“Thanks for seeing me, doctor. I’ve been having this persistent pain in my left hip, sometimes extending down the leg to the ankle. Could you help me with that?”
“How long have you had the problem?”
“It’s been several months, and it’s been getting worse over time.”
“Did you have any trauma to your leg that you recall?”
“No. I had knee surgery a couple of years ago, but that was the other leg.”
“Has there been any change to your regular activities that you think could have affected your left leg?”
“Not that I can think of.”
“Does any activity you engage in exacerbate or alleviate the pain?”
“Driving makes it worse, definitely, and sitting often does in general. Walking or flexing my gluteal muscles sometimes helps, but usually only temporarily.”
“How are you treating the pain when it occurs? Does the treatment help?”
“Usual with ibuprofen, and yeah, it often helps, but not always, and the pain keeps recurring.”
“Well, let’s take a look.”
[Various manipulations of leg, knee, hip, interspersed with “does this hurt” and “how about now.”]
“My best guess is it’s an inflammation of the bursa. I’m going to prescribe a cortisone injection. It’ll probably take a few days to know if it’s been effective, so why don’t you call the office a week from today and let me know if the pain has recurred. It would be particularly helpful for you to drive the day before you call to see if the pain recurs under conditions that have tended to exacerbate it in the past.”
Jim Manzi is fond of making unfavorable comparisons between economics and physics, and those sorts of comparisons are pretty good for making economics look bad. But I think a much better comparison is of economics to medicine. How does economics stack up in that comparison?
Well, is medicine a science? Doctors certainly have a lot of scientific knowledge. But there’s also a great deal they don’t know. And much of their actual practice involves operating in the area where knowledge is limited.
Let’s take my example above. Turns out the cortisone injection didn’t work. Does that mean I don’t have bursitis. It might mean that. But it might not: the injections don’t always work. What else could I have? Could be sciatica. Could be . . . some other pain of unknown etiology. Is there any way to determine conclusively? Not really. Are there other treatments that could be tried? Sure: physical therapy, different pain medications, acupuncture. Wouldn’t we need a definitive diagnosis to prescribe any of these therapies? Not really – none of them are dangerous, so we can just try them and see what works. But how can we know if they did work? Well, we’ll know if the pain goes away, but we won’t know definitely if the therapy did the trick, or how it could have done so – in some cases (e.g., acupuncture) we have only very limited understanding of how the therapy works at all, but doctors still prescribe it because in their extensive experience it “works sometimes for some people.”
So if the doctor doesn’t know for sure what I have or how to treat it, why should I even consult him as an expert? Presumably because I believe that his extensive training in his field, his training in medical science, that is, qualifies him especially well to make good judgments even in the numerous areas where there is no scientifically rigorous answer to a given question, only better and worse guesses as to the probable answer.
The technical expertise a doctor has is not the same as the technical expertise a physicist has – and, more importantly, we rely on the doctor developing a general capacity for good judgment in his field in a way that we do not rely on a physicist to develop in hers. But the doctor is also different from a historian. I would be very surprised if anybody actually relies on historians to help them make specific decisions. Rather, we rely on historians as repositories of a certain kind of knowledge that, we believe, is important for a society to retain and develop: for the sake our own social cohesion, to develop an appreciation of the texture of other societies, and because it is useful for developing practical wisdom in general (and I’m sure there are other good reasons – I’m not trying to be exhaustive here).
Economics is frequently taught and described as if it is physics, which would make policymakers more like engineers applying well-understood and tested principles in specific situations. But I would argue that it’s more like medicine – another field where what we know with the kind of scientific rigor that would pass muster for a physicist is dwarfed by what we know only imperfectly if at all, but where decisions have to be made constantly, and where we have strong reasons to believe that the knowledge and experience of the experts is very useful in helping us make those decisions.
Of course, medicine is very different today than it was a hundred years ago, to say nothing of two hundred or more years ago. That’s not to say that medicine had no meaning before the advent of modern antibiotics – surgery, for example, had some of the character of a scientific discipline even in antiquity. But plenty of discarded practices – bleeding, cupping, etc. – were once medically mainstream. I would interpret Manzi’s skepticism about, for example, the effectiveness of the stimulus to be akin to someone’s skepticism about whether some modern aspect of medicine – psychopharmacology, let’s say – isn’t, in fact, utterly without foundation (and there are certainly such skeptics). There’s a place for that kind of skepticism, for tough questions about whether this particular practice is actually founded on any kind of knowledge. But that, it seems to me, is the right way of formulating the question. Not, “can you prove this is true to the standards a physicist would accept” but “if I look at the kinds of evidence for those aspects of the field that are overwhelmingly agreed upon and relied upon regularly and routinely in all kinds of decision making, how far are we from those standards when we talk about contested propositions like this one about the stimulus?” Asking that question requires a considerable understanding of what is generally accepted as knowledge within the field – it’s not really a generally skeptical question at all.
And I don’t see a lot of point to a general skepticism about economics as a practical science, any more than I see the point of general skepticism about medicine. If you have a pain in your leg, you have to do something about it – even doing nothing is doing something. In general, I’d argue that the right thing to do if the pain is persistent and serious is to go to the doctor. If you are the head of the Federal Reserve, you have to have a monetary policy; if you are the Secretary of the Treasury, you have to have a fiscal policy. You can’t not have one. In formulating those policies, I should think the most important recourse you have is to economists (one of whom you are likely yourself to be).
With respect to the stimulus, the first question, it seems to me, is not “do we know that this bill will improve conditions with a sufficient degree of certainty” because we do not know with sufficient certainty whether not passing the bill will be superior to passing it – setting a barrier whereby “no action will be taken unless certainty is above a given level” is just status quo bias with some fancy windowdressing. This, I think, is what is really annoying to some of Manzi’s interlocutors: the stimulus bill wasn’t a peer-reviewed paper, but a practical decision, and it’s not at all clear that a strong status-quo bias has a theoretical justification in the face of a massive change in objective conditions. Moreover, I strongly suspect Manzi doesn’t believe the status quo is optimal. (Quick: which constitutes the status quo, a world in which the Bush-era tax cuts are extended, or a world in which they are allowed to expire? Answer without reference to theories about economic expectations that cannot be tested with the rigor of a physicist.)
Rather, the starting question should be “what is our best guess of the optimal fiscal policy given general economic conditions”? If we are in a recession (quick: are we? answer without reference to any data, such as the level of unemployment, or the velocity of money, or the change in the price level, that is insufficiently well-defined for a physicist) then should we run a deficit or a surplus and, if either, how big should it be? The answer to that question is very unlikely to be “our policy should be whatever it was last year – don’t change a thing.” At least, there is no particular reason to believe that last year’s policy is economically optimal this year. And answering that question without reference to economic theories strikes me as completely impossible – all a general skepticism about economics gets you is an inability to do the job. (Quick: we’ve got a treasury auction coming up. What term bonds should we issue? Answer without any reference to current economic conditions or theories about how those conditions may change in the future or how government finance decisions may affect said future conditions.)
Once we have our best judgment about optimal fiscal policy, we can move to a discussion of practical politics: what are the levers available to move toward the optimal policy, and what will be the likely collateral economic costs of said moves, and on that basis make (again) a judgment call about whether a particular piece of legislation is “going in the right direction” and, if so, whether it is “worth it” given the ancillary costs.
Would you want to consult a variety of economists on any point where practitioners generally differ? Of course, particularly if the course of action being contemplated has significant risks. Wouldn’t you want an opinion from a second physician in similar circumstances? But, again, that’s a very different conclusion from saying, “these doctors don’t know anything” and throwing up your hands.
A couple of final points.
First, Jim Manzi himself makes decisions with reference to general principles that he cannot prove, and for which there are strong counter-arguments. For example, he has a fondness for the principle of subsidiarity. There are a bunch of different ideas packed into that preference. Smaller government entities will be closer to the governed and hence in a better position to make informed decisions. The scope for error will be less in a smaller entities (and the law of large numbers will start to work in your favor with respect to larger entities encompassing a diverse array of smaller entities). And small entities will compete with each other, and competition will force them to converge on a closer approximation of optimal policy. But there are strong arguments on the other side of the ledger. Smaller entities are more prone to capture by local interests. (This was Madison’s argument in favor of large republics as more stable and effective than small ones because large republics could balance factions that could take over smaller republics.) Smaller entities are also more prone to sorting effects that both reinforce inequality and reduce the incentive for competition that drives progress. (See, for example, the American education system.) And, of course, smaller entities must duplicate a variety of functions that might be accomplished more effectively in larger entities because of economies of scale. The point is: these kinds of debates in political science are even further abstracted from any kind of testable scientific proposition than are the kinds of debates that economists might have about the stimulus. (Quick: is there such a thing as economy of scale? Can you prove it?)
Second, I don’t believe that anyone short of a Socrates can actually maintain radical skepticism about as pervasive an intellectual edifice as economics – or medicine. Rather (and this generalization is based on my anecdotal observation of people I know personally who claim to be such skeptics; it’s not something I can prove), what professed skepticism frequently amounts to is a vulnerability to crank theories. The people I know who tend “not to trust” doctors would, of course, go to a doctor if they broke their legs. But they believe that cancer is best treated with herbal remedies – or that vaccinations cause autism – or that mental disorders like depression have no chemical basis – and so forth. That is to say: where scientific knowledge is limited, they prefer the advice of those opposed to the establishment. That’s their heuristic. And I see the same sort of thing with respect to economics. None of the people I know who profess to believe that “fiat money” is a fraud and that therefore we’re all doomed – and I know, many, many such people, including professional investors – actually behave in their private or professional life in the way that they would if they really believed such a thing. But professing such a believe does make them vulnerable to specific truth claims from specific fellow-adherents in areas where scientific knowledge is limited (such as debates about what the optimal monetary policy might be). Again: the heuristic is: when we are in the gray areas, I listen to the cranks. In neither case does this strike me as a particularly defensible heuristic when exposed to the light of day.
Radical critiques can often be extremely useful, exposing hidden assumptions behind the existing intellectual orthodoxy, posing fundamental questions that, it turns out, that order cannot adequately answer, thereby forcing that order to change or to shore up those shaky foundations. Radical skepticism, though, I have less truck with.