Thursday, April 01, 2010

Why don't skeptics get economics?

Part 1 of a probably continuing series.

Behold, the intellectual output of skeptics on the subject of economics. This is from the Talk Origins newsgroup, a bastion of people who dedicate their time to defending the theory of evolution from spurious attacks, contributing rebuttal after rebuttal to false creationist claims, almost always accompanied by links to genuine peer-reviewed literature in journals in biology, astronomy, geology, etc. But darest one crack open a peer-reviewed journal in economics for once in their lives? Nay, unto you, I say: Nay!
The theory that the free market is a solution to all our economic woes is
based on the [false] assumption that the decisions are rationally based on
correct and full information available to all (the reason why insider
dealing is a crime).
And that's from one of the good posts!

Never mind that insider trading prohibitions actually reduce information in the market, by outlawing information-providing transactions. The theory that the free market is a solution to many (not all) of our economic woes is based on valuable evidence, recorded time and again in experiments, cross-time comparisons, and international comparisons. Despite what some Austrians may tell you, economics is not an a priori science. Assumptions are tested all the time. Where they are found wanting, economists apply that information in laboratories and in the field (PDF). Analysis of market sectors apply such tools as well.

You might expect people who spend most of their time defending the nature of empirical evidence in biology to apply at least some of that intellectual rigor to other academic pursuits. But that's a mistake.

Before I'm accused of generalizing from only one example, let me say that this is a common trend I've noticed. The rationalwiki page for economics, and almost all of its sub-pages, is dismal. The Richard Dawkins forum is even worse. I even once saw a poster there endorse Money as Debt. . . with no rebukes! The JREF forum is marginally better. Less Wrong is by a huge margin the best skeptic or rationalist website I've seen when the posters discuss economics, perhaps because it's a splinter community from the blog of an actual economist. From what I can tell, it's the exception rather than the rule.

What compels someone to actually consult a textbook when someone says something suspicious like, "The spin of the planets contradicts the conservation of angular momentum," but to be all RIGHT ON BRAH! when someone says something equally suspicious like, "The financial crisis was caused by deregulation." You'd think they would at least ask, "Hey, which deregulation, specifically?" But nope.

My guess is group signaling has a lot to do with the problem, but I'll have more thoughts later. Read more.