financial structure and serves no other purpose to allow it to continue operating as smoothly as possible until there is no more profit left to extract. Politics and material conditions have become completely detached from each other, and I think the past two elections have completely proven this.
There are still large ideological and political voids to explore. Where are the non-Marxist populist economists? Where are the conservative socialists? Why must we choose between 1800s Marxism and 21st century neoliberalism? People have been crying wolf about fascism a lot lately, but I think it there is a real danger that true fascism will emerge in a serious way once again once the dominoes start to fall in a few years if viable alternatives aren't developed in the meantime.
I'm going a bit out of bounds here, but I think we've already entered into an early phase of post-statehood already, but haven't really realized it yet. The American nation is completely subservient to those manning the helm of the financial structure and serves no other purpose to allow it to continue operating as smoothly as possible until there is no more profit left to extract. Politics and material conditions have become completely detached from each other, and I think the past two elections have completely proven this.
There are still large ideological and political voids to explore. Where are the non-Marxist populist economists? Where are the conservative socialists? Why must we choose between 1800s Marxism and 21st century neoliberalism? People have been crying wolf about fascism a lot lately, but I think it there is a real danger that true fascism will emerge in a serious way once again once the dominoes start to fall in a few years if viable alternatives aren't developed in the meantime.
Hang on, you are looking for "non-Marxist populist economists" but you're worried that "true fascism will emerge in a serious way"?? Which is it that you're worried about, communism or fascism? They're very different things. Even more so now that recent Marxist academics have mostly gone down explicitly anti-authoritarian routes. You want a third strain of populism that's "socialist" but not "Marxist"? What exactly is the "void" here?
The comment you replied to was perhaps a bit confused, but there's plenty of non-Marxist socialism out there.
Marx is kind of overrated anyway. (And, of course, 'Marxism' is being thrown around as a general accusation a lot. Just like 'neoliberalism' was a popular slur.)
Marx is kind of overrated anyway. (And, of course, 'Marxism' is being thrown around as a general accusation a lot. Just like 'neoliberalism' was a popular slur.)
> Where are the non-Marxist populist economists?
There have been some of those; populist handouts are popular with authoritarian leaders. Arguably this was the origin of fascism - explicitly anti-communist populist arguments for solutions to the bad economic conditions of the 1930s.
> Where are the conservative socialists?
Do Fabianism and Blairism meet this description?
There have been some of those; populist handouts are popular with authoritarian leaders. Arguably this was the origin of fascism - explicitly anti-communist populist arguments for solutions to the bad economic conditions of the 1930s.
> Where are the conservative socialists?
Do Fabianism and Blairism meet this description?
I'm not sure if fraudulent is the word but there seems a trend to apply physics like models (you apply energy x to an object and the temperature increases by y say) to human behaviour (increase interest rates by x and spending increases by y). But human behaviour isn't like that - people do what seems a good idea the time which is a way more complex thing.
Economists are aware of these problems. And many other problems we can come up with while philosophizing from our arm chairs.
The economic modeling principle of 'rational expectations' is one attempt to deal with exactly the thing you pointed out. Basically it says that you have to assume that in aggregate people in your model economy are at least as smart as your model.
But rational expecations' got a bad rep amongst non-economists.
The economic modeling principle of 'rational expectations' is one attempt to deal with exactly the thing you pointed out. Basically it says that you have to assume that in aggregate people in your model economy are at least as smart as your model.
But rational expecations' got a bad rep amongst non-economists.
>In economics, "rational expectations" are model-consistent expectations, in that agents inside the model are assumed to "know the model" and on average take the model's predictions as valid.
Still seems to be overdoing the rational bit when something like 1/3 of americans believe in ghosts, UFOs and so on.
Still seems to be overdoing the rational bit when something like 1/3 of americans believe in ghosts, UFOs and so on.
Wikipedia explains it thus:
> Rational expectations theories were developed in response to perceived flaws in theories based on adaptive expectations. Under adaptive expectations, expectations of the future value of an economic variable are based on past values. For example, people would be assumed to predict inflation by looking at inflation last year and in previous years. Under adaptive expectations, if the economy suffers from constantly rising inflation rates (perhaps due to government policies), people would be assumed to always underestimate inflation. Many economists have regarded this as unrealistic, believing that rational individuals would sooner or later realize the trend and take it into account in forming their expectations.
Even people believing in ghosts might be able to acquire the necessary cynicism.
> Rational expectations theories were developed in response to perceived flaws in theories based on adaptive expectations. Under adaptive expectations, expectations of the future value of an economic variable are based on past values. For example, people would be assumed to predict inflation by looking at inflation last year and in previous years. Under adaptive expectations, if the economy suffers from constantly rising inflation rates (perhaps due to government policies), people would be assumed to always underestimate inflation. Many economists have regarded this as unrealistic, believing that rational individuals would sooner or later realize the trend and take it into account in forming their expectations.
Even people believing in ghosts might be able to acquire the necessary cynicism.
There are a lot of interesting parts of economics and a lot of important measurements but indeed the story telling surrounding it is too loose. I think the relationship between astrology and astronomy is appropriate: Tycho Brahe and Johannes Kepler were astrologers and their wonderful measurements of heavenly bodies were attempts to make better astrological predictions. Through their work and the work of others was astronomy born. We are still waiting for Economics' version of astronomy. Maybe this is econometrics?
It is akin to psychology and social sciences but as they “use” mathematics, they get a free pass.
> I've come to believe that economics is essentially a fraudulent field of study, akin to social psychology
Nit: psychology as a broad field of study isn't fraudulent. Perhaps sub-fields of psychology, and earlier theories, are somewhat problematic, but you can't argue that something like operant conditioning doesn't have any utility.
Nit: psychology as a broad field of study isn't fraudulent. Perhaps sub-fields of psychology, and earlier theories, are somewhat problematic, but you can't argue that something like operant conditioning doesn't have any utility.
I actually have a degree in psychology with a concentration in neuroscience, so I took a range of hard-science neurology classes and the required "softer" classes, and I came away with the belief the field is, largely, a sham. There are exceptions, but even some of the "hard science" subfields are really just soft-science with technological window dressings.
I mean this at both low and high levels. At the low level, there are field-wide issues with reproducibility, p-hacking, sample size and selection, deliberate ignorance of compounding variables, etcetera. At the high level, the field simply cannot do what it claims to be able to do - explain the emergence of the mind and its role in behavior decision making, and will not be able to do so with the current approach that it takes, and it has very little to show in the way of falsifiability and predictive power.
The utility of even the basic stuff like operant conditioning breaks down outside of all but the most constrained lab conditions, but it is largely not discussed for the same reasons I mentioned above - it is too uncomfortable to admit. I think the politics surrounding the 'Rat Park' experiment[0] is an illustration of this.
There are counter-examples - behavioral and drug therapies which "work" (although it's often hard to say _why_ within any definitive proof) - but I don't think they're enough to shore up the whole field against this criticism.
[0] https://en.wikipedia.org/wiki/Rat_Park
I mean this at both low and high levels. At the low level, there are field-wide issues with reproducibility, p-hacking, sample size and selection, deliberate ignorance of compounding variables, etcetera. At the high level, the field simply cannot do what it claims to be able to do - explain the emergence of the mind and its role in behavior decision making, and will not be able to do so with the current approach that it takes, and it has very little to show in the way of falsifiability and predictive power.
The utility of even the basic stuff like operant conditioning breaks down outside of all but the most constrained lab conditions, but it is largely not discussed for the same reasons I mentioned above - it is too uncomfortable to admit. I think the politics surrounding the 'Rat Park' experiment[0] is an illustration of this.
There are counter-examples - behavioral and drug therapies which "work" (although it's often hard to say _why_ within any definitive proof) - but I don't think they're enough to shore up the whole field against this criticism.
[0] https://en.wikipedia.org/wiki/Rat_Park
> The utility of even the basic stuff like operant conditioning breaks down outside of all but the most constrained lab conditions
If you want to see it at work go visit the slot machines at your local casino.
Edit:
I've heard about the Rat Park saga from a few mouths before, so I won't read the wiki article. One thing I've noticed is that people forget that the original claim of the study stands: if the only interesting option is the addictive stimulant, the rats keep going back. The other claim that there's pernicious effects to a utopia is in addition to the other, and both claims I regard as equally instructive to how one would think about incentives in society, that goes beyond rats.
Another edit: A better example of a fraudulent study would be the Stanford Prison Experiment. I don't disagree that bad faith and misguided research is a big problem is social psychology. But I think the problem is more visible in the field now, and hopefully being addressed. 'Behavioural biology' probably holds more promise in the longer term.
If you want to see it at work go visit the slot machines at your local casino.
Edit:
I've heard about the Rat Park saga from a few mouths before, so I won't read the wiki article. One thing I've noticed is that people forget that the original claim of the study stands: if the only interesting option is the addictive stimulant, the rats keep going back. The other claim that there's pernicious effects to a utopia is in addition to the other, and both claims I regard as equally instructive to how one would think about incentives in society, that goes beyond rats.
Another edit: A better example of a fraudulent study would be the Stanford Prison Experiment. I don't disagree that bad faith and misguided research is a big problem is social psychology. But I think the problem is more visible in the field now, and hopefully being addressed. 'Behavioural biology' probably holds more promise in the longer term.
Correct me if i'm wrong, but sociology is soft-science, subfield of psychology right? Maybe it isn't, i'm not sure, but this is what i've been lead to think.
And sociology have predictive value, can we agree on that? Putting plots/columns in front of emergency exit (or just small exits) do help the human flow. We can predict and manipulate panic spread, social contagion, how people evacuate[0]...
So i suppose sociology is one of the exception you're talking about, but, realistically, isn't that just because sociological studies and applications have more founding, are easier to recruit for, and have less ethics constraint than other psychologies studies?
It's nothing like economics.
[0] https://royalsocietypublishing.org/doi/full/10.1098/rsif.201...
And sociology have predictive value, can we agree on that? Putting plots/columns in front of emergency exit (or just small exits) do help the human flow. We can predict and manipulate panic spread, social contagion, how people evacuate[0]...
So i suppose sociology is one of the exception you're talking about, but, realistically, isn't that just because sociological studies and applications have more founding, are easier to recruit for, and have less ethics constraint than other psychologies studies?
It's nothing like economics.
[0] https://royalsocietypublishing.org/doi/full/10.1098/rsif.201...
Sociology is generally considered it's own field that has some overlap with psychology and not a subfield.
>And sociology have predictive value, can we agree on that?
No, I don't think we can and I think that's the crux of the disagreement.
What big predictions have sociology made that have born to be true?
Your example of emergency exits doesn't fit, and in fact proves the opposite. Those emergency exit signs existed before any sociological study of them. It's not the case that sociologists said "Hey, we just invented emergency exit signs and predict they will save lives," rather they're saying "You know those things that people have been using in emergencies to save lives for decades? Turns out it works."
To be clear, I like sociology and the sociology courses I took I did find enriched my understanding of society at large. But I do not believe sociology helps us predict the future any more than history does (another field I love!). In contrast, fields like climate science say "If you release carbon, temperatures will rise" and that falsifiable prediction has born to be true. And I wager that sociologists will be more like historians with a diversity of opinion, than climate scientists who overwhelmingly agree with falsifiable and predictable claims.
>And sociology have predictive value, can we agree on that?
No, I don't think we can and I think that's the crux of the disagreement.
What big predictions have sociology made that have born to be true?
Your example of emergency exits doesn't fit, and in fact proves the opposite. Those emergency exit signs existed before any sociological study of them. It's not the case that sociologists said "Hey, we just invented emergency exit signs and predict they will save lives," rather they're saying "You know those things that people have been using in emergencies to save lives for decades? Turns out it works."
To be clear, I like sociology and the sociology courses I took I did find enriched my understanding of society at large. But I do not believe sociology helps us predict the future any more than history does (another field I love!). In contrast, fields like climate science say "If you release carbon, temperatures will rise" and that falsifiable prediction has born to be true. And I wager that sociologists will be more like historians with a diversity of opinion, than climate scientists who overwhelmingly agree with falsifiable and predictable claims.
I'm not an economist, but to me it looks like academic economists are turning more and more to validating their theories with data. As a field, it looks like its shifting towards greater empiricism. This is likely due to the deluge of data available that previous generations of economists didn't have access to.
So that makes me curious, what aspects of economics seems fraudulent in your opinion?
So that makes me curious, what aspects of economics seems fraudulent in your opinion?
Please can we distinguish between "lying about things which are definitely known and obvious", "saying things on the basis of incomplete evidence which is later falsified", "making forward-looking statements in good faith which turn out differently", and "making forward-looking statements in bad faith based on nothing".
There's a list of Bernanke quotes linked ( https://www.businessinsider.com/bernanke-quotes-2010-12?r=US... ) but I'm not clear which ones of those the author disagrees with, and some of them clearly fall into the good faith or bad faith bad prediction category. The ones about inflation seem broadly correct even in hindsight; the normal US inflation indicators have remained low.
(I would say a bigger problem in economics is the "freshwater/saltwater" distinction; economists can't even agree on Keynes, and he's dead)
There's a list of Bernanke quotes linked ( https://www.businessinsider.com/bernanke-quotes-2010-12?r=US... ) but I'm not clear which ones of those the author disagrees with, and some of them clearly fall into the good faith or bad faith bad prediction category. The ones about inflation seem broadly correct even in hindsight; the normal US inflation indicators have remained low.
(I would say a bigger problem in economics is the "freshwater/saltwater" distinction; economists can't even agree on Keynes, and he's dead)
The problem (pointed to in many comments) seems to be confusion about roles.
Economics is a form of science. Maybe not a hard science, but there are honest ambitions to understand the world. Much of it is historical, since it is based on narratives that are taken to explain observed phenomena. The models are then vague and unprecise.
However, government officials and their experts are not pursuing science. They are literally trying to change the state of a system by intervening. The use of academic language is more of an instrument in this, rather than anything to do with science.
I even find the phrasing "the economics profession" (referring to government officials) problematic since obscures policy making in language that sounds scientific.
Economics is a form of science. Maybe not a hard science, but there are honest ambitions to understand the world. Much of it is historical, since it is based on narratives that are taken to explain observed phenomena. The models are then vague and unprecise.
However, government officials and their experts are not pursuing science. They are literally trying to change the state of a system by intervening. The use of academic language is more of an instrument in this, rather than anything to do with science.
I even find the phrasing "the economics profession" (referring to government officials) problematic since obscures policy making in language that sounds scientific.
Hard agree on this take. This is part of (IMO) a larger pattern of politicians and society at large struggling to integrate science and scientific insights into social action.
Science won't set your goals for you, it can at most suggest what is the most efficient way to get from X to Y, yet there are unreasonable expectations being placed by society on scientific research (we are seeing this very clearly with covid and GW).
The net result is that science is often used as a shield by politicians, and those bullshit operations are often successful because the general public is so hopelessly uneducated about how science works.
Science won't set your goals for you, it can at most suggest what is the most efficient way to get from X to Y, yet there are unreasonable expectations being placed by society on scientific research (we are seeing this very clearly with covid and GW).
The net result is that science is often used as a shield by politicians, and those bullshit operations are often successful because the general public is so hopelessly uneducated about how science works.
The article seems to take it as given that Bernankie was lying in 2007 rather than just mistaken. In case this is obviously true, what piece of evidence am I missing?
I am referring to the ones who appear on TV in finance/market-related programs, but I can't stand economists-speak. They love to ambiguate everything they said a minute ago. I don't mean that they bloat everything with technical terms -- somethings are just complicated. Rather, simply voicing opposite claims constantly and avoiding giving a straight answer (for the sake of protection from getting sued? manipulation?).
Example: "I think that a meteor bigger than the Sun is on its way to hit the Earth could be bad news for the economy. However, it may also mean that markets will flourish."
Example: "I think that a meteor bigger than the Sun is on its way to hit the Earth could be bad news for the economy. However, it may also mean that markets will flourish."
TV finance gurus use econ-lingo, but just because it's the magic trick to sounding smart. But most of that makes no sense at all in that context. (Where's the data, what's the natural experiment, in what model, what's the assumptions, etc.)
Okay, sure they throw around basic things, but that's the typical commercialization of every fundamental indicator. They usually tell you nothing, worse they usually show you a graph of some data and tell you a story. Okay, how can you validate it? Okay, maybe you can argue with parts of it. Maybe the idea is to just throw ideas around, so then the viewers can do the same! Great but that's basically a stand up comedy with econ/finance anti-jokes.
Okay, sure they throw around basic things, but that's the typical commercialization of every fundamental indicator. They usually tell you nothing, worse they usually show you a graph of some data and tell you a story. Okay, how can you validate it? Okay, maybe you can argue with parts of it. Maybe the idea is to just throw ideas around, so then the viewers can do the same! Great but that's basically a stand up comedy with econ/finance anti-jokes.
It's an old trick. Hand readers, mediums and various types of cold readers are really good at this. You can always be right using these techniques.
"As Fed chairman, every time I expressed a view, I added or subtracted 10 basis points from the credit market. That was not helpful. But I nonetheless had to testify before Congress. [...] I would catch myself in the middle of a sentence. Then, instead of just stopping, I would continue on resolving the sentence in some obscure way which made it incomprehensible. But nobody was quite sure I wasn't saying something profound when I wasn't. And that became the so-called Fed-speak which I became an expert on over the years."
https://en.wikipedia.org/wiki/Fedspeak
https://en.wikipedia.org/wiki/Fedspeak
(Aside: I love your username, haha.)
They do it because, unlike our profession, it's hard to find out when you're wrong right away so they read a lot of competing theories and know that the models are only pale comparisons to all the swirling forces and incentives. What's the likelihood of the DPRK giving up their nukes in the next 5 years? 0.1%? Well if they do it will have massive ramifications on Asian and global security. Moving billions of dollars around. And so on.
So they hedge. And the usually use squishy language when they talk to the public. But for finance professionals they talk more in terms of distributions of outcomes or possible complications. It's a messy science.
They do it because, unlike our profession, it's hard to find out when you're wrong right away so they read a lot of competing theories and know that the models are only pale comparisons to all the swirling forces and incentives. What's the likelihood of the DPRK giving up their nukes in the next 5 years? 0.1%? Well if they do it will have massive ramifications on Asian and global security. Moving billions of dollars around. And so on.
So they hedge. And the usually use squishy language when they talk to the public. But for finance professionals they talk more in terms of distributions of outcomes or possible complications. It's a messy science.
It's worse than that... Rather than the DPRK, take the US election. A toss-up before the 3rd of November, with massive ramifications on fiscal policy and therefore GDP growth and currency strength.
I truly shake my head at the software developers who expect economists to give an accurate point forecast of a binary coin-toss, and then deride their expertise as a sham when they describe the scenarios that follow the two outcomes instead.
(And also shake my head at voters who believe "economists" hand-picked by politicians to affirm their policies. In a profession of a million people you can find one to support any policy even if 99% of the profession don't agree -- just like you can find a "computer scientist" who will promise you self-driving cars on the street within three years if you just pay him a million dollar consulting fee.)
I truly shake my head at the software developers who expect economists to give an accurate point forecast of a binary coin-toss, and then deride their expertise as a sham when they describe the scenarios that follow the two outcomes instead.
(And also shake my head at voters who believe "economists" hand-picked by politicians to affirm their policies. In a profession of a million people you can find one to support any policy even if 99% of the profession don't agree -- just like you can find a "computer scientist" who will promise you self-driving cars on the street within three years if you just pay him a million dollar consulting fee.)
I don't know.
To say that someone is telling a lie (as in the article examples) implies he/she knows the truth and then mis-represents it (intentionally).
I have some doubts that most economists actually know the truth, very often they seem more like reporting their own take on some unproved (and often unprovable) theory, which can be stretched to mean everything and the contrary of it, and that causes the "vagueness" you highlight.
Once said that predictions are tough, expecially when they are about the future, I think that astrologists are not that much worse in accuracy than the economists you see on TV.
To say that someone is telling a lie (as in the article examples) implies he/she knows the truth and then mis-represents it (intentionally).
I have some doubts that most economists actually know the truth, very often they seem more like reporting their own take on some unproved (and often unprovable) theory, which can be stretched to mean everything and the contrary of it, and that causes the "vagueness" you highlight.
Once said that predictions are tough, expecially when they are about the future, I think that astrologists are not that much worse in accuracy than the economists you see on TV.
"Give me a one-handed Economist. All my economists say 'on hand...', then 'but on the other..."
Harry Truman
Harry Truman
Funny, because first I used this form and then changed it to use 'However' because well, that'd be claiming us Homo Sapiens are known to have two hands, which is problematic and no sane economist would say so.
I'm pretty sure I first read that quote in the book "License to be Bad":
https://www.goodreads.com/book/show/40175311-licence-to-be-b...
https://www.goodreads.com/book/show/40175311-licence-to-be-b...
This article seems to confuse various forms of knowledge and discourse.
To follow up on the doctor analogy: First, I expect the doctor to tell me what he finds. For instance, I can't blame him for not finding pathologies for which I don't have a symptom yet.
Secondly, the state of any scientific knowledge is limited. Especially in economy, to explain ongoing new phenomenons is already a prowess, to accurately and convincingly anticipate them is sorcery. I expect economists to have heated debates among themselves, and the state of established knowledge to be lagging behind.
Thirdly, I don't expect my doctor to tell to Congress what he finds. There is a distinction between applying professionally an expertise and political statements. The Chair of the Fed has to do both both, having to analyse the situation accurately and to measure public statements. That goes to the question of how decisions are taken in a democracy.
Finally, as for op-ed, even written by Nobel prized economists, they are labelled as opinions. I appreciate Paul Krugman column, but one feature of weekly opinions is that they inevitably contain contradictions.
To follow up on the doctor analogy: First, I expect the doctor to tell me what he finds. For instance, I can't blame him for not finding pathologies for which I don't have a symptom yet.
Secondly, the state of any scientific knowledge is limited. Especially in economy, to explain ongoing new phenomenons is already a prowess, to accurately and convincingly anticipate them is sorcery. I expect economists to have heated debates among themselves, and the state of established knowledge to be lagging behind.
Thirdly, I don't expect my doctor to tell to Congress what he finds. There is a distinction between applying professionally an expertise and political statements. The Chair of the Fed has to do both both, having to analyse the situation accurately and to measure public statements. That goes to the question of how decisions are taken in a democracy.
Finally, as for op-ed, even written by Nobel prized economists, they are labelled as opinions. I appreciate Paul Krugman column, but one feature of weekly opinions is that they inevitably contain contradictions.
Economies are very strongly affected by public sentiment, so it's understandable that economists would want to manage that sentiment such that the bumps in the road don't cause wild swings in the market and destabilise the economy.
Yes, it's very paternalistic, but it's also how you maintain order and the smooth running of things in big societies (provided you're doing it in good faith - but that's a very different discussion).
This is also why defense and foreign policy are filled with liars: We need them to lie about the right things. It's not a problem until your society is destabilised by other factors such as income inequality or rampant corruption, after which point they only serve to further undermine the public trust in the institution.
Yes, it's very paternalistic, but it's also how you maintain order and the smooth running of things in big societies (provided you're doing it in good faith - but that's a very different discussion).
This is also why defense and foreign policy are filled with liars: We need them to lie about the right things. It's not a problem until your society is destabilised by other factors such as income inequality or rampant corruption, after which point they only serve to further undermine the public trust in the institution.
The Ben Bernanke example as a lie was a bad example. The Feds and everyone else clearly thought they could control things in 2007. And indeed, they may even have been correct if Paulson as a former Goldman CEO did not hate Bear Sterns and Lehman.
Exactly, he believed subprime problems were contained, and there were no problems with fixed rate mortgages at that time. It was maybe not an accurate prediction about the future, but inability to predict the future is not lying.
This assumes economics has something approaching the truth to the level that it can foresee something about the future.
If this were true, it would be used to predict stock prices, ergo, economics is a field that can likely only learn about long term historical trends and potential long term future trends, and can tell us mostly nothing about short term effects of policy in the 1-2 year future.
If this were true, it would be used to predict stock prices, ergo, economics is a field that can likely only learn about long term historical trends and potential long term future trends, and can tell us mostly nothing about short term effects of policy in the 1-2 year future.
Economics has a hard time predicting economic markets due to the Lucas critique -- if people know the predicted environment, they will change their behaviour (redirect investments/savings/etc) based on it and the prediction becomes inaccurate.
Economics has a nearly impossible time predicting stock prices - the Lucas critique applies hundredfold here, if market participants learn of more accurate economic predictions, they would immediately incorporate in their models and stock prices would have already adapted. (Not to speak of the randomness that a market with a billion participants exhibit, much of which is not really random but unexplainable by a a broad-strokes economic model...)
Economics has a nearly impossible time predicting stock prices - the Lucas critique applies hundredfold here, if market participants learn of more accurate economic predictions, they would immediately incorporate in their models and stock prices would have already adapted. (Not to speak of the randomness that a market with a billion participants exhibit, much of which is not really random but unexplainable by a a broad-strokes economic model...)
Thanks for describing the Lucas critique in this way. I went to look into it more and the wikipedia page[1] doesn't spell this out nearly as clearly as you put it, so thank you for the added context.
[1]: https://en.m.wikipedia.org/wiki/Lucas_critique
[1]: https://en.m.wikipedia.org/wiki/Lucas_critique
Most economists, "orthodox" or Neo-keynesian, have the same issues: they don't understand physics.
I'll develop: GDP growth is `(population growth) * (productivity gains) * ß` basically, right? So GDP per capita is productivity gain. Any person/economist with a better view on this is welcome, i mostly took that from economics 101 (or equivalent) in my first year, when i still did not know what i wanted to do.
Is the human body more productive than 20 years ago? is the human mind more productive than 20 years ago? No, not really, but we had two thing that helped us: more energy, and Moore's Law. Once our Carnot machines were optimized and our electric motors available, productivity gains caused by efficiency became marginal, and the best way to increase productivity was to install more machines. There is a hard 100% limit that physic impose us on electric motors, and a hard 64% Carnot's law impose us on thermic motors anyway, so no efficiency gains here.
The same way, Moore's law will stop one day. I'll be optimist and believe we will have CPU enter the nano dimension. And as smaller size equal smaller energy use, let's say this will be *10 efficiency (smaller mean they will break more easily too). Really unlikely, but let's assume that.
So GDP growth will be driven/limitied by energy output in the forseeable future, once we will recover from Covid.
I'll develop: GDP growth is `(population growth) * (productivity gains) * ß` basically, right? So GDP per capita is productivity gain. Any person/economist with a better view on this is welcome, i mostly took that from economics 101 (or equivalent) in my first year, when i still did not know what i wanted to do.
Is the human body more productive than 20 years ago? is the human mind more productive than 20 years ago? No, not really, but we had two thing that helped us: more energy, and Moore's Law. Once our Carnot machines were optimized and our electric motors available, productivity gains caused by efficiency became marginal, and the best way to increase productivity was to install more machines. There is a hard 100% limit that physic impose us on electric motors, and a hard 64% Carnot's law impose us on thermic motors anyway, so no efficiency gains here.
The same way, Moore's law will stop one day. I'll be optimist and believe we will have CPU enter the nano dimension. And as smaller size equal smaller energy use, let's say this will be *10 efficiency (smaller mean they will break more easily too). Really unlikely, but let's assume that.
So GDP growth will be driven/limitied by energy output in the forseeable future, once we will recover from Covid.
I think it's premature to describe it as the foreseeable future where we max out the capabilities of microcomputers, machinery and optimise the distribution of all the world's resources to ensure there is absolutely nothing that couldn't be improved by using different types or numbers of machines or better computer programs or passing control to a different owner or simply mopping up the compounding gains from having more machinery and algorithms in production.
Sure, in a world where we've perfected everything. GDP growth will cease to be a viable goal (and probably we'll all be too well fed and entertained to care). But until we reach the point of using all our resources optimally, it's reasonable to assume expansion and better allocation of production is a sensible goal, and to achieve it economists are arguing against more short-term, mutable obstacles like human rules.
It's a bit like the probable existence of hard physical limits to human lifespan doesn't invalidate the field of medicine. Or indeed, the probability that we're not smarter than twenty years ago doesn't invalidate the field of computer science's attempts to find more efficient ways of handling data,
Sure, in a world where we've perfected everything. GDP growth will cease to be a viable goal (and probably we'll all be too well fed and entertained to care). But until we reach the point of using all our resources optimally, it's reasonable to assume expansion and better allocation of production is a sensible goal, and to achieve it economists are arguing against more short-term, mutable obstacles like human rules.
It's a bit like the probable existence of hard physical limits to human lifespan doesn't invalidate the field of medicine. Or indeed, the probability that we're not smarter than twenty years ago doesn't invalidate the field of computer science's attempts to find more efficient ways of handling data,
Seems to be a large problem for a great many people with the power to tell lies for the greater good.
(Draws breath and decides to soldier on with the point because it's a sufficient important one).
Without getting into pro-anti-Trump-Biden BS and entirely separate from all of that, Fauci did this. He lied about the utility of masks in pandemic prevention "for the greater good." How do we know? Because Jon Doe's racist blog post said it was 5G conspiracies! No. Absolutely not.
We know he did it because he said so himself. [1]
I think this is a huge problem. If your job is to be convincing to the population about things that large numbers of the population won't, can't, don't, or just plain couldn't be bothered to, understand and you lie and then get caught or confess as is highly likely, you've completely undermined any authority the position you hold had. You spend the currency of that position you inherited from previous holders (or maybe even built yourself over time). The CDC says! Sure, but is it a lie "for the greater good or other reasons" this time? Again? Why is that even a valid question to ask, ever?
The CDC is pretty good. Fauci is pretty good on the standards of these things. Yet people don't trust the CDC and Fauci. There's one pretty good reason why someone might not. He's willing to knowingly tell factual lies and I wish he wasn't.
CDC/Fauci is just an example of the thing. Someone understands they have the power to cheat for the greater good and decide to exercise that power. The bill always comes due. Always. And this seems to be the case lately accross a very wide range of fields where simple, obvious, well supported factual information is being widely rejected due to a total lack of trust. Is that something we can get back in the bottle?
Disclosure: I am personally very much in favor of the CDC and Fauci.
[1] https://www.businessinsider.com.au/fauci-mask-advice-was-bec...
(Draws breath and decides to soldier on with the point because it's a sufficient important one).
Without getting into pro-anti-Trump-Biden BS and entirely separate from all of that, Fauci did this. He lied about the utility of masks in pandemic prevention "for the greater good." How do we know? Because Jon Doe's racist blog post said it was 5G conspiracies! No. Absolutely not.
We know he did it because he said so himself. [1]
I think this is a huge problem. If your job is to be convincing to the population about things that large numbers of the population won't, can't, don't, or just plain couldn't be bothered to, understand and you lie and then get caught or confess as is highly likely, you've completely undermined any authority the position you hold had. You spend the currency of that position you inherited from previous holders (or maybe even built yourself over time). The CDC says! Sure, but is it a lie "for the greater good or other reasons" this time? Again? Why is that even a valid question to ask, ever?
The CDC is pretty good. Fauci is pretty good on the standards of these things. Yet people don't trust the CDC and Fauci. There's one pretty good reason why someone might not. He's willing to knowingly tell factual lies and I wish he wasn't.
CDC/Fauci is just an example of the thing. Someone understands they have the power to cheat for the greater good and decide to exercise that power. The bill always comes due. Always. And this seems to be the case lately accross a very wide range of fields where simple, obvious, well supported factual information is being widely rejected due to a total lack of trust. Is that something we can get back in the bottle?
Disclosure: I am personally very much in favor of the CDC and Fauci.
[1] https://www.businessinsider.com.au/fauci-mask-advice-was-bec...
The US is in a hell scape. What do you do when you need masks to go to medical professionals but none were set aside for this scenario and medical and public stocks are the same? They decided to tell people to not wear masks. They also didn’t think anything like cotton homemade masks would be effective. So they couldn’t recommend people wear those.
Sometimes people in authority lie to manage hell scapes. It’s a game theoretic choice and probabilistic by nature. If you want to be upset at someone then do some more research. There’s plenty to go around.
Sometimes people in authority lie to manage hell scapes. It’s a game theoretic choice and probabilistic by nature. If you want to be upset at someone then do some more research. There’s plenty to go around.
Yeah, it's strange in this year of all years to contrast "the prosocial lies of economists" with the honesty of the medical profession.
PR has been incredibly important in the worldwide response to Covid-19. You can save the economy by telling people things are better than they really are, but you can save millions of lives telling people things are worse.
PR has been incredibly important in the worldwide response to Covid-19. You can save the economy by telling people things are better than they really are, but you can save millions of lives telling people things are worse.
I think there is another dynamics at play here which is selection. I don't think Economists are liars. They're just not essential to the market. Let me explain that first and we can move on to what I'm getting at:
Economists deal with "second order problems" i.e. whatever insights they come up with, regardless of how true or untrue it is, is absorbed by the market and quickly tested to be correct and adopted, which is then countered, which makes it ineffective... or tested to be wrong and discarded. They're basically solving problems which don't need solving and they're a net disadvantage to the market because the only effect they have is the effort put into testing their ideas.
Since they are, at best, non-essential and whatever they say doesn't matter at all, they have the luxury of saying a wide range of things. Among the wide range of things they say, the ones that are selected are those that favor certain crowds.
Economists deal with "second order problems" i.e. whatever insights they come up with, regardless of how true or untrue it is, is absorbed by the market and quickly tested to be correct and adopted, which is then countered, which makes it ineffective... or tested to be wrong and discarded. They're basically solving problems which don't need solving and they're a net disadvantage to the market because the only effect they have is the effort put into testing their ideas.
Since they are, at best, non-essential and whatever they say doesn't matter at all, they have the luxury of saying a wide range of things. Among the wide range of things they say, the ones that are selected are those that favor certain crowds.
[deleted]
A related question is why policy makers should trust experts with a history of lying.
I don't know why they should, but I suspect I know why they do. It's the same reason the public supports policy makers and politicians with a history of lying. The willingness to tell convenient lies an in-group likes is more useful to them than a commitment to telling the truth.
Because that lying is not random and policy makers dont trust just any lying expert. Policy makers do trust experts that lie in a way that policy makers find convenient and pleasant.
A related question is why policy makers should trust experts with a history of lying.
Or ones with a history of being wrong about everything every time, such as Neil Ferguson.
Or ones with a history of being wrong about everything every time, such as Neil Ferguson.
> Let’s say however, that your doctor actually lied to you – everything is not okay. Perhaps they lied for your own good; because they don’t know what will happen to you or what to do about it; or perhaps they lied for monetary gain. But does the reason really matter? The inherent doctor-patient trust has been broken and we fervently and unequivocally condemn deceit of any kind in the medical field.
Yes, of course it matters! Suppose there was a rare form of brain cancer that could only kill you if you found out you had it. In that case we would rapidly rethink what medical ethics requires of doctors. Surely it would not be beyond the pale to argue that a doctor is not only ethically in the clear to not tell you that you had this form of cancer, but in fact might have a moral obligation not to tell you.
This is exactly the position some people believe that economists are in vis-à-vis markets. Markets are basically dumb amalgamations of human choices and sometimes react to information pathologically. According to the argument, certain people have an obligation to project confidence in the market if that will lead to better outcomes, even if logically the market should start ignoring you if it expects that you'd lie.
I don't know whether I buy the argument or not, but it's certainly not stupid!
Yes, of course it matters! Suppose there was a rare form of brain cancer that could only kill you if you found out you had it. In that case we would rapidly rethink what medical ethics requires of doctors. Surely it would not be beyond the pale to argue that a doctor is not only ethically in the clear to not tell you that you had this form of cancer, but in fact might have a moral obligation not to tell you.
This is exactly the position some people believe that economists are in vis-à-vis markets. Markets are basically dumb amalgamations of human choices and sometimes react to information pathologically. According to the argument, certain people have an obligation to project confidence in the market if that will lead to better outcomes, even if logically the market should start ignoring you if it expects that you'd lie.
I don't know whether I buy the argument or not, but it's certainly not stupid!
Of course. And if you have an ever rarer form of brain cancer, where only shooting part of your brain out will save your life, the doctor is ethically obliged to shoot you in the head to save your life!
But my Bayesian prior is that when the doctor is trying to shoot me, s/he's trying to kill me.
And when an economist is lying to me, they're trying to defraud / manipulate me.
But my Bayesian prior is that when the doctor is trying to shoot me, s/he's trying to kill me.
And when an economist is lying to me, they're trying to defraud / manipulate me.
I mean, the doctor example is completely out there. Such disease simply does not exist and is extremely unlikely to ever exist.
And I think that economist situation is pretty similar in that regard in the long term.
And I think that economist situation is pretty similar in that regard in the long term.
I'll grant the former claim. It's intended to be a thought experiment, not anything that's likely (or even possible). And I have no quarrel with you taking the latter position either - the point I'm making in my comment is merely that the argument against prosocial lying is a bad one, not that I think my defense of economists lying is particularly strong.
Since multiple people have thought my point hinges on whether the example is reasonable, let me reconstruct the argument given in the post.
1. It's always morally unacceptable for a doctor to lie to a patient, regardless of his / her reasons for doing so.
2. The economist's profession is like that of the doctor in certain important respects: "The central problem with allowing for, and consenting to, any untruthfulness is that it undermines essential trust between professionals of the field and the rest of us."
3. Therefore pro-social lying by economists is wrong (just as it's wrong in the case of the doctor).
I think the claims in the article rely quite heavily on our intuition that it's never acceptable for a doctor to lie to us, even for "prosocial" reasons. (We don't have such intuitions for economists, apparently, and that's why our intuitions about doctors are so important for the argument.)
But this claim is basically not defended, and my point is that it's very easy to come up with cases in which it's not only morally acceptable for a doctor to lie to you, but in fact might be morally obligatory. This means that the argument fails.
The fact that the argument fails doesn't mean that it is okay (in any real life situation) for a doctor (or an economist) to lie to you. But the fact that the argument fails is something worth noting, I think, in comments about the article.
Since multiple people have thought my point hinges on whether the example is reasonable, let me reconstruct the argument given in the post.
1. It's always morally unacceptable for a doctor to lie to a patient, regardless of his / her reasons for doing so.
2. The economist's profession is like that of the doctor in certain important respects: "The central problem with allowing for, and consenting to, any untruthfulness is that it undermines essential trust between professionals of the field and the rest of us."
3. Therefore pro-social lying by economists is wrong (just as it's wrong in the case of the doctor).
I think the claims in the article rely quite heavily on our intuition that it's never acceptable for a doctor to lie to us, even for "prosocial" reasons. (We don't have such intuitions for economists, apparently, and that's why our intuitions about doctors are so important for the argument.)
But this claim is basically not defended, and my point is that it's very easy to come up with cases in which it's not only morally acceptable for a doctor to lie to you, but in fact might be morally obligatory. This means that the argument fails.
The fact that the argument fails doesn't mean that it is okay (in any real life situation) for a doctor (or an economist) to lie to you. But the fact that the argument fails is something worth noting, I think, in comments about the article.
> But this claim is basically not defended, and my point is that it's very easy to come up with cases in which it's not only morally acceptable for a doctor to lie to you, but in fact might be morally obligatory.
Your claim it's "very easy" to come up with examples would have convinced me more if you hadn't relied on the extremely contrived example of a cancer that would kill you if and only if you knew you had it. That made me think you had really struggled a lot to come up with realistic examples.
Your claim it's "very easy" to come up with examples would have convinced me more if you hadn't relied on the extremely contrived example of a cancer that would kill you if and only if you knew you had it. That made me think you had really struggled a lot to come up with realistic examples.
> But this claim is basically not defended, and my point is that it's very easy to come up with cases in which it's not only morally acceptable for a doctor to lie to you, but in fact might be morally obligatory. This means that the argument fails.
I don't find that easy at all. That is the thing, all those doctors examples are either super unlikely to ever happen or happen due to non-medical reason. I mean, ok, if I am SS man and it is WWII and doctor is saving someone ... but I don't live in country with current genocide and the core issue is not doctor specific.
The doctors in fact used to routinely lie to patient and family to "protect" their feelings. In generation of my parents/grandparents, the doctor would not tell you about bad prognosis. And that generation do not trust doctors when they tell them it is going to be ok.
Current doctors (at least here) are routinely acting more confident then they should when they are more of guessing. Or they just don't explain. And result is predictable - people turn to internet and word of mount from friends to fill the gaps.
I don't find that easy at all. That is the thing, all those doctors examples are either super unlikely to ever happen or happen due to non-medical reason. I mean, ok, if I am SS man and it is WWII and doctor is saving someone ... but I don't live in country with current genocide and the core issue is not doctor specific.
The doctors in fact used to routinely lie to patient and family to "protect" their feelings. In generation of my parents/grandparents, the doctor would not tell you about bad prognosis. And that generation do not trust doctors when they tell them it is going to be ok.
Current doctors (at least here) are routinely acting more confident then they should when they are more of guessing. Or they just don't explain. And result is predictable - people turn to internet and word of mount from friends to fill the gaps.
Wild false equivalency.
Markets don’t react to mere knowledge of them, like in your magical thought experiment.
Markets react to actions determined not by the knowledge itself but by discrete reactions to the knowledge called thoughts.
If economists hadn’t given up on knowledge oh about a century ago or so, we might not be so addicted to this pattern of spiraling anti-intellect.
Markets don’t react to mere knowledge of them, like in your magical thought experiment.
Markets react to actions determined not by the knowledge itself but by discrete reactions to the knowledge called thoughts.
If economists hadn’t given up on knowledge oh about a century ago or so, we might not be so addicted to this pattern of spiraling anti-intellect.
> Wild false equivalency.
My comparison is intentionally exaggerated. The post claims that it doesn't matter what reason the doctor has for telling you a lie, that it's just obviously wrong. I think this is ludicrous. If it's sometimes permissible for a doctor to lie, then it might also be permissible for an economist to lie.
I don't really follow the rest of what you're claiming, perhaps because you're responding to some point that I haven't made. In particular you seem to have a bone to pick with economists, and this is very vague:
> Markets react to actions determined not by the knowledge itself but by discrete reactions to the knowledge called thoughts.
My comparison is intentionally exaggerated. The post claims that it doesn't matter what reason the doctor has for telling you a lie, that it's just obviously wrong. I think this is ludicrous. If it's sometimes permissible for a doctor to lie, then it might also be permissible for an economist to lie.
I don't really follow the rest of what you're claiming, perhaps because you're responding to some point that I haven't made. In particular you seem to have a bone to pick with economists, and this is very vague:
> Markets react to actions determined not by the knowledge itself but by discrete reactions to the knowledge called thoughts.
That still seems like a wild literal over-interpretation. If we think like a physicist we can say that prosocial lying is wrong yet still understand that the mathematician will consider it okay in the limit case.
> If economists hadn’t given up on knowledge oh about a century ago or so,
You're writing this as if everybody knows what you're referring to, but I really don't. What are you referring to? What does it mean for someone to "give up on knowledge"?
You're writing this as if everybody knows what you're referring to, but I really don't. What are you referring to? What does it mean for someone to "give up on knowledge"?
A doctor treating a patient is not a scientist.
Neither is an academic economist that passively permits government officials to lie using scientific language.
The issue here is not the lying. The issue is the status of economics as a science. Once that status is gone, no one is obliged to listen to them any more than astrologists.
Neither is an academic economist that passively permits government officials to lie using scientific language.
The issue here is not the lying. The issue is the status of economics as a science. Once that status is gone, no one is obliged to listen to them any more than astrologists.
Later in the article he tones it down and says there's exceptional cases where it's okay for a doctor to lie.
You're right - snip for the lazy:
> Just as doctors must be honest, so too must we. Deception is not always wrong – there are extraordinary cases when we understand a doctor’s need to lie. I imagine doctors overstate their confidence to children before a particularly complicated surgery. Sometimes – very rarely – it may be the best option among only very bad options. Deception should be a last resort, not the rule. As we look to the future, the field of economics must cease it’s cavalier compliance with lying – even with perceived prosocial lying.
I find this statement rather odd and clearly incompatible with the very specific claim that "we fervently and unequivocally condemn deceit of any kind in the medical field". Well, do we or don't we?
In any case, you're correct that the article taken as a whole is a bit more careful. In my comment I'm telescoping in a bit on the one claim about doctors and the role our intuitions about honesty in the medical field are supposed to play in the argument.
> Just as doctors must be honest, so too must we. Deception is not always wrong – there are extraordinary cases when we understand a doctor’s need to lie. I imagine doctors overstate their confidence to children before a particularly complicated surgery. Sometimes – very rarely – it may be the best option among only very bad options. Deception should be a last resort, not the rule. As we look to the future, the field of economics must cease it’s cavalier compliance with lying – even with perceived prosocial lying.
I find this statement rather odd and clearly incompatible with the very specific claim that "we fervently and unequivocally condemn deceit of any kind in the medical field". Well, do we or don't we?
In any case, you're correct that the article taken as a whole is a bit more careful. In my comment I'm telescoping in a bit on the one claim about doctors and the role our intuitions about honesty in the medical field are supposed to play in the argument.
We lie to children because children aren't capable of long-term risk-benefit-adjusted decision making. But lying to the parents in this example should still be condemned.
This is subjective reasoning (nonsense). It only matters so far as a customer is disappointed and shops around for a favorable opinion contrary to reality. A lie is still a lie even if a person isn't adult enough to appreciate the difference and the harms are the same either way.
I don't follow your argument, can you make it clearer? Also "subjective reasoning" isn't a meaningful thing to accuse me of. If you want to say I'm wrong just say that!
This idea of "prosocial" lying is a problem in just about every field where experts are supposed to provide policy advice. Everybody who takes part in it thinks they're doing good, but all it achieves is that people stop trusting their institutions. Environmental doomsaying is seen by many as an entirely noble pursuit, but all it does is make climate science skeptics. The pandemic has seen a few big ones. "Masks don't work" was an obvious lie being spread around Feb/Mar, people would get called out in public for wearing them. The truth was that they actually do work, it's just there was a massive shortage, and hospitals needed them. "There is no food shortage" was one in my area (and a lot of other places). I contract with a large grocery chain, and I know for a fact that there were major shortages, but officials figured lying about it might stop it from getting worse. 9 months later, and look at how many people have a complete distrust for these institutions now.
Agree on everything else but climate change is real, it will screw us over, and we are not doing enough.
But that just makes things worse. I grew up in the '80s, and for my whole life I've been told by climate scientist that we are 5/10/15/20... years away from one particular climate catastrophe or another. The field has been heavily promoting doomsday predictions for even longer than I've been alive. At first to get people to take them seriously, and since then to scare them into action. However, regardless of any good the scientists have accomplished, any climate skeptic today can say "climate scientists are full of shit" and point to literally decades of climate scientists being full of shit. The noble lies have done irreversible damage to the credibility of the field amongst large portions of the population.
Basically, your position is that doomsday hasn't arrived yet, so it never will?
You have completely missed my point.
I am not commenting on the actual scientific merit of the field, I am only commenting on how the science is communicated to the public, and how that has impacted it's credibility amongst certain (rather large) groups of people.
Predictions of climate catastrophe have been heavily promoted with the public for decades, and typically in a way that either implies or explicitly states a very high level of confidence. Anybody who's lived long enough will have seen multiple predictions of this nature fail to materialize.
It's pretty clear to me at least that the rationale behind this style of science communication is that it will scare people, which will motivate them to take action, which will result in better outcomes. So these misrepresentations (or lies depending on how you look at things) are entirely justified by the desired ends that the people who propagate them hope to achieve. However, one of the other outcomes they achieve is that some people notice this and come to the conclusion that the field simply lacks credibility and can be safely ignored, or even that public derision of the field is justified. Such people can easily point to the historical failures of the field to justify their position.
A lot of people will say that the people who hold these views are simply stupid, and that their views are incredibly harmful. While that might be true, it doesn't mitigate any of the harm that has been caused by the (what I would see as) highly irresponsible communication strategy employed by many of the fields scientists and advocates.
I am not commenting on the actual scientific merit of the field, I am only commenting on how the science is communicated to the public, and how that has impacted it's credibility amongst certain (rather large) groups of people.
Predictions of climate catastrophe have been heavily promoted with the public for decades, and typically in a way that either implies or explicitly states a very high level of confidence. Anybody who's lived long enough will have seen multiple predictions of this nature fail to materialize.
It's pretty clear to me at least that the rationale behind this style of science communication is that it will scare people, which will motivate them to take action, which will result in better outcomes. So these misrepresentations (or lies depending on how you look at things) are entirely justified by the desired ends that the people who propagate them hope to achieve. However, one of the other outcomes they achieve is that some people notice this and come to the conclusion that the field simply lacks credibility and can be safely ignored, or even that public derision of the field is justified. Such people can easily point to the historical failures of the field to justify their position.
A lot of people will say that the people who hold these views are simply stupid, and that their views are incredibly harmful. While that might be true, it doesn't mitigate any of the harm that has been caused by the (what I would see as) highly irresponsible communication strategy employed by many of the fields scientists and advocates.
AC answered your question well, I'll just add the old story about the boy who cried "Wolf!" Eventually the wolf did come, but the boy's deception prevented any useful response.
I don't believe that's what the parent post meant. The state of the art climate modelling predictions output confidence intervals.
If you quote the low end of the confidence interval, and claim that climate change is a manageable inconvenience, you'll be (justifiably) called out by climate scientists.
If you quote the high end of the confidence interval, and elicit a picture of catastrophic consequences, mass migrations, or even runaway greenhouse effects, the climate scientists are suspiciously aloof. Even if you add zealous insistence that not a single country in the world will benefit from the warming; and that we're hurtling towards becoming the next Venus.
If you quote the low end of the confidence interval, and claim that climate change is a manageable inconvenience, you'll be (justifiably) called out by climate scientists.
If you quote the high end of the confidence interval, and elicit a picture of catastrophic consequences, mass migrations, or even runaway greenhouse effects, the climate scientists are suspiciously aloof. Even if you add zealous insistence that not a single country in the world will benefit from the warming; and that we're hurtling towards becoming the next Venus.
If you quote the high end of the confidence interval [..] the climate scientists are suspiciously aloof.
I'm not sure I agree with that perception, but even if it were, I don't find that suspicious. It may be that climate scientists are already aware that the current policies are not doing enough to avert the scenario's at the middle end of the confidence interval, so they know the high-end effects are becoming more likely each year.
zealous insistence that not a single country in the world will benefit from the warming
By all means, name a country that's completely self-sufficient for its current development level and is in a climate that can tolerate a 10%-deviation in any direction, and I'm sure many people will be able to suggest scenario's how that country will be negatively affected by the volatility of international markets or relations that are projected to occur in the second half of this century.
I'm not sure I agree with that perception, but even if it were, I don't find that suspicious. It may be that climate scientists are already aware that the current policies are not doing enough to avert the scenario's at the middle end of the confidence interval, so they know the high-end effects are becoming more likely each year.
zealous insistence that not a single country in the world will benefit from the warming
By all means, name a country that's completely self-sufficient for its current development level and is in a climate that can tolerate a 10%-deviation in any direction, and I'm sure many people will be able to suggest scenario's how that country will be negatively affected by the volatility of international markets or relations that are projected to occur in the second half of this century.
"You can fool some of the people all of the time, and all of the people some of the time, but you cannot fool all of the people all of the time" - Abraham Lincoln
Because of the mask debacle I would say that Twitter was a better source of information about the pandemic than any major world health organization. I dislike social media more than the average bear. Imagine a crack pot on twitter gets one or two things right before spouting nonsense?
Lying to the public is a dangerous game. It disappoints me that people give these orgs a free pass.
Lying to the public is a dangerous game. It disappoints me that people give these orgs a free pass.
I think a distinction needs to be drawn between academic economists and economists in government such as Benanke. Economists in academia should go where the facts lead them. Benanke has/had a different role in that he also had to prevent panic and runs on banks.
In 2007 March was he actually lying?
I tried to look up delinquency rates and ... it seems in March 2007 there was an uptick, but it was simply not significant at that point in time.
Sure, later Ben dropped the ball, and thought that the current interest rate is so low, that it should hold, and the economy will "muddle through". Then when in 2008 Jan he realized shit is already well in the high interaction regime with the proverbial fan he got the board to cut rates drastically.
https://www.nytimes.com/2014/02/22/business/federal-reserve-...
I tried to look up delinquency rates and ... it seems in March 2007 there was an uptick, but it was simply not significant at that point in time.
Sure, later Ben dropped the ball, and thought that the current interest rate is so low, that it should hold, and the economy will "muddle through". Then when in 2008 Jan he realized shit is already well in the high interaction regime with the proverbial fan he got the board to cut rates drastically.
https://www.nytimes.com/2014/02/22/business/federal-reserve-...
> In 2007 March was he actually lying?
The question the author should be asking. Effectively timed intervention would have been more helpful at preventing the financial panic than 'prosocial lying', so the mainstream explanation that Bernanke was just wrong has a lot going for it
The question the author should be asking. Effectively timed intervention would have been more helpful at preventing the financial panic than 'prosocial lying', so the mainstream explanation that Bernanke was just wrong has a lot going for it
I mean, how wrong was he? In hindsight we know that he underestimated the slowdown and how the economy will "behave".
But in 2007 March, when he delivered that statement, was he in accordance with best practices, best models about economics, and was he communicating about the data, indicators, possibilities, models and all that in the best way (known at the time to be the most optimal)?
I'm not trying to "whitewash" him, but this whole piece is just about being very truthful, maximally correct with regards to economics. Look at the data and just the data, not your wishes. But then it seems that's not happening when it comes to its first economics related example.
But in 2007 March, when he delivered that statement, was he in accordance with best practices, best models about economics, and was he communicating about the data, indicators, possibilities, models and all that in the best way (known at the time to be the most optimal)?
I'm not trying to "whitewash" him, but this whole piece is just about being very truthful, maximally correct with regards to economics. Look at the data and just the data, not your wishes. But then it seems that's not happening when it comes to its first economics related example.
Indeed. It's the difference between what a general might say to their troops before a battle ("We can win this") vs what they might say as an independent military analyst or as a military historian much later.
I think one of the canonical UK examples (which I can't find despite googling) was a member of parliament in the UK was asked flat out if the government planned to devalue the pound. Obviously he had to lie as the official announcement had not been made.
Theres also just the fact that social scientists don't agree on lots of topics. You can find one economist who says raising taxes is the right thing for the given situation, other who says they should be lowered. Opposing political parties could both use their economists as proof their policies are the 'right' one.
> “For every expert, there is an equal and opposite expert.” (Arthur C. Clarke)
I think a lot of people, including major stakeholders, know this to be true, or at least feel it to be true, but are willing to continue acting as if it isn't, because the very act of re-evaluating the fundamentals of the field will cause both existential and market crises which will be too painful to endure.