Saturday, March 10, 2007

What Did You Do During University?

Why are journalists - even those who populate organs dealing with higher-education - so sloppy with their presentation of key concepts and have no idea about the minimum requirements to test assertions? OK, I'm kidding a bit, but if you don't have a sense of humour, you could not host Lost legacy.

So this snippet from News Blog (Higher-education news from around the Web), 9 March, caught my eye this morning:

“Economics Professor Bites Off More Than He Can Chew

“Two centuries ago, Adam Smith wrote in The Wealth of Nations of an “invisible hand” that, in a free market, tends to turn individually self-interested actions into public goods that benefit society as a whole.

On Wednesday, a visiting associate professor of economics at Michigan State University seemed to put that guiding philosophy to the test, in an incident at Sarasota-Bradenton International Airport, in Florida, that resulted in his arrest on two felony charges.”

Standards of journalism are not high on insight, mockingly funny though they may be when grabbing at one idea(actually wrong as well, as Lost Legacy readers should know), and linking it to an event not entirely relevant to test the alleged hypothesis.

Even by the standards set by using the wrong analysis, the New Blog journo demonstrates she confuses statements, a) ‘individual self-interested actions’ … tends to … benefit society as a whole’, with b) a single event that allegedly did not ‘benefit society as a whole’, and from this false connection concludes, ‘as one of his students might have put it, quite economically, reality bites’, ergo statement, a) is falsified.

But is it? Accepting for the sake of argument that the hypothesis is what Smith alleged (I know, he didn’t quite say that) was it ‘tested’ by a single event? Of course not! Anecdotes are not data.

Smith used the metaphor of ‘an invisible hand’ for what he asserted about the sum (not each and every singular event) of the individual motivations of risk aversion among merchants resulting in an aggregate outcome that raised domestic capital formation,and thereby increased the output of local land and labour greater than it would have been if some, or all, merchants exported their capitals to distant parts or abroad. That’s all. It doesn’t need a metaphor of invisible body parts to demonstrate this point, but Adam Smith was a rhetorician, and like all such stylists he sometimes got carried away with his compositions.

Some risk averse merchants could invest locally in failed enterprises, some could hide their capital under their beds, some could consume it in prodigality, some could die suddenly and their relatives spend it foolishly, or they could lose it in a court case, or the government could tax it away; and the sum of which individual actions would detract from the potential aggregate gain for society, plus, no single incident of an individual would undermine the integrity of Smith’s alleged hypothesis.

I could think of an argument – though I am long since departed from the late-night student discussions that I spent hours haunting in as a younger man – in which I would argue that the unfortunate Professor John Douglas McCallie helped to prove his actions benefited society, because by emptying the trash can onto the floor, he committed an act of littering a public place, which if not cleaned up would turn Sarasota-Bradenton International Airport, in Florida, into a typical airport found in some Third World countries (littered, dirty, messy, and an affront to good order and discipline).

The presence of a police man, who cared enough to ‘ask him to clean up’, as is his public duty, and who arrested him after he then “just flipped out” and for ‘shouting curses and swinging the can at the officer’, demonstrated that society’s standards of public conduct would be enforced and in thus acting he was trying to ensure the betterment of society on behalf of all those other people using the airport.

Consider the aggregate sum of individual actions following the good professor’s conduct versus the good policeman’s conduct. The former would lead to a breakdown of public standards of cleanliness; the latter to the upholding of justice. And without justice, Smith noted, society would crumble to atoms (Moral Sentiments).

However, such comments, while helpful in the training of young economists (what else was there to do at a late night party, while an undergraduate in the 1960s?), are not the point.

The journalist misunderstood Smith’s hypothesis, formed an incorrect test of it, came to wrong conclusion, ‘bit of more than she could chew’, and does not get a cigar. She should have spent more time late at night at university with some economists, or if she did, she should have listened more carefully...

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