Wednesday, November 20, 2013

Is everything debatable?

Near the beginning of this semester, in my macro principles class, we were talking about all the reasons why economists might disagree. Belief in different theories or methodologies, differing interpretations of evidence, and differences in values or priorities: these pretty much capture everything, I think, although you could elaborate on each of these and delineate subcategories. During this discussion, one of my students asked, "So, in economics, is everything debatable?"

I was glad to get this question, but also very cautious about answering it. The short answer would have been "yes," but I did not want students to come away with the impression that everything is up in the air and any opinion is as defensible as any other; but neither would I want to try to claim that anyone who disagrees with the economists is wrong.

So I used the following illustration: is it debatable whether the Holocaust actually happened? (Or one could substitute "moon landing" for "Holocaust" if one wanted to use a less emotionally fraught example.) You can very easily find sources that claim that it didn't, and some of these sources might even have a veneer of authority. On the other hand, if you look at the opinions of academic historians, they don't seem to consider this an area of serious debate (or at least that's my impression). I.e. I don't think a historian would acknowledge the Holocaust denier and simply state disagreement with that position; I think that historians don't even take Holocaust denial seriously, to the extent that it is hardly even worth discussing. Not because the idea is so offensive, but because there just isn't any reasonable way to back up the claim. So one could go so far as to say that the issue isn't really debatable, even though there are those who would disagree with that assessment.

Back to economics: some things are very open to debate, but some things are pretty well settled, to the extent that no one really argues about them. Even for such issues, it's worth bearing in mind that nothing is really settled for all time. Plenty of theories have been thoroughly discredited after going unquestioned for decades. Thus the process of reasoning through economic questions, and the principles on which we rely, are as important as whatever conclusions we might draw. Even for an uncontroversial idea or argument, the perspective that class discussion takes is more "here is a useful way to think about this" than "here is the objective truth about this." Understanding how a model or argument works is the first step, and from there it is always worthwhile to consider how this model or argument is useful and what its limitations are. At that point, there will often be room for disagreement, but these disagreements should be grounded in a firm understanding of the argument itself.

For example: I teach the aggregate supply-aggregate demand model in macro principles. It would be fairly silly to claim that this model is anything like a true, factual representation of the economy. Models are by their very nature simplifications of reality, and any attempt to model something as complex as the economy as a whole will be open to criticism; no one model is going to serve every purpose we might like it to serve. One might use the AS-AD model to argue that government spending has a stimulative effect on a stagnant economy. One might also criticize such an argument, in a number of ways; but to say that this issue is debatable does not mean it's up in the air, anything goes, believe whatever you want. Counter-arguments are still arguments, or at least they should be.

Some time after I had discussed the Holocaust example in class, I thought about what else might be classified as well settled, not worth arguing about, not a topic of serious debate. Thinking about whether there even is such a thing as objective truth gives me a headache, but for practical purposes, "truth" is what everyone agrees is true, and almost nothing falls into that category. I claimed above that Holocaust denial isn't really a defensible point of view, even though this opinion is not unanimous. Could one make the same claim for, say, Austrian monetary theory? I am skeptical of Austrian monetary theory, based on my rather limited reading of it. However, I would not go so far as to call its proponents misguided cranks akin to Holocaust deniers. I would guess that there are prominent mainstream economists that would characterize Austrian monetary theorists in some similar fashion, and I would expect Austrian monetary theorists to object to the characterization (in addition to disagreeing about the substance of monetary theory). It's hard to decide what deserves to be taken seriously. Perhaps we could come up with a good set of criteria--subjective, but concrete. For example, when someone defending a point of view dodges or ignores thoughtful criticisms, I feel justified in disregarding that point of view.

So there are specific questions, like what is the most useful way to think about the monetary system, as well as the larger question of whether a topic is open to legitimate debate. In confronting either, this is the best advice I can give, which I will share with my classes in this and future semesters:
  1. Keep an open mind.
  2. Try to understand arguments, be aware of assumptions, and recognize sources of disagreement. In evaluating these things, avoid the temptation to dismiss anything without due consideration.
  3. Decide for yourself.
That last one can feel especially burdensome, but this is education, people.

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