Another area where in recent years I’ve gained some respect for folk theories is economics. Now of course, folk economics is even more full of falsities and fallacies than folk physics, and a basic education in economics will rectify a lot of these. However, at the same time, “scientific” economics has its own share of awful fallacies that have become a firmly established part of its conventional wisdom, and are happily parroted by legions of economists eager to scoff at anyone who questions them as an ignoramus or crackpot. On some issues where I would myself scoff at folk theories a few years ago, I have come to realize that they may actually be closer to reality than the overconfident assertions of economists.
In particular, if your folk economics intuition tells you that you’re getting shafted but learned economists nevertheless keep assuring you that it’s all in your own best interest, there’s a pretty good chance that your intuition is pointing in the right direction while their assurances are just clever ideological propaganda.
I’ve actually had this idea for a while, but I can rarely bring myself to find enough time for a proper article rather than just writing short comments. Thanks for expressing your interest—it has certainly given me additional motivation.
In the meantime, if you haven’t seen them already, you can find discussions where I question some established wisdom in economics here and here.
“But even if consumer prices did rise the merger is probably still a good idea. It’s long been known that even small cost savings can outweigh losses to consumers from a price increase”
to which Tomasz Wegrzanowski replied: Williamson trade-off model is exactly why people hate economists.
Not once in history of the universe has there been anything benefiting the rich and powerful, for which some economists didn’t make a model showing it’s really in everybody’s best interest.
Cost savings are bullshit, price increases are real.
Another area where in recent years I’ve gained some respect for folk theories is economics. Now of course, folk economics is even more full of falsities and fallacies than folk physics, and a basic education in economics will rectify a lot of these. However, at the same time, “scientific” economics has its own share of awful fallacies that have become a firmly established part of its conventional wisdom, and are happily parroted by legions of economists eager to scoff at anyone who questions them as an ignoramus or crackpot. On some issues where I would myself scoff at folk theories a few years ago, I have come to realize that they may actually be closer to reality than the overconfident assertions of economists.
In particular, if your folk economics intuition tells you that you’re getting shafted but learned economists nevertheless keep assuring you that it’s all in your own best interest, there’s a pretty good chance that your intuition is pointing in the right direction while their assurances are just clever ideological propaganda.
I’d be interested in a LW or Discussion post by you on this topic.
I’ve actually had this idea for a while, but I can rarely bring myself to find enough time for a proper article rather than just writing short comments. Thanks for expressing your interest—it has certainly given me additional motivation.
In the meantime, if you haven’t seen them already, you can find discussions where I question some established wisdom in economics here and here.
just saw this point repeated 10 minutes ago.
on Tabbarok[http://marginalrevolution.com/marginalrevolution/2011/03/privatize-the-spectrum.html] saying
“But even if consumer prices did rise the merger is probably still a good idea. It’s long been known that even small cost savings can outweigh losses to consumers from a price increase”
to which Tomasz Wegrzanowski replied: Williamson trade-off model is exactly why people hate economists.
Not once in history of the universe has there been anything benefiting the rich and powerful, for which some economists didn’t make a model showing it’s really in everybody’s best interest.
Cost savings are bullshit, price increases are real.