Turned up to eleven: Fair and Balanced

Thursday, April 11, 2002


Ross Nordeen continues his slanderous and vicious pack of lies/attack on my virtue; well, not so much. Actually, we are in pretty fair agreement over this nature of economic reporting and analysis in the popular media, and I think the disagreement is almost a semantic one. I think Ross slightly misunderstood my point about Economics = Psychology writ large, or perhaps I did not explain it well. Interestingly, he chooses as a counterexample the notion of biology as physics on a grand scale. This is not nearly as outlandish a claim as he thinks; it was made quite effectively by the well-known biologist E.O. Wilson in his book Consilience:The Unity of Knowledge, which I heartily recommend. What I mean to say, however, is that economics, while being about the allocation of "scarce" resources (this just means resources that are not infinite, or far beyond what you could use, like air), is also about the decision-making processes that people make when trying to allocate those resources. For example, suppose that someone does their taxes (can you tell what's on my mind right now?), and finds out that they are going to get a big tax refund. Suppose further that that person carries a large balance on a credit card. Strictly looking at resource allocation, they should pay off their debt. But, psychologically, that refund is "found money" and I would bet that the percentage used to pay off debts is far smaller than the percentage used for luxury items. There may be a stricter economic explanation for this, but it strikes me that "mob psychology," that is, the aggregated psychological responses of large numbers of people, is important as well.

The Consilience tangent is very interesting to me as well. It strikes me as I start a scientific career that sticking one's head in the sand (I'm not talking about Ross here, just generalizing) will not be very fruitful in the near future. I can't help resorting to mathematical analogies, and I always picture those Venn diagrams that we did in school (you know, the overlapping bubbles that described the Union and Intersections of sets?). I imagine all of the various disciplines starting as little bubbles in this great big sea of information, knowledge about the universe. As the bubbles expand, they start to encompass larger and larger areas, representing the level of human knowledge. Eventually, they start pushing up against one another. The people on the borders can be the "interdisciplinary" people, who try to bring them together. Eventually, the forces of human ingenuity will force the insular disciplines together, and everything will be in the same bubble. This is probably the most forced and worthless analogy in human history, but hey, I'm a science geek, not a writer!

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