Tuesday, December 23, 2014

A Preliminary Taxonomy Of Economic Ignorance

Those of us who collect and grow plants as a hobby like to complain about a few different things such as pests, diseases, prices and the weather (drought, freezes, etc).  In addition to these usual suspects we also like to complain about taxonomists.  Not all the time, just when they change the names of plants that we grow.  Which probably seems to happen more frequently than it actually does.

A recent example that comes to mind are the Aloes.  Some busybody taxonomists randomly decided to move some of my favorite species into their own genera.  No real surprise here.  It is a surprise though when a plant hobbyist deals with such drastic name changes with an abundance of equanimity...From Aloe to Aloiampelos, Aloidendron, Aristaloe, Gonialoe, Kumara.  That's too much equanimity.  I think he must have robbed an equanimity bank.

Being an open-minded guy though, I'm certainly willing to entertain the possibility that taxonomists aren't entirely useless.  So I googled "why is taxonomy important" and found this...
Taxonomy is the field of research devoted to naming and describing living organisms - everything from bacteria and viruses to whales and flowers. It is an essential yet much underappreciated aspect of scientific research and without it huge branches of biology and other sciences would be near impossible. Taxonomists provide the basic vocabulary of biology if you like, defining each new species (individual words) and making sure there are accurate definitions of those species (like a dictionary) and records of those species, as DNA or actual specimens in museums so that everyone knows exactly which species is which and what other species it is related to. Without this kind of knowledge we cannot begin to do the simplest things with any degree of accuracy - if you do not know what species any given organism belongs to, then it becomes very hard to say anything meaningful about it. - Dr David Hone, Why taxonomy is important
Hmmm...that kinda makes sense.   In fact, I might actually be a taxonomist.  Let me explain...

Don Boudreaux recently shared a link to this article...Slavery and Capitalism...by the Harvard historian Sven Beckert.  When I got the gist of Beckert's argument, the first thing that popped into my mind was that he's a chanidget.  "Chanidget" is a label that I created to refer to a person who believes that prosperity happens because of, rather than despite, government intervention.  Of course the second thing that popped into my mind was that this designation obviously wasn't a good match.  Beckert is arguing that prosperity happened because of, rather than despite, slavery.  As far as I know, this doesn't have a label...which is an oversight that I feel a compulsion to correct.   Isn't this exactly what taxonomists do?

So it seems that I am a taxonomist...but not of biology.  Rather, I'm a taxonomist of economic ignorance.

Do you have any questions?  I sure do.  Just because taxonomy is essential for understanding biology...does it necessarily follow that it's also essential for understanding economic ignorance?  Do we really need to identify, classify and label all the different species of economic ignorance in order to effectively eradicate them?  Is economic ignorance really that dangerous?  Just how many species of economic ignorance are there anyways?  Are they really different enough to warrant a taxonomy?

Perhaps we should start tackling these questions by zooming out and considering the broad topic of ignorance.   As those of you who aren't entirely economically ignorant already know, our society is based on a division of labor.  A division of labor results in wonderful productivity but it also results in everybody being largely ignorant about most subjects.  It stands to reason that productivity would plummet if we endeavored to eliminate ignorance in its entirety.  We'd spend all our time in school and absolutely nothing necessary would get done.  So the existence of some ignorance is understandable and acceptable.

But it also stands to reason that certain types of ignorance are more harmful than other types of ignorance.  Not knowing of any of these bands isn't as harmful as not knowing that you should look both ways before crossing the street.  The former will cost you some cool points while the latter can cost you your life.  It should be clear that there's a continuum of ignorance that ranges from entirely harmless to extremely harmful.

Zooming back in on economic ignorance...the goal really wouldn't be for everybody to have a PhD in economics.  The goal would be to describe, classify, name, study, understand and eradicate the most harmful species of economic ignorance.  Let's roll up our sleeves and learn by doing.

With regards to Beckert's argument, at first glance it might seem a bit odd that I confused slavery with the government.  But from an economic perspective...these two things are closely related.  What connects them together is that they both diminish difference.   Diminishing difference is a problem because progress/prosperity depends on difference.

If people weren't slaves then it's a given that they would do different things with their resources.  If taxpayers could allocate their taxes themselves then it's a given that they would allocate them differently.  Increasing the variety/diversity of activity increases the chances of finding where there's room for improvement.  Decreasing the variety/diversity of activity is the equivalent of putting too many eggs in one basket.

Let me hedge my bets by sharing a few analogies...

Limiting the number of kids participating in an Easter Egg hunt would decrease the number of locations checked for Easter Eggs and thus result in less Easter Eggs being found.  If any Easter Eggs are found, would it be logical to use their discovery in order to try and justify the limitation of participation?  Or would it be more logical to argue that the Easter Eggs were found despite, rather than because of, the limitation of participation?

Limiting the participants in a fishing contest would decrease the number of spots checked for fish and thus increase the chances of a smaller fish winning the contest.  If the contest does happen to be won with a moderately large fish, would it be logical to use its size in order to try and justify the limitation of participation?  Or would it be more logical to argue that the moderately large fish was caught despite, rather than because of, the limitation of participation?

Limiting the participants in a photography contest would decrease the quantity of perspectives applied to different subjects and thus increase the chances of a less exceptional photograph winning first place.  If the contest does happen to be won with a moderately decent photo, would it be logical to use its quality in order to try and justify the limitation of participation?  Or would it be more logical to argue that the moderately decent photo was taken despite, rather than because of, the limitation of participation?

Along these same lines, forcing any of these participants to use the same techniques/strategies would also increase the chances of a less valuable outcome.

Basically, the rate of progress depends on how much ground is covered.  Diminishing difference results in less ground being covered and as such, decreases the rate of progress.

Ha-Joon Chang believes that our progress is in no small part a direct consequence of the government limiting the amount of ground that we cover.  Sven Beckert, on the other hand, believes that our progress is in no small part a direct consequence of slavery limiting the amount of ground that we've covered.  Both scholars believe that the diminishment of difference is largely to thank for our progress.

To hedge my bets even more I'll use an example from my blog entry that I referred to earlier... Progress as a Function of Freedom.  If Hitler had managed to conquer the world we can imagine that he would have exterminated all the other races/ideologies.  But would this radical destruction of difference have eliminated progress?  Probably not directly.  This is because some difference would still exist.  No two individuals are exactly alike so it's entirely possible that there still would have been progress...just at a drastically reduced rate.  It's safe to assume that if any progress was made, that it would have been attributed to the wholesale destruction of difference... and I certainly wouldn't have been around to point out the absurdity of such a conclusion.  

All harmful economic ignorance is based on a failure to understand that progress depends on difference.  In terms of taxonomy, perhaps we can say that this is the economic genus within the family of harmful ignorance.  The next step would be to give this genus a name.

Because Hitler exemplified the potential harm caused by this type of ignorance, it makes sense to name it after him.  The hard part is coming up with a simple variation that meets the google alert standard...

"Hitleriana" - 265,000 results
"Hitlerum" - 109,000 results
"Hitleria" - 20,800 results
"Hitlerii" - 7,750 results
"Hitlerera" - 5,730 results
"Hitlerica" - 5,220 results
"Hitlerium" - 4,230 results
"Hitlerina" - 3,360 results
"Hitleritis" - 1,740 results
"Hitlerana" - 676 results
"Hitlerania" - 74 results
"Hitlerpus" - 61 results
"Hitlerea" - 48 results
"Hitleranda" - 38 results
"Hitlereana" - 34 results
"Hitlerensis" - 32 results
"Hitlerosa" - 26 results
"Hitlerata" - 16 results
"Hitleruma" - 15 results
"Hitlerense" - 8 results
"Hitleroba" - 6 results
"Hitleratus" - 6 results
"Hitlereus" - 6 results
"Hitleronia" - 5 results
"Hitlerosis" - 5 results
"Hitleriola" - 5 results
"Hitlergia" - 5 results
"Hitlerrhea" - 3 results
"Hitleretto" - 3 results
"Hitleriasis" - 2 results
"Hitlertata" - 2 results
"Hitlerosus" - 0 results
"Hitlereata" - 0 results
"Hitleretia" - 0 results
"Hitleralis" - 0 results
"Hitleresia" - 0 results
"Hitlererus" - 0 results
"Hitleradia" - 0 results
"Hitlerydia" - 0 results
"Hitleronas" - 0 results
"Hitlereuca" - 0 results
"Hitlerantha" - 0 results
"Hitlerichea" - 0 results
"Hitleridium" - 0 results
"Hitleroccus" - 0 results
"Hitlerasmus" - 0 results
"Hitlerescens" - 0 results

I wasn't able to find a Googlewhackblatt but I did manage to create several.

There are quite a few different options to choose from...but I think I'll go with "Hitlerpus".  Of course anybody is welcome to try and change it.  After all, there's always room for improvement.  But if you're successful I'll probably complain out of habit.

We've already got a species..."chanidget"...so if we add it to our newly minted genus we get...

Hitlerpus chanidget

Next we need to come up with a species name for Beckert's variety of economic ignorance.  We might as well continue with the current naming system and name it after him.  Let's see... there are only 12 results for "beckertii"...which is perfectly acceptable.  This would give us...

Hitlerpus beckertii

Can you think of any other closely related varieties of economic ignorance?  I can... The Ingenious Gentleman George Monbiot...
It was neither capitalism nor communism that made possible the progress and the pathologies (total war, the unprecedented concentration of global wealth, planetary destruction) of the modern age. It was coal, followed by oil and gas. The meta-trend, the mother narrative, is carbon-fuelled expansion. Our ideologies are mere subplots. - George Monbiot, The Impossibility of Growth
Monbiot must have studied at Underpants Gnome University...

1. Steal underpants
3. Profit!

1. Find coal, oil, gas
3. Progress!

What's step 2?  
Moreover, what is a resource today may cease to be one tomorrow, while what is a valueless object today may become valuable tomorrow. The resource status of material objects is therefore always problematical and depends to some extent on foresight. An object constitutes wealth only if it is a source of an income stream. The value of the object to the owner, actual or potential, reflects at any moment its expected income-yielding capacity. This, in its turn, will depend on the uses to which the object can be turned. The mere ownership of objects, therefore, does not necessarily confer wealth; it is their successful use which confers it. Not ownership but use of resources is the source of income and wealth. - Ludwig M. Lachmann, The Market Economy and the Distribution of Wealth
Having coal, oil or gas isn't nearly as important as how they are used...and how they are used is a function of difference.

Monbiot clearly does not understand that progress depends on difference...so his economic ignorance falls into the genus Hitlerpus.  But it's not the species chanidget because he doesn't attribute our progress to the government.  Neither is it the species beckertii because he doesn't attribute our progress to slavery.  Instead,  he attributes our progress to "carbon-fuelled expansion"...which we do not have a species for.  So here we go again...

Hitlerpus monbiotus

As I write this there is exactly one result for "monbiotus" so I did manage to find a Googlewhackblatt.  Except, the word "monbiotus" doesn't seem to be anywhere on the page, which, coincidentally enough, is somewhat relevant... Ten British species now have an identity we care about.

At this point there might be some confusion.  Yes, I'd like to eradicate Hitlerpus monbiotus but no, I do not want to eradicate George Monbiot.  Therefore, George Monbiot is not Hitlerpus monbiotus.  He is simply suffering from Hitlerpus monbiotus.  The point of describing and labeling his disease is to facilitate the discovery of a cure.

Right now most of the population is suffering from some variety of Hitlerpus.  People will say that they appreciate, respect and understand the value of difference...but the truth can easily and quickly be discerned simply by asking them whether we should be able to directly allocate our taxes.  Given that the tax choice facebook page only has 74 likes...it's painfully obvious that the vast majority of people really have no idea how they benefit from difference.  This type of economic ignorance is extremely harmful.  Not only do we miss out on much greater levels of prosperity, but society is not inoculated against future Hitlers.  Therefore, I think that a taxonomy of economic ignorance might even be more useful and necessary than a taxonomy of biology.  

Hopefully this preliminary taxonomy of economic ignorance will help promote some interest in the identification, naming, studying and eradication of strains of thought that are based on a failure to understand that progress depends on difference.

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