The World's a Little More Complicated...

EconTalk Extra
by Amy Willis
Adam Ozimek on the Power of Ec... Adam Cifu on Ending Medical Re...

In a follow-up to this recent episode with Noah Smith, EconTalk host Russ Roberts sat down with Adam Ozimek of Forbe's and Moody's to explore how new data influences people's world views.

As always, we'd like to continue the conversation and hear what you have to say about this week's episode. Use the prompts below as food for thought...and let us know how it goes!


1. Ozimek, an empirical optimist, asserts that we are making steady progress in figuring out the empirical effects of various policies such as the minimum wage. Roberts is skeptical. What grounds does he have for his skepticism? Is his skepticism dogmatic in its own way? How might their disagreement be resolved?

2. Roberts offers a very candid description of how his views about markets have changed over the years. Does his current mindset make him more or less optimistic about markets' efficacy? What lies behind Roberts's evolution? Despite this evolution, it appears that there have been few changes in Roberts's philosophical outlook. How is that possible?

4. Have you changed your own worldview (bias? ideology?) when you've encountered something that just doesn't fit? (Roberts offers the example of Wikipedia in his own case.)

5. Ozimek argues that the "thought industry" is "driven far too much by persuading our own side." What does he mean by this? What is the "thought industry"? And to what extent is Ozimek right about it? Do you seek out views that you disagree with? Why or why not?

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COMMENTS (3 to date)
Brian Gladish writes:

I noticed that in the trade question, Ozimek did not bring up the possibility that adjustments did not happen because they are more optional. In other words, longer-duration unemployment insurance, disability, food stamps, Social Security (retirement), etc. are all options that reduce the need to adjust and make the labor market more rigid.

I think Roberts should be skeptical because there are assumptions and logic involved that cannot be ignored. Those who favor minimum wage increases likely support them because they accept Marx's assertion that capitalists will drive workers into starvation wages (and that profit is exploitation), while those who oppose them assume that ceterus paribus, the law of supply and demand holds.

Reading Karl Popper changed my mind on scientific method as inductivist. Prior to that I came to view Mises's utilitarianism as superior to the moralism I held at the time. But all of the changes are, in my view, to adopt stronger, more value-free arguments for a stateless society, a position I've advocated since hearing Robert LeFevre in 1967. I also have come to believe that markets are our experimental arena and that money profits and losses are the objective means for testing an hypothesis (business model).

I have made some efforts to engage with interventionists that oppose markets, but must say that the difference in assumptions has been a barrier. Although Popper thought the most fruitful argumentation could be with those who do not share our assumptions, I haven't found that to be the case. What I've written hasn't gotten enough traction in my "own side" for me to believe that has been all the successful, either.

Konrad Plachetta writes:

My comment is on macroeconomics and the effects of the stimulus package as related to econometrics. It seems to me that a stimulas package has two parts. One part is the direct impact of spending the money and how that will provide incentives and the other part is a sales pitch/psychological message trying to convince the general public that it is safe to spend their money.

I would argue that if all conditions were the same but one stimulus package were presented by a great salesperson/statesman and the other by a bad speaker and divisive politician that the effects would be very different in how well they worked.

I wonder if a good polticion (rare) can be as effective as a good stimulus?

When I am excited I spend differently then when I am depressed and I think this is the same with populations. It is why we have runs on banks and why people sell when stocks go down even though they should know better. I listen to different economic podcasts and I have never heard how a economists deal with the feelings, spirituality and emotions of people and populations, many of which are not completely effected by markets.

Lio writes:

I am tired with the assertion that the world is little more complicated... to oppose any efforts to make it less complicated. With such general mindset, we would still live passively in caves. I prefer imperfect models to no models at all. And I praise those who try to improve our knowledge even if it sometimes goes with making mistakes.

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