Friday, June 17, 2011

Economics is really really important for Ethics: Kristof edition

Kristof wants to come back in his next life as an economist. One wonders how that would change his reporting. Imagine a Kristof who takes self-selection bias seriously and doesn’t conflate correlation with causation. At any rate, he praises:
[Economics] possesses a rigor that other fields in the social sciences don’t — and often greater relevance as well. That’s why economists are shaping national debates about everything from health care to poverty, while political scientists often seem increasingly theoretical and irrelevant. Economists are successful imperialists of other disciplines because they have better tools.
Now most of the time, economics is accused of ignoring ethics. While I do wish we were more explicit about some of our deeper assumptions, I argued in my upcoming textbook that it's a very unfair characterization. Then there is the other side: ethics without economics, which to a greater or lesser extent Kristof and many others have been practicing:
To engage in passionate activism while ignoring what economics has to say about international trade, wage determination, etc. is, I think, not merely unwise. It’s morally irresponsible. The Foundation for Economic Education’s Sheldon Richman calls it “the intellectual equivalent of drunk driving.” Murray Rothbard makes this point with characteristic verve ... :
It is no crime to be ignorant of economics, which is, after all, a specialized discipline and one that most people consider to be a “dismal science.” But it is totally irresponsible to have a loud and vociferous opinion on economic subjects while remaining in this state of ignorance.
One of my favorite essays on this point is Paul Krugman’s “Ricardo’s Difficult Idea.” In it, Krugman makes the point that the critics of international trade are not dismissing the law of comparative advantage because they think the world is better described by some of the technical theoretical exceptions to the law of comparative advantage. The problem is that the critics don’t understand comparative advantage to begin with. …
[E]conomists’ convictions on issues like these are not the product of an unreasoned faith in free market magick. They are the product of carefully-reasoned theory and carefully-collected, carefully-analyzed evidence. [emphasis added]
Not only that, but it is likely that studying ethics will have an impact on the ethics you advocate. If economists were more explicit about some of our underlying assumptions, it would, for one thing, make Xan’s following suggestion much more practical:
Now, unbeknownst to Joe, it happens that if you actually do bother to go study some economics yourself, you will tend to come out more conservative (on economic issues) than you began. So actually, if Paul Krugman's opinions are what Joe substitutes for studying economics himself (and forming his own opinions), and if Paul and Joe are at the same point on the liberal-conservative spectrum, we have a problem. Joe should be listening to someone who's more conservative than Joe himself is.

In some sense this is just a silly, alternative way of saying: If you are informed today that learning economics would probably make you more economically conservative, you should become more conservative right now, today. And then pick an economist in the spectrum who really truly matches up with your new level of conservativeness. But that doesn't happen, I think we can all agree. So alternatively we can prescribe the following course of action for noneconomists who like to have opinions on the economic issues in the news:
  1. Line up the economist writers on the liberal-conservative spectrum
  2. Pick the one you like the best
  3. Take a step to the right. Read that guy instead.
To put it one final way, the prediction is that most of the people who feel like they're really on Paul Krugman's wavelength would not end up agreeing so strongly if they actually learned everything he learned. As they absorbed more of his knowledge, the wavelengths would actually drift apart instead of getting closer. [italics original]

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