19 January 2012

Economics and Genius

If you want to feel like the smartest person in the room, often a good way to accomplish this is to be the only economist. Frequently, the one economist will say things that make a lot of sense that no one else would ever come up with.  When I am that one economist, I sometimes feel like a genius.  Until a second economist enters the room, that is.  Because when the second economist shows up, he or she often says all the smart things I was going to say, before I can say them.  It turns out, it is not the economist who is brilliant, but rather the training we get as economists which leads us to think differently from non-economists, that sometimes makes us seem smart.

It is true that economists generally think more deeply than most people.  They are used to considering tradeoffs and long-term effects of a given policy or decision, which is something that eludes most people.

However, the mindset espoused by Steven Levitt is quite dangerous, and speaks to a tendency towards arrogance that is often seen among economists.  Because they are generally wiser and smarter than other people, many economists begin to think that they are absolutely smart and wise.  This in turn leads them to rely too much on their own perceived genius, which is why economists generally don’t have an issue with some form of central planning:  they really think that they are smart enough to plan an economy.

They are wrong, of course, because they lack one essential ingredient:  knowledge.  While economists may be pretty smart, and even wise, they simply do not know enough to manage an economy properly.  And so, they get so caught up in their brilliance that they never realize they are astonishingly ignorant.


  1. These guys are the 21st century equivalent of the witch-prosecutors from Monty Python's Holy Grail. "Ducks float, ducks aren't witches, therefore if she doesn't float, she's a witch!" (Ignorant peasants nod sagely, impressed by the brilliant argument) I'm grateful to economists for one thing and one thing only: their majors soak up all the idiots who want to *look* smart, so that real departments don't have to deal with so many such people.

  2. @GFM- wow, you sound really bitter about economists. Is it because they math makes them sound smarter than they are? I ask because that's often been my impression of most economists--they build their fancy models and then congratulate themselves for being so smart even though a good portion of the assumptions upon which their models are based are either highly flawed or wrong.

  3. Actually, yeah, that's pretty much it. Plot 20 years of population data, model it with the nearest exponential curve, "oh my god in 50 years the population is gonna explode to over 80 zillion people!"

    But no, I'm not *bitter*... I appreciate a good troll, and economists are good trolls. Just wish they'd play more "king's jester" role and less "king's top advisor"

  4. @GFM- you and me both. Sometimes I wonder how they can present some of their theories and projections with a straight face.