Sometimes my hunches turn out to be so correct that I surprise myself. (Other times, for example on late 2009 official CPI, not so much.)
So there I am, minding my own business skimming Tyler Cowen’s blog about Daniel Klein’s admission that libertarians can be just as biased when it comes to economics questions as he (Klein) and a co-author had declared a year ago in the Wall Street Journal about leftists.
The very first sentence Tyler quotes from Klein is this: “…under the right circumstances, conservatives and libertarians were as likely as anyone on the left to give wrong answers to economic questions.”
I immediately thought, “I bet you these ‘wrong answers’ depend on assumptions. Economics is such a joke at this point, in the hands of us ‘professionals,’ that you can squeeze any conclusion you want out of it. I bet what Klein labels as the ‘wrong’ answer could easily be made ‘correct’ with an understandable set of assumptions, that aren’t radically less plausible than whatever argument Klein has in mind for the obviously ‘correct’ answer.”
And holy cow, check out how Klein proves that his libertarian colleagues are stupid:
More than 30 percent of my libertarian compatriots (and more than 40 percent of conservatives), for instance, disagreed with the statement “A dollar means more to a poor person than it does to a rich person”—c’mon, people!—versus just 4 percent among progressives. Seventy-eight percent of libertarians believed gun-control laws fail to reduce people’s access to guns. Overall, on the nine new items, the respondents on the left did much better than the conservatives and libertarians. Some of the new questions challenge (or falsely reassure) conservative and not libertarian positions, and vice versa. Consistently, the more a statement challenged a group’s position, the worse the group did.
It’s the part I put in bold that stuns me. I went and checked Klein’s original article to make sure there wasn’t a typo, or that Tyler had unintentionally quoted him in a misleading way.
Nope, Klein says with no further comment “c’mon people!” to those who disagree that, “A dollar means more to a poor person than it does to a rich person.” And the well-read Tyler, who can give an impromptu lecture on von Neumann Morgenstern utility functions or the mating habits of Latvian beetles, didn’t have any comment on this.
So, on the off chance that neither Tyler nor Klein knows this, let me point out that some of us specifically use exactly this statement to teach undergrads the proper way to think about utility theory. As I thought every mainstream economist he cared about this stuff knew since at least Hicks (and of course the Austrians were into this earlier), there are serious philosophical problems with interpersonal utility comparisons. That’s why if you read a modern textbook, they will point out that preferences are ordinal rankings unique to individuals, and that we shouldn’t assign anything meaningful to the numbers popping out of utility functions. And if you need to come up with a “social welfare function” that aggregates everybody’s utility function, there are serious problems when using the weighting mechanism for just this reason.
I’m actually annoyed that more than 50 percent of the libertarian respondents agreed with the statement. It shows (to me) they never got a good lesson in the foundations of modern utility theory.
But of course, I’m not actually annoyed, because I understand that the people who agreed were thinking in the everyday, psychological sense of “means more.” They weren’t thinking in terms of formal economic theory, where such a statement is meaningless. It would be like if you asked a bunch of quantum physicists if they thought Jim’s cat (in the other room) were alive or dead or both, probably not 100% of them would say “both” even though that is the “correct” answer if you specify the question properly.
In the spirit of Klein’s question, I have a suggestion. On a future survey, Klein should ask, “Do you think it would be a bad idea to let Herman Cain chaperone Smurfette’s next slumber party?” Klein will be shocked at how many people put the wrong answer to this question. C’mon people, sexual harassment is a real issue! Don’t ignore it just because you are a conservative Republican!