This is extraordinary. Alex Tabarrok and Tyler Cowen recently released a little promo video, to tout their new “Marginal Revolution University” course on microeconomics (as well as their intro textbook). In it they bend over backwards to make economics seem fun, friendly and non-intimidating. Practically every sentence is accompanied by a cutesy little animation, designed to make the study of economics seem as non-threatening as possible. And yet halfway through the video, they ruin it all, by saying something that is guaranteed to alienate most normal people. See if you can spot the faux pas:
I actually think the whole segment from 1:10 to 2:22 is fairly ill-advised, but there are two points where it’s terrible. (Summary, for those who don’t want to watch: They tell the story of how 19th century British sea captains transporting prisoners to the penal colony in Australia used to mistreat the passengers, resulting in very high mortality rates. Various attempts were made to correct the problem: “the clergy appealed to the captains’ sense of humanity,” “the British parliament passed regulations requiring better treatment of the prisoners,” but “unfortunately, those attempted solutions simply didn’t work.” So finally someone turned to an economist (supposedly), who suggested that the captains be paid, not for the number of prisoners who embark, but rather the number who arrive alive. This worked wonders, and so the triumphant conclusion, that “economy beat sentiment and benevolence” — the final quote from Edwin Chadwick, at 2:21.)
What is wrong with this? What Tabarrok and Cowen are trying to communicate here is the simple idea that “incentives matter.” This is essentially a methodological point about how economics is done, and as such, should be presented in a way that makes it as platitudinous as possible. After all, it is not one of the conclusions of economic analysis that “incentives matter,” but rather one of the foundational postulates. So you don’t want to present it in a way that makes it seem controversial. And of course, there are many ways of doing that, since the problem with the public generally is not that they think incentives don’t matter at all – everyone knows, for example, that people are more likely to work for you if you offer to pay them – it’s just that they underestimate the power of incentives, or they don’t see some of the unexpected ways in which incentives affect social behaviour. So the right way to present it is to say “here’s something that we can all agree upon – but have you thought through the consequences of it? Perhaps not. That’s what economists do.”
But Tabarrok and Cowen are unable to restrain themselves, and so instead of trying to make the action theory seem platitudinous, they present it in a way that makes it seem both morally suspect and politically conservative. Most importantly, they set up a contrast between “economy” and morality, with the latter being dismissed somewhat contemptuously as mere“sentiment” (as though people were being tender-minded fools for thinking that there should be moral rules that prohibit killing people, as opposed to just cash payments for not killing them.) By buying into Chadwick’s contrast between “economy” and “benevolence,” Tabarrok and Cowen are accepting the narrowest reading of the “incentive” concept, that which identifies it, not just with people’s self-interest, but with their pecuniary interests.
Second, there is the (again somewhat contemptuous) reference to the British parliament passing ineffective “regulations.” The fact that Tabarrok and Cowen use this term, which is anachronistic in the context, shows that they can’t resist getting a little dig in against the left, with its tender-hearted conviction that government can be an effective force for good in the world. But this is not the right place to be doing it. Again, it is important to be able to present the foundational ideas of economics in a way that makes them neutral with respect to political ideology. Tabarrok and Cowen though are presenting these ideas in a way that makes them seem inherently anti-government, or right wing. In this respect, they are jumping the gun. Enthusiasm for the market is supposed to be one of the conclusions of economic analysis, not one of its presuppositions. If you present it as one of the basic assumptions, then people who are not already disposed to accept that point of view will simply tune out the whole thing.
To sum up, Tabarrok and Cowen take what should be a platitudinous claim about human motivation and present it in a way that makes it seem both controversial and ideologically suspect. As a result, their offer to “retrain your brain to look at the world in a different way” is one that will strike many people as unwelcome, if not positively nefarious.
Thanks to the side interest I have in writing popular economics, I’ve had a lot of conversations with economists who are struggling to understand why it is that they do such a bad job of promoting their discipline. Part of the problem is certainly that so many are unable to present the methodological foundations of the discipline in a way that is morally and politically neutral. Instead, they wind up taking their contempt or condescension towards morality, as well as their enthusiasm for the free market, as though it were, as it were, “baked into the cake.” Unfortunately, if students get fed moral skepticism and right-wing ideology – or if not exactly right-wing ideology, then something that sounds an awful lot like right-wing ideology – on the very first day of class, many will conclude that economics as a whole is unworthy of their attention.
I guess if I were to reach for a slogan, it would be that “morality matters.” Which is not to say that it is the only thing that matters (after all, self-interest also matters). It is just that, in my experience, casually offending people’s moral sensibilities does not actually put them in a mood that is very receptive to argument. Unfortunately, too many economists either never had such sensibilities, or else lost them so long ago that they can no longer remember what it was like to have them. (For example, right after the line that Tabarrok and Cowen quote, Chadwick goes on to say that, even if the payments to the sea captains did not result in the survival of every convict, it nevertheless “secured to every poor man who died at least one sincere mourner.” Now lots of economists might find that kind of ha-ha funny, but it is important to remember that there are many people who find it simply appalling, and that this response should not be dismissed as mere sentimentality.)
This is actually why, in my own attempt to present the basic ideas of economics in an accessible way (in Filthy Lucre), I bent over backwards to avoid using the sort of example that Tabarrok and Cowen pick. I chose rather to use the example of people’s behaviour in traffic to illustrate the key concepts, not just because you can see really clearly how incentives structure behaviour (e.g. people want to get to where they are going as quickly as possible, and so they act quite instrumentally), but also to take an entirely non-pecuniary example, so as not to trigger any of the complex moral attitudes that people have towards money. And needless to say, I didn’t say anything dismissive about morality, or set things up as though there was some sort of a contest going on between “economy” and “benevolence.”
Anyhow, if you want a 3-minute introduction on “how not to introduce students to economics,” I highly recommend this video.