Saturday, February 16, 2013

How to Win Arguments about Economics

The current state of the art in economic theory is largely pro-market, but can be used to make a case for various interventions. Whether you are a free-market ideologue or an interventionist ideologue, this is rather unsatisfactory. What is the solution?

Learn to toggle!

Let's say you are an interventionist ideologue. Here is how to proceed:

When someone who has gotten through micro I says "Any effective minimum wage must cause unemployment," you respond with a sophisticated argument about monopsonistic competition. But if an economist makes the case for unrestricted free trade, you come back with "You head-in-the-clouds economists! Just ask any businessman what he thinks of your argument! See what a poor farmer in India who can't get buy makes of your model!"

For a free-market ideologue, simply reverse the above positions: on the minimum wage issue, say "Ask any businessman about this so-called monopsonistic competition: he'll spit milk through his nose!" But faced with a businessman's opposition to free trade, shift to sophisticated economic arguments.

You can even use these approaches serially on the same topic. Imagine your are arguing against increasing the minimum wage. You suspect your pro-increase opponent is not aware of the micro I reasoning against the idea, and so you present a supply-and-demand diagram and lecture him about price floors and surpluses. But, oops, he fires back with "Monopsonistic competition!" Eegads, you're not an expert on employment models! No worries: just completely reverse course. Mock the fellow for relying on mechanical, unrealistic, abstract models, and tell him, "Just go ask someone who owns a small business what she thinks of your stupid models!"

So, just toggle back and forth between using whatever economic argument supports your case, when you have one at hand, and mocking economics as unrealistic and biased, when you don't. You'll never lose again: at worst, you might draw with another master of this technique.

1 comment:

  1. Haha! That's so funny, but highly true based on the kinds of economic and political discussions that I've been seeing lately. By these methods, either one of them could be "right." I think it's possible to be pro market at a micro level, and advocate for government intervention at a macro level.


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