Gongol.com Archives: January 2022

Brian Gongol


January 11, 2022

Business and Finance An unserious proposal

An academic economist proposes the use of price controls to stave off the effects of inflation. It's possible, as with all matters of near-consensus opinion, that this contrarian take has the right idea. (It's unlikely, given how price controls are reviled throughout the mainstream -- even Paul Krugman rejects them! -- but sometimes "common sense" is wrong.) ■ But whether the idea itself has merit or not, the essay proposing price controls is unserious because it repeatedly uses the word "strategic" without once describing which of those prices ought to be controlled, by what mechanism, for how long, or to what particular end. ■ If one advocates a policy that runs 180° contrary to an consensus opinion in a reputable field like economics, then the burden of proof shifts to the contrarian to show up with receipts and explain why the contrarian policy is going to work. The word "strategic" doesn't function as a magic wand to wave off dissent. ■ That the idea itself is contrarian does not give its critics license to mock it, either. The historical treatment of thinkers who have overturned prior consensus -- people like Copernicus and Galileo, for two prominent examples -- should be sufficient warning to the world that it's not always obvious to the majority when a better idea has come along. A little bit of modesty is usually in order, even towards those ideas that seem worthy of scorn. ■ Yet by the same token, a due regard for the process of constructing knowledge through trial and error ought to be adequate to remind the person with a surprising or adversarial opinion that it isn't enough to wave off objections and conjure up some form of magic as an explanation. ■ Humans can't progress unless we remain open to new ideas, but we also can't get very far if we have to convince ourselves entirely of everything and do it all from scratch: Just as no one needs to be able to fabricate a pencil from start to finish, nobody needs to assemble all human knowledge from scratch, either. We have to be able to trust received wisdom while remaining open to convincing new ideas. ■ It's a hard lesson, and one that can be especially hard to practice in times of swift change and large uncertainty. But knowledge requires a tension -- a sort of tug-of-war -- between what seems to be obvious and what challenges it. ■ Whether we're considering the effects of price controls on a market equilibrium or how we absorb the changing guidelines for dealing with a novel public-health challenge, it's up to those who learned the consensus to consider contrarian ideas patiently when they are thoughtfully presented -- and up to the contrarians to make their cases thoroughly and transparently. To do any less is unserious by definition. The world contains too many unknown unknowns to permit any less.


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