Invalid opinions
IF you follow the econ blogs in New Zealand you’ll have seen Matt and others getting pretty grumpy about the uninformed comments sometimes made in the media. That has only been exacerbated by the recent misunderstanding of quantitative easing. A philosopher writing in the Herald sums up how I think economists feel:
If “everyone’s entitled to their opinion” just means no one has the right to stop people thinking and saying whatever they want, then the statement is true, but fairly trivial. …But if “entitled to an opinion” means “entitled to have your views treated as serious candidates for the truth” then it’s pretty clearly false… [because it] implies an equal right to be heard on a matter in which only one of the two parties has the relevant expertise.
Economists are technical experts but work in a field that affects everybody’s daily lives. So, much like doctors, they have to cope with everybody thinking they’re an expert without a shred of real knowledge. And, just like in public health debates, credence is given to groups who have an opinion but no expertise. Understandably, economists get frustrated!
However, we need to be careful where we draw the line between those with expertise and those without it. For example, in public health debates, economists have no expertise in the health effects, but great expertise in devising and assessing the public policy response to the problem. A good illustration of that is Eric’s contribution to the alcohol debate in New Zealand. He isn’t an expert on the effects that alcohol has on humans, even if he’s familiar with others’ research. His expertise lies in determining whether the effects amount to a public policy problem, and helping to understand which interventions might be useful. Nonetheless, I’m sure he’s run up against the criticism that he’s not an expert on health and so has little relevant expertise.
Economists, too, need to be careful that they don’t exclude people from the debate who have useful expertise that offers a different perspective from their own. It’s very easy to dismiss someone whose opinion differs from your own by accusing them of being a non-expert. But any useful information from other disciplines will usually extend or conflict with your own view: if it didn’t then it wouldn’t be particularly useful. I don’t know how to draw the line but, while I understand people’s frustration at the comments of laypeople on technical subjects, it’s sometimes hard to distinguish a useful, alternative perspective from pure crankery.
I’ve mostly tried to stay away from health effects. But on one I have weighed in a little bit. I can read empirical work and I can read metastudies. I really can’t see how the NZ official position on the health benefits of moderate drinking is consistent with that existing literature.
Other economists do have more particular expertise in health outcomes though. Plenty of work by empirical health economists tells us about the effects of policy interventions on health outcomes. I particularly like, for example, Jon Klick’s work on how changes in parental abortion notification laws affected STD rates. Probably something that wouldn’t have occurred to the med folks to check.
I totally agree: it’s a blurry boundary because economists are good at assessing policy interventions, which is very similar to aggregate public health work. Even more reason, I think, to be careful about saying that other people don’t have relevant expertise.
I think the safest statement is that other disciplines usually mess up when they try to say things about economics, but that economists typically bring light and rigour to disciplines that are methodologically foundering.
(Channeling my inner Lloyd Bentson): I know doctors. Some doctors are friends of mine. Economists, you ain’t no doctors.
If economics and medicine are very similar, then their standards for
evidence / predictions should be similar, too. But imagine if some
medical doctors took the TVHE
attitude to forecasting: “The value in forecasting is not in the
predictions that our models make
about the future, but in the usefulness of the narrative the forecaster
tells.” What would that look like? “Well, these ten grannies are all
dead when I said they would be alive, but my narrative sure was useful
in the mean time!”
Don’t get caught up in the pyhsics envy, James! Economics is helpful, but it is not the same as medicine or physics of whatever. They call it The Dismal Science for a reason, and trying to elevate economics to the level of other sciences by fiat just invites people to dismiss economists altogether.
The narrative is useful if it gives us a useful description of how they died right!
I don’t think James is comparing doctors to economists directly – after all they are doing different things. Economists are trying to describe trade-offs that exists in a broad social system, doctors are trying to improve health care outcomes by diagnosing a patient and working out how they can improve outcomes without risking too much harm. Practical doctors are “policy makers” for their field – using a discipline that has significantly more usable data than economics 😉
The “outcome” in economics is far more unclear, as we can’t observe “social welfare”. The data is far more imperfect and varied. The ability to create controlled experiments is significantly more constrained. But the fact that, in both discipines, the individuals involved have invested significantly in specific knowledge holds – and I think that is the element that James is comparing.
Matt – Good luck with your new medical practice. Suggested slogan: “I don’t know what will happen to you, but when it happens I’ll tell you why.”
In retrospect, I think this thing is great: anyone who has “invested significantly in specific knowledge holds” is like anyone else who does the same. Which makes a garden variety political scientist such as myself “like” Stephen Hawking.
Of course, some of my own “specific knowledge hold” is about citizen reactions to elite communications, which leads me to suggest that most people reading any such comparison respond not by considering the carefully delineated nuance of my claim, but instead by calling me names then ignoring me. Which isn’t very productive for the expert.
Is this a sneaky justification for your initial, unwarranted sarcasm about economists vs doctors? Apology accepted 😉
Yar, there is technical and specific knowledge in all disciplines – and generally those that have invested in it will have a better understanding than those that don’t.
On top of that James is pointing out that it is hard to define “fields” clearly – and so people like economists can get “overdefensive” when other people are adding something of value for them to understand. This is a fair point.
I would also add that people with technical knowledge of a subject should try to understand why they disagree with people coming in from another direction – how can we be sure we understand our field if we cannot articulate why a differing point of view is less accurate. In this sense, it is always nice when people clearly lay out their arguments in terms of permises and conclusion.
I was looking for an example of a profession with an area of technical expertise that is the basis of policy decisions, and that people feel they have an intuitive understanding of. Doctors felt close and they still feel appropriate to me; I think you’re picking on a sideshow here.
If you want to make the case that economists’ views in debates about QE and the like should get more respect by saying economists are sort of like doctors, be my guest. That, as I read it, is the main point of the post, not a sideshow. But as a researcher in the field of politicized communications, I am here to tell you there is a body of evidence to suggest your approach likely won’t work, because people don’t and won’t buy your premise. If you lose them at the beginning, they stay lost.
And peoplel have good reason not to buy the premise, too, as I detail in other comments.
The point of the post is that, while some opinions on technical matters have no merit, it can sometimes be hard to tell which they are. We shouldn’t rush to dismiss others’ opinions simply because they are made by someone from another discipline.
In making that point I used public health professionals as an analogous group. I certainly wasn’t trying to draw credibility for economists from a comparison with doctors. You may not like the analogy, but I don’t think that’s a particularly substantive objection to my main point, hence calling it a ‘sideshow’.
What I take from this is that you either didn’t read the last paragraph of my post before commenting, or I did an appalling job of explaining myself. Hopefully this comment adds some clarity.
Ahh I read James post as saying that economists often feel that way – but it isn’t entirely fair. Namely the conclusion:
“Economists, too, need to be careful that they don’t exclude people from
the debate who have useful expertise that offers a different perspective
from their own. It’s very easy to dismiss someone whose opinion differs
from your own by accusing them of being a non-expert.”
Correct me if i’m wrong here, but it appears to me that you are saying that it is entirely reasonable for people to mistrust the views of economists about economics – even though economists spend their lives trying to understand the issues related to their discipline in great detail. The issue isn’t one of “are economists exactly like doctors”, it is “do economists have technical knowledge”. The fact is they do.
Doctors and physical scientists can appeal to authority in order to avoid going into detail of their hypotheses and the tests they run. Economists don’t seem to have the same scope to do so. I think this would be an interesting issue to analyse tbh.
“They call it The Dismal Science for a reason”
Yes and that reason was economists anti-slavery stand. Also I don’t think there is much physics envy going on. Since a least Marshall biology has been a common comparison.
As to the doctors v’s economists thing, try this from economist Harold Winter’s book “Trade-offs”
“When I was a graduate student in Rochester, New York, I was once in a professor’s office when his phone rang. From his end of the conversation, all I heard him say was: “I’ll get there as soon as I can.” After he hung up the phone he told me he had to leave immediately to be a consultant for a hospital in Boston. I jokingly asked him if they needed his permission to perform an operation. He said that was exactly what they needed. And he wasn’t kidding! The doctors were deciding between some different procedures, and they wanted his opinion on the cost-effectiveness of each one. Can you imagine lying on an operating table and the surgeon tells you not to worry because the economist is on his way?”
That is an awesome story … I think I’d have a heart attack 😉
Wait a sec, is this post posited on me being cranky?
I’d like to think that when it has come to discussing QE I’ve been trying to discuss the issue transparently and then communicate with people – my crankiness only comes in when people dismiss the argument without trying to discuss which premises are failing 😉
No.
I think this illustrates the gap between how economists see themselves and how (almost) everyone else sees them.
Economists seem to see themselves as doctors: impartial technical experts (and in some areas their work is highly scientific, and they are). But in many more (mostly macro) areas they seem to function more like philosophers. Experts, sure, but much of their expertise seems to lie in advocating for their ideological and political beliefs and refuting arguments that challenge them.
I don’t think an economist who thinks about the economic method would disagree – we are really a form of philosophy. And an economist that makes a conclusion and pretends it is not based on any perceived assumption is blind.
The advantage of the economic method in this capacity is that it lets the author at least reach their conclusion transparently – so people can work out what elements to test or disagree with.
Individuals are ideological, but the economic method itself is not – ideology can be found in assumption that we make (assumption that are required to reach conclusions), and these assumptions should be transparent so they can be challenged. That is the advantage of the economic method for discussing such issues IMO.
All well and good – but I don’t think this is mutually exclusive with economists being technical experts. Economists use imperfect data and the economic framework to try and understand trade-offs that exist, and the impact of policy. This is still “technical knowledge” that often gets completely ignored when people try to run around solving the economy.
Wait, you mean “scientific method,” right? I am sick of economists claiming everything good about other sciences as if they invented the lot. People’s enemy #1 in this regard: Steve Levitt.
I wasn’t claiming we invented anything – just that the framework we use aims to be transparent, and the way we analyse social problem aims to explain “why” something occurs.
Hell yes it’s the scientific method, although applied in a way that takes into account difficulties in experimentation and finding reliable data. But it is also a stock of knowledge built up from historical data and models … one which comes from investing time reading about these things 🙂
See ourselves as doctors??? An authority figure to reassure you with theatre while your world collapses around you, after which they can cut you open and try to figure out what they missed? Actually, that does sound rather similar!
More substantively, I agree with Matt. Claiming that macroeconomists (or philosophers, for that matter) have no body of knowledge more valuable than mere prejudice is ridiculous.
Doctors are technical experts but work in a field that affects everybody’s daily lives. So, they have to cope with everybody thinking they’re an expert without a shred of real knowledge. And, credence is given to groups who have an opinion but no expertise. Understandably, doctors get frustrated!
vs
Economists are technical experts but work in a field that affects everybody’s daily lives. So, they have to cope with everybody thinking they’re an expert without a shred of real knowledge. And, credence is given to groups who have an opinion but no expertise. Understandably, economists get frustrated!
The analogy is fine.
DiM, Rob, pull your heads in. This post was about not arbitrarily dismissing YOUR opinions.
Thank you
Economists : Experts, hmmm well obviously. Comparable with doctors ? Well, perhaps 17th century doctors. “Orthodox” economists these days seem to be all about leeches and blood-letting, with very little evidence of scientific underpinnings.
This may be “the media”‘s fault, but there is a perception of economists arguing from authority without stating their assumptions.
I find it mildly amusing that you link to Matt Nolan’s remarks on Russel Norman’s proposals on monetizing debt, as an illustration, we are led to suppose, of an “invalid opinion”. I say this because I don’t see much of a rebuttal there, more of an argument from authority.
Huh? I clearly separate what this type of monetization of debt means into its two channels – monetary policy and fiscal policy. I then state that since monetary conditions are appropriate, we can think of it solely through the idea of fiscal policy.
I then discuss why its more transparent to then do the fiscal tax directly instead of doing it implicitly through the central bank. This may come as a surprise to you, but economists have studied these issues for hundreds of years – and I’m simply using basic ideas from monetary and public finance economics to discuss what the policy meant. I didn’t realise that you asked the doctor to explain the full biomechanic explanation for why things are happening before you would ever listen to them – and given that you wouldn’t understand it (unless you yourself are a doctor) such a request may be a bit unfair.What you are saying about economists here is insulting – but not because you are trying to be rude. It just betrays a complete lack of understanding about what economists do and their motivation. We aren’t about “blood-letting and leeches” – FFS, we support having a monopoly central bank that leans against economic cycles with fiat money, we support having a state that accounts for nearly half of economic activity, we’ve argued in depth for a minimum income in society.
But yet we are still hated because we “admit there are trade-offs and publicly state them” instead of letting people run around thinking they can get lots of free things.
As a side-note, James’s post is explicitly written too economists saying we need to listen to criticism more – not a post blaming the media for any communication issues. Perhaps if you had finished reading the post you would have been able to stop yourself making these comments.
You lost me at “since monetary conditions are appropriate”.
This smells like argument from authority to me. i.e. both you and James are expressly implying that Russel Norman’s opinions, expressed as Green party policy, are invalid, because he simply doesn’t understand monetary “science”.
In the other thread, it turns out that you are open to the idea that there are differences of opinion about the output gap, and appropriate interest rates, and what a desirable exchange rate might be, and why the exchange rate is at its current level, and what monetary and fiscal measures might be used to modify it, and whether debt should be monetized, and whether the RB is fit for purpose, and what the purpose of the RB is anyway. And since these questions are eminently political, and the Greens are a political party, then they are entirely legitimate in proposing action on all these issues.
Again, in the other thread, you point out that the GP’s policy would interfere with RB independence, then arbitrarily decide that they can’t possibly have intended this because it’s sacred, therefore deciding that the question can be reduced to purely fiscal terms and that the Greens are incompetent on questions of monetary policy.
I think they’ve got you rattled because they are questioning a cozy framework that you are comfortable with. Don’t worry, it happens to medical professionals too. Sometimes the questioners turn out to be right; but you can be sure that the docs will try to disqualify them by argument from authority.
Hola,
“You lost me at “since monetary conditions are appropriate”.
This smells like argument from authority to me”
It is an argument based on the fact that forecasts of inflation and the output gap indicate that the time path of interest rates the RBNZ is saying it will follow (conditional on the forecast) is appropriate.
If we think it isn’t, we are essentially saying the RBNZ is failing its current mandate – this doesn’t seem like a fair assumption to start with. And if it is, the key is to tell them this now – instead of taking monetary policy off them in the first instance 🙂
I note in the rest of the comment you turn around and assume RBNZ failure, and state that its fine for the Greens to turn around and say this.
So let me get this straight, you trust MPs with the Greens about the economy more than economists and the RBNZ – you trust people who don’t follow the evidence and have vested interests against people who research these issues their whole life and have written a contract to do their best to improve outcomes.
At least you are transparent about this – but I’ll have to heartly disagree 🙂
“I think they’ve got you rattled because they are questioning a cozy
framework that you are comfortable with. Don’t worry, it happens to
medical professionals too. Sometimes the questioners turn out to be
right; but you can be sure that the docs will try to disqualify them by
argument from authority.”
No I got “rattled” because you obviously have a conspiracy theorist view of economists, and have no interest in trying to follow what they are actually doing and why. As a result, I found your comments to be arrogant and insulting – but I gave you the credit of the doubt in stating that you probably didn’t mean them in the way they came across 🙂
You might not think much of economists, but to be fair they do a lot of work and spend a lot of time looking at evidence – I’m surprised that in turn their discussion of policy is treated as no more than a passing opinion based purely on their self-interest. However, I shouldn’t be – economic issues are viewed inherently in political terms, so this is the way of the world.
“If we think it isn’t, we are essentially saying the RBNZ is failing its current mandate”
Not necessarily. It’s also possible that the mandate is wrong. Inflation the only target, interest rate the only tool, the RBNZ is pretty much the sole survivor of the Austrian school (Germany is trying to hold the ECB to this, and it’s exacerbating the train wreck). I don’t think anyone wants to go back to the Muldoon era : an independent central bank is fundamentally a good idea : but yeah, it’s time to re-examine its mandate.
I don’t have a “conspiracy theorist view of economists”, there is a large range of views among economists about the issues we have been discussing. I daresay some of the better-known ones would disagree with your view that “monetary conditions are appropriate” in NZ, and that all is for the best in the best of all possible worlds (literary version of “we don’t know how lucky we are”). For example : Paul Krugman, Martin Wolf, Joe Stiglitz are some of the economists I respect.
When one narrow school claims to hold the absolute truth, and attempts to disqualify any opinion which differs from their orthodoxy, then the problem is not a conspiracy theory in the eye of the observer.
I have plenty of respect for economists, but the implicit idea that you are defending (and the subject of James’s post)– that it’s an exact science producing objective policy prescriptions that are above politics, that lay people, and politicians, should learn to respect — is completely out of order. You say : “you trust people who don’t follow the evidence and have vested interests” — good grief, if a political party’s policy is illegitimate for you because you claim they have “vested interests”, then why not just declare a dictatorship of the philosopher-economists and have done with this democracy crap?
To return to the doctor analogy : If I visit three different doctors and they give me three radically different diagnoses of what’s wrong with me, and three radically different prescriptions to make me well, I’m entitled to ask what the heck is going on, and who I’m supposed to trust.
“You might not think much of economists”…
The problem in this thread is that “the economists” are assuming that people are attacking their expertise when in reality they are attacking their assumptions. Chill, guys.
Matt’s very generous. To me, this looks like a classic ‘argument without authority’ where you don’t state your assumptions or even make logical connections between concepts. There isn’t even an appeal to authority, just a few randomly chosen accusations and insults plucked out of the ether.
argumentum a rectum?
If economists want to be as respected as doctors, they need to remember the whole “informed consent” and “right to refuse treatment” thing. Those have been considered kind of important since at least 1945, for obvious historical reasons. Prominent economists at treasuries and, particularly, central banks and the
US State DepartmentIMF have been running roughshod over those principles in their drive to impose a highly partisan political agenda of lower wages, destruction of social safety provisions and dismantling of labor rights.The details of the “invalid opinion” chosen to illustrate your case are particularly ironic. All central banks in the world monetize government debt – instantly, unconditionally and without discretion – in defense of their overnight rate target. (Except the ECBuBa, which is why the Eurozone is going down the toilet right now.) The point of QE is not monetization (which happens anyway), it is to fix the long-maturity end of the yield curve – in other words, to conduct interest rate policy on a broader band of maturities than just the overnight rate. And to couch this long-maturity interest rate intervention in a language that will not send “sound money” quacks (and other apologists for giving free money to lazy rich people) into an apoplectic hissy fit.
You then object that inflation is simply a tax on lazy money and a (smaller) subsidy to working money, and the same tax and subsidy scheme could be implemented by the inland revenue office. To which I would respond: Whatever happened to your desire for cost-efficiency? A full Gesellian tax, recapitulating the distributional consequences of a higher inflation target and depreciated exchange rate (which distributional consequences are, of course, a valid policy objective for the Green Party) would be exceedingly expensive and onerous to implement, and the really large holdings of lazy money will find a way to dodge it. Inflation will do the same work without having to spend a single bureaucrat-hour collecting and disbursing funds, without having to spend a single lawyer-hour wrangling with spoiled, wealthy brats with entitlement issues, and without having a single unit of currency sitting untaxed in a Swiss bank account.
– Jake