Saturday, July 16, 2011

Stephen Fry and Irony

I recently came across this clip in which Stephen Fry repeats the canard that Aristotle thought that flies only had 4 legs. And then Fry basically claims that the Western intellectual world was so unscientific at one point that no one bothered to count flies' legs and prove Aristotle wrong.

To anyone with an even weak b.s. detector, this claim about Aristotle and his followers is clearly very unlikely, and as it turns out, it is indeed untrue. The irony is that Fry is well-educated and probably considers himself pro-science and pro-empirical knowledge, yet when he comes across a ridiculous claim he seems not to have bothered to perform adequate fact-checking.

I don't want to pick on Fry too much. I think this is a common problem: even educated, enlightened people seem to rarely question the things they hear and attempt to think critically about things. I've long thought our supposedly "skeptical" society to be perhaps just as gullible as the "superstitious" society of the Middle Ages.

You might notice that famous scientists or economists or other intellectuals will routinely say crazy or outrageous things when they leave their own narrow specialization. Or perhaps they will be empiricists from 9 to 5, but when it comes to leisure time and their personal lives loose thinking sets in.

Instead of just ranting, I'll attempt an explanation:
a) Knowledge has become so technical and detailed that it is just too costly for us to be generally educated. We specialize more and, on most subjects, we leave the thinking to the experts. E.g. The scientist or historian or journalist will likely get his economics from his favorite newspaper columnist, assuming that this columnist will not lead him astray.
b) Government has become large and so it basically concerns itself with everything. Hence, almost any subject can be regarded as a political subject. This or that economist is defined by whether he is on the left or right, not by whether or not he is sensible. Even popes are described in this way.

Wednesday, July 6, 2011

Matt Yglesias's Odd Political Economy

Matt Yglesias often makes intelligent points, but this post might be too cute by a half. He says the goal of monetary policy in the last few years has been "has been to do just enough to stabilize financial asset prices without going far enough to produce catch-up growth in the labor market." This isn't so crazy, but then he goes on to say: "What’s more, from the point of view of capital maybe it’s better not to catch up. As long as growth is positive and unemployment isn’t rising then maintaining a large 8-9% of the labor force out of work could be a useful tool of wage restraint."

How does "capital" benefit from high unemployment? There are some people who are primarily investing in bonds, or who have fixed incomes, and such people may like the idea of zero inflation or even deflation. Maybe lenders like this as well in some cases, though I'm not completely convinced. But generally, holders of financial assets, perhaps especially the wealthy among them, will be owners of stocks, real estate, etc. Why would such people oppose a little inflation? And why would a business owner want 8-9% unemployment, which is presumably coupled with unimpressive sales? I've never heard of someone who preferred a weak economy to a strong economy so that he could "restrain" wages. Basically, both employees and employers are fighting over the same pie (the revenue of their company), but presumably they want that pie to grow. Allowing the size of the pie to shrink or not to grow and then hoping you can consistently out-bargain your employees for a larger share of the pie does not seem like a reasonable or sustainable strategy for employers. Eventually, the employees leave.

Scott Sumner has a good take down of this sort of thinking.