Difficult Economic Lessons

julio 13, 2012 · Imprimir este artículo

Difficult Economic Lessons

By Walter E. Williams


One of the more difficult lessons to teach economics neophytes — and, many times, trained economists — is that economic theory cannot say anything definitive about subjective statements, such as what’s better, good, bad or worse. Let’s try a few examples to make the point.

Cabernet sauvignon wine is better than fume blanc. Turkey is better than pork. Matter in the solid state is better than the plasma state. Each of those statements begs the question: Where’s the proof? With subjective statements such as those, disagreements can go on forever. It’s simply a matter of personal opinion. One person’s opinion of what’s better or worse is just as good as another’s.

Contrast those statements with objective ones, such as: Water is 2 parts hydrogen and 1 part oxygen. Scientists cannot split the atom. The distance in degrees from the equator to the North Pole is 90. With positive statements such as those, if there’s any disagreement, there are facts to which one can appeal to settle the disagreement. For example, if one person says scientists can split the atom and another says they cannot, a trip to Stanford’s linear accelerator to watch atoms being split settles the matter. However, if you say fume blanc is better than cabernet sauvignon and I say cabernet sauvignon is better, our disagreement can go on forever because there are no facts or figures to which we can appeal.

A useful clue as to whether a statement is subjective is the use of words such as should, ought, better and worse. I tell my students that though it’s important for thinking properly to know whether a statement is subjective or not, by no means do I suggest they purge their vocabulary of subjective statements. Subjective statements are very useful in fooling others into doing something you want them to do; however, in the process of fooling others, one need not fool himself. For example, President Barack Obama said that college is “an economic imperative that every family in America should be able to afford.” There’s absolutely no evidence to support such a claim, but it’s a good way to trick others into paying for someone else’s education.

How about the statement that people should not engage in race or sex discrimination? Whatever the emotional worth of such a statement, it’s a value judgment, with no facts or evidence to back it up, plus interpreted literally, it’s nonsense. Think about it. Discrimination is simply the act of choice. Whenever we choose, we discriminate. When we choose one person for a mate, we discriminate most of the time by race and sex. Would we want a society in which there are penalties for such discrimination?

I’ve had students argue that discrimination by race and sex in marriage is trivial and of little consequence but that there should be equal opportunity in employment. But what is equal opportunity, and how could you tell whether it existed? I’ve asked students whether upon college completion they will give every employer an equal opportunity to hire them. Most often, with a puzzled look on their faces, they answer no. Then I ask, “If you are not going to give every employer an equal opportunity to hire you, why should employers be forced to give you an equal opportunity to be hired?”

When the class discussion turns to the law of demand, sometimes the term “need” arises. A student might say a car, a cellphone and running water are essential needs. My response is that cars, cellphones and running water can’t be essential needs, because people have managed to do without those items for a longer period than they’ve done with them. There’s nothing that people cannot do without, but the consequences might not be very pleasant.

Some might say, “Williams, this thinking of yours is not very compassionate!” That’s right. I believe that being compassionate toward one’s fellow man requires dispassionate thinking and analysis. In other words, we need to think with our brains, not with our hearts.

Source: www.hacer.org – 13/07/12


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  1. Difficult Economic Lessons : Economía Personal | Radio Click Paraguay on julio 14th, 2012 01:16

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