I have been thinking about Don Boudreaux's post for four days.

...it's interesting how ambiguous even seemingly unambiguous pictures and charts and graphs and historical anecdotes become if you look at them critically, trying your best to see in them not what you want to see but what someone with a view very different from your own wants to see.

I'll not here allow myself to get sucked into the black hole of methodology, save to express agreement with Deirdre McCloskey (and here I paraphrase) that no one was ever convinced by raw data of the truth of a proposition that he or she did not already hold to be true. Data are important, but the theoretical filters in our minds are no less so.

I think though that economists are less prone to this than others though. This is because economists like to deal in ironic arguments (go ahead and click this and hum away.) I was comparing notes this weekend with an interviewee, an applied econometrician who takes particular pleasure in showing how statistical results presented in published research do not show what they think because they did not understand the estimators they had created. I suggested this person isn't the most loved person in the seminar room, sitting in the back and poking big holes through someone's conclusions. I remark the same thing, though what I do is look at data and how it's generated more than estimators.

So the data on employment last Friday comes out and, like the data on investment that Boudreaux looks at, can be treated as half-empty or half-full depending on who reads the same data. (That last link is a pretty good reading to me.) The answer to me, as always, is that statements about the future are inherently probabilistic. I don't see anything that changes my priors to what I already believed. You might say my Bayesian priors were tightly distributed.

And here's what bothers me: If Boudreaux saying that we all walk around with tight priors -- that we are quite certain of the views we currently hold, so it takes a 2x4 to get us off that dime -- how is it we come to those priors? I believe that's the job of a well-rounded education, to provide each educated person with enough received wisdom so that what we believe is based on roughly the same information set. Reading at the suggestion of my NARN brethren Richard Miniter's Disinformation Wars on the plane today, I questioned whether that was true. Miniter writes discussing the myth that Osama bin Laden has kidney problems:

It is also possible that reports are simply talking to each other. In different foreign locales, I've seen English-speaking reporters gravitate to each other and share their notes over drinks. This is, by and large, a healthy practice -- it helps scribes come up to speed quickly and cross-check what officials have told them.

But it contributes to pack journalism and helps explain why so many news accounts from, say, Islamabad, sound the same.

They sound the same in part because we don't have people educated as well any more. The present practice of universities saying to their students that truth is relative, and facts are contextual, allows them to have prior probabilities reinforced easily by repetition of mistruths.

This connects for me to an answer to this year's question of a "dangerous idea", and the answer that interested me comes from David Gelernter:

If this is indeed the "information age," what exactly are people well-informed about? Video games? Clearly history, literature, philosophy, scholarship in general are not our specialities. This is some sort of technology age � are people better informed about science? Not that I can tell. In previous technology ages, there was interest across the population in the era's leading technology.

In the 1960s, for example, all sorts of people were interested in the space program and rocket technology. Lots of people learned a little about the basics � what a "service module" or "trans-lunar injection" was, why a Redstone-Mercury vehicle was different from an Atlas-Mercury � all sorts of grade-school students, lawyers, housewives, English profs were up on these topics. Today there is no comparable interest in computers & the internet, and no comparable knowledge. "TCP/IP," "Routers," "Ethernet protocol," "cache hits" � these are topics of no interest whatsoever outside the technical community. The contrast is striking.

How much of what we know is wrong? That line from George Stiglitz bears constant reminder.

Categories: economics