Baby You Can Drive My Car

by Don Boudreaux on August 21, 2011

in Complexity & Emergence, Curious Task, Economics, Hubris and humility, Politics, Reality Is Not Optional

Suppose you own a car that has enormous amounts of muscle but whose suspension system is primitive and, worse, whose steering and braking systems are extremely limited.  The driver of this car can turn it only very gradually – no sharp turns; no dodging unexpected objects in the road; no quick changes in direction.  Similar issues plague the car’s braking: it brakes more like a long railroad train going downhill than like a passenger car on a flat, dry road.  Indeed, the brakes often outright fail.

You want to get from point A to point B by driving this car.  Alas, there is only one road connecting point A to point B.  This road is very winding and hilly – much like San Francisco’s Lombard St.  Children often play by the side of this road and, as children will, frequently run unexpectedly into it.  This road also has lots of potholes and construction sites.

If you could harness all of the horsepower of your mighty muscle car and make it, somehow, navigate this road successfully, you’d get from point A to point B quite speedily.

So being a hopeless romantic, you tell yourself and others that “Yes I can!  Yes I can use my mighty muscle car to drive from A to B!  I’m an American and there’s nothing we Americans can’t do if we put our minds to it and our hearts in it!”

Your nephew pleads with you not to try to drive that car from A to B.  “It’s dangerous, Uncle,” advises your nephew.  “The car simply isn’t designed for such a journey.  You’ll get yourself in a mess and likely hurt others as well.”

“Lemme ask you, m’boy – and I want a ‘yes’ or ‘no’ answer,” you respond, “Isn’t it possible to make this journey in this car?  If I anticipate perfectly all of the turns that are coming, all of the obstacles and children who might be in the road, as well as anticipate precisely when I must bring the car to a halt, isn’t is possible that the car will work as the vehicle to take me from A to B?”

“Uncle, almost anything is possible.  But in practice it’s foolish and dangerous.  Why don’t you use other means of getting from A to B?”

“Thanks for the advice, kid.  I take that as a ‘yes.’  And let’s be honest, all other means are probably slower than using my muscle car.  And, further, none of those other means are guaranteed to work, are they now?  Are they now?!”

“Well, no, Uncle.  Just as almost anything is possible, almost nothing is guaranteed.  But other means are more likely, I believe, to transport you successfully from A to B than is that muscle car of yours.”

And off you drive in your mighty muscle car on the road from A to B.

….

Given this car’s construction and fundamental properties, is it scientific for a professional driver to advise you on how to navigate the car from A to B as if the car were more like a nimble Honda Accord than like a locomotive?  Of course not.  Everyone would see that any such advisor would be committing professional malfeasance.  To assume X when in fact all that is available is very non-X-like Y is to be unscientific.

And yet economists do a virtually identical thing all the time.  Economists advise governments on how to correct this problem and that problem – internalize that externality and stimulate that slumping economy – without bothering to ask if the vehicle is appropriate for the task.

Economists’ (and others’, including voters’) abilities to imagine the vehicle succeeding at its assigned task – the possibility that the vehicle might work at the task to which it is applied – is too often taken to be sufficient justification for using the government to do what deeper and more clear-eyed inspection might well reveal is best not attempted by government.

Economists who offer advice to drivers of public policy without pausing to ponder the nature of the vehicle – the state – to be driven often appear to be non-ideological and scientific.  In fact they’re too often irresponsible fools.

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{ 31 comments }

robert_o August 21, 2011 at 3:45 pm

If it’s possible, it must be plausible, right?

Don Boudreaux August 21, 2011 at 3:57 pm

:-)

Invisible Backhand August 21, 2011 at 4:10 pm

I guess that metaphor was meant for me (what would a austrian/hayeken/monetarist *do* to solve the USA’s economic problems?).

Fred August 21, 2011 at 4:33 pm

I would be more interested in what Brian Boitano would do.

http://www.youtube.com/watch?v=XuRJSsAYxDA

muirgeo August 21, 2011 at 4:33 pm

What Don fails to realize is that he is like any other economist but he claims doing less will be better.. there’s no evidence for that though… even less evidence for his recommendations.

vidyohs August 21, 2011 at 6:46 pm

I doubt Don would waste the time to put you down.

BTW why don’t you tell JohnS why you called him a simpleton because he believes it is just as unproductive to beat a team of dead horses as it is to beat one dead horse?

Com’on, DS, a superior looney intellect like yours should have no trouble with explaining why beating a bunch of dead horses will be productive where beating one dead horse will not. For a person who isn’t simple, like yourself DS, it is a piece of cake. Right?

Invisible Backhand August 21, 2011 at 9:29 pm

So, do your comments ever get held for moderation, vidyohs?

vidyohs August 21, 2011 at 9:41 pm

Sorry, you can’t be taken seriously until you tell JohnS how it is indeed productive to beat a team of dead horses when it isn’t productive to beat one dead horse. You told him he was simple for thinking that way.

Put up or shut up, DS.

Invisible Backhand August 22, 2011 at 10:42 am

Got a link for that?

muirgeo August 21, 2011 at 4:32 pm

The muscle car is symbolic of neoclassical libertarianism. It’s never been tested and there is no reason to believe it is the best vehicle to run our society. Social democracy works like a Honda Civic but we’ve not had it in for a tire change or inspection in some time.

Get the belts replaced, change the tires and the oil… it’s pretty clear what needs to be done…. stop subsidizing the off shoring of production, stop regressive taxation policies and rebuild our public infrastructure.

Sam Grove August 21, 2011 at 7:42 pm

Why the Left Fears Libertarianism (and has to make up stuff like the above): http://www.independent.org/newsroom/article.asp?id=3116

Fred August 21, 2011 at 9:30 pm

The right fears libertarians as well.
Those who want to control things with force will always fear those who love liberty.
The left fears economic liberty, the right fears social liberty.
They all fear libertarians.

Sam Grove August 21, 2011 at 11:48 pm

The right would be hapless against libertarians without all the nefarious methods of attack they learned from the left.

Ghengis Khak August 21, 2011 at 8:38 pm

Some days (such as today), neoclassical libertarianism is untested and we dare not try it for fear of what will happen.

Other days, the implementation of neoclassical libertarian policies over recent (the last 50?) years is what has caused the current economic crisis, global warming, mad cow disease, the holocaust, male pattern baldness, etc.

muirgeo somehow holds both of these ideas in his head simultaneously.

Sam Grove August 21, 2011 at 11:48 pm

Is that doublethink?

vikingvista August 23, 2011 at 1:32 am

Zerothink.

Slappy McFee August 22, 2011 at 10:56 am

“It’s never been tested and there is no reason to believe it is the best vehicle to run our society.”

The Good Duktor:

This will always be the fatal flaw in your thinking. The absolute delusion that either an economy or a society can be run. Both are in a constant state of flux.

Craig S August 21, 2011 at 4:50 pm

What jobs have been offshored since 2006? US manfucturing jobs declined by the same amount as the rest of the world over the last 25 years. To say the current, 2011 unemployment rate is because of off shoring is dishonest.

If we followed more libertarian economic policies, we would end all subsidies.

Greg Webb August 21, 2011 at 5:00 pm

Don, you said, “The economist who offers advice to drivers of public policy without pausing to ponder the nature of the vehicle – the state – to be driven often appear to be non-ideological and scientific. In fact they’re too often irresponsible fools.” And, like too many experts, these types of economists offer the advice that their client wants to hear in order to ensure that the client will pay the fee that the expert is charging.

W.E. Heasley August 21, 2011 at 9:07 pm

“….is too often taken to be sufficient justification for using the government to do what deeper and more clear-eyed inspection might well reveal is best not attempted by government.

The economist who offers advice to drivers of public policy without pausing to ponder the nature of the vehicle – the state – to be driven often appear to be non-ideological and scientific. In fact they’re too often irresponsible fools.” – Don Boudreaux

A most excellent observation!

Once in awhile an excellent observation requires a second excellent observation:

“Government is the only enterprise on earth, that when it fails, it merely does the same thing over again, just bigger”. – Don Luskin, Trend Macro

Invisible Backhand August 21, 2011 at 9:31 pm
W.E. Heasley August 21, 2011 at 10:02 pm

Invisible:

No, was referring to the Chief Investment Officer for Trend Macrolytics, LLC.

Invisible Backhand August 22, 2011 at 10:44 am

Oh, you mean THIS Don Luskin

http://en.wikipedia.org/wiki/Donald_Luskin

vikingvista August 21, 2011 at 9:36 pm

Surely there is no better example than manipulating interest rates to improve the economy. I wonder of Friedman would agree.

W.E. Heasley August 21, 2011 at 10:24 pm

Excellent question.

The “Taylor Rule” [John B. Taylor] would be the best place to start regarding interest rates. Taylor wrote a most excellent book Getting Off Track, try that book regarding interest rates.

Regarding Friedman try Capitalism and Freedom, chapter three as cliff notes or read A Monetary History of the United States, 1867-1960, Milton Friedman , Anna Jacobson Schwartz , A. J. Schwartz

vikingvista August 22, 2011 at 1:35 am

The Taylor Rule seems nonideological and scientific, but it is a rule for government manipulation of interest rates.

Randy August 21, 2011 at 10:38 pm

Gotta love analogies. Let’s add to this one the fact that many of the passengers don’t want to go where this car is headed, but the drivers refuse to stop and let them out… not even for so much as a rest stop.

Randy August 21, 2011 at 10:50 pm

… so, time to grab the wheel… even if it means causing an accident….

Daniel Kuehn August 22, 2011 at 6:00 am

Well said. When you start giving specific examples I’m sure I won’t be able to agree as easily, and I’m guessing you’ll whitewash libertarians who don’t think about these questions either. But the point here, in the abstract, is still very good. There’s a great McArdle article in the new Atlantic on Goolsbee that touches on some of these issues and exactly what an academic economist needs to do to make a positive difference in Washington. I think you’ll like/be horrified by the story about George Bush and the farm bill.

Philo August 22, 2011 at 3:34 pm

I think you are making the point that expertise in “political science,” or in practical politics, is a prerequisite for offering policy advice to governments, or to government officials. Obviously, most economists, and most of the other pundits who offer such advice, lack this sort of expertise.

But there is a deeper question that should be raised: To whom, exactly, is such advice being offered? Ordinarily pundits are recommending that “we” do such-and-such, but it is so unclear–probably even in the mind of the pundit himself–who is included in this “we” that the advice is literally indeterminate.

It is useless to address proposals to (at the extreme) the group that includes *absolutely everybody*, or even just *all Americans*. Why worry about how *all Americans* had best conduct themselves, when everyone knows that *most of them will not, in fact, do their specified part*?

It makes more sense to address an individual, such as the President. But a trustworthy adviser would need quite a detailed knowledge of the President’s situation. Few pundits–and certainly no ordinary economists–have this; nor do they pretend otherwise: they are addressing “us” rather than any particular political figure.

In practice, political proposals, which are addressed to an ill-defined “us,” are merely political acts, not applications of any scientific theory (economics, political science, or whatever). They are attempts to generate a political movement, though often clothed in the rhetoric of social science.

Kevin August 22, 2011 at 4:49 pm

“Suppose you own a car that has enormous amounts of muscle but whose suspension system is primitive and, worse, whose steering and braking systems are extremely limited. The driver of this car can turn it only very gradually – no sharp turns; no dodging unexpected objects in the road; no quick changes in direction. Similar issues plague the car’s braking: it brakes more like a long railroad train going downhill than like a passenger car on a flat, dry road. Indeed, the brakes often outright fail.”

So it’s a Mercedes AMG. Got it.

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