Thursday, August 17, 2006

Another Good Thinker and Writer on Economics

Most economists know Arnold Kling, another of my favorites. Although we don't agree on everything, he's always open-minded, always provocative, makes excellent points, expresses himself with ease, and has firm knowledge of his subject.

Arnold Kling
[Thanks to econlib.org for the photo.]

His latest article is about how people prefer obeying easy albeit incorrect directives, to going to the trouble of acquiring useful knowledge that is difficult to extract from other than readily observable data. In other words, we jump to conclusions rather than carry out blind and random experimentation.

Here's the salient point he makes:

"For the most part, consumers and taxpayers would rather not know whether education, health care, and foreign aid are cost-effective. Instead, people would rather 'trust the experts' and attribute high skill levels to educators, doctors, and aid agencies. And, of course, the experts would like us to continue to pay their salaries without questioning their results. As on many other issues, in seeking cost-benefit analysis [good] economists are fighting an uphill battle." [Others are taking personal advantage of the downhill but very profitable slide towards sensationalism.] [My editing. kd]

He's got it so right.

Most of us humans have the capacity to analyze events and learn, but we only use this ability in a comparatively primitive fashion. In many life situations, this may get us by, but sometimes it leads to tragedy. It's the difference between, "It looks like he's guilty," and "The prosecution has shown us solid evidence and has proven that he is guilty." Or "This looks like the reason for it," when "this" is not the real cause at all.

As he points out, when it comes to economics, education, politics, helping the poor, [I'll add climatology], or health care, this tendency of ours to generalize and hypothesize without performing scientific due diligence has done great damage.

Scientists and researchers, and the politicians who depend on them, must be disciplined in such a way as to find useful results 99.999% of the time, and not allow haphazard judgments to cause serious damage through premature public announcements and laws that are counterproductive.

Arnold writes at econlib.org, and posts often there in his econlog. You can also find him at tcsdaily.com.

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