The world is full of people who do not understand economics. That’s not a sin or a crime. The world is full also of lots of people who do not understand ancient Greek texts, matrix algebra, the consequences of the Peace of Westphalia, and how to make authentic cajun gumbo. But as one of my brilliant colleagues, Bryan Caplan, points out with special clarity, most people who do not understand these latter things do not fancy that they understand these latter things. The typical person ignorant of any mathematics beyond basic arithmetic doesn’t go about in public pretending to be expert in matrix algebra.
Economics is different. People who have no exposure to the economic way of thinking typically think that they understand sufficiently the logic of markets to comment critically upon real-world market processes. As frustrating as this reality is – with its incessant outpouring of wrongheaded diagnoses and demands for this or that government intervention – it’s a reality that ain’t gonna go away.
Even more annoying than economically uninformed people making unfounded economic assertions are people who have a smidgen of exposure to economic jargon or economic models but inadequate knowledge and wisdom to apply that jargon and those models helpfully to reality. Steve Landsburg has found such a person.
The sign-holder’s sign looks mighty impressive to the economically uninformed observer, what with its (jargon alert!) indifference curves, budget lines, line segments, and points of tangency. It looks so very Scientific! Here we can, we are led to think, behold Science deployed in the service of saving the planet; Science that reveals objective reality; Science instead of simple sloganeering. (Well, the graduate-student-looking fellow smugly holding up the sign did embellish his Scientific poster with a catchy ‘n’ edgy word. He doesn’t want to appear to be too out of place among hoi polloi.)
Yet as Steve explains, the Science-deploying protestor knows not what he thinks he knows of.
It’s very easy to pretend to understand economics and the economic processes that economics has as its principal object of study. It’s easy for non-economists and poor economists to pose as purveyors of deep economic knowledge and wisdom. So beware, Cafe patrons, that the number of people out there who appear to be informed and wise economists is far larger than the number of people out there who are in fact informed and wise economists.