Saturday, June 30, 2007

"Straight Thinking 101"

Jewish World Review once again provides me with my material. Walter Williams writes an article titled "Straight Thinking 101" which discusses economics, but can be applied to a wide variety of subject matter. I think he gets to the heart of a problem many of us have in our thinking, namely compassion vs. dispassion.

Dr. Williams begins by explaining the difference between positive statements and normative statements and why that is important:
Just about the most difficult lesson for first-year economics students, and sometimes graduate students, is that economic theory, and for that matter any scientific theory, is positive or non-normative. You might ask, "What's this business about positive and normative?" It's easy. Positive statements deal with what was, what is or what will be. Normative, or subjective, statements deal with what's good or bad, or what ought to be or should be. Confusing the two leads to considerable mischief.

The statement "Scientists cannot split the atom" is a positive statement. Why? If there's disagreement with the statement, there are facts to which we can appeal to settle the disagreement — just visit Stanford University's linear accelerator and watch atoms being split. The statement "Scientists shouldn't split the atom" is a normative statement. Why? There are no facts whatsoever to which we can appeal to settle any disagreement. One person's opinion on the matter is just as good as another's.

How about the statement "Gasoline prices are unreasonable"? If some think they're reasonable while others don't, the argument can go on forever without resolution because there are no facts to which we can appeal to settle the disagreement. However, there are facts that tend to back up the statement: Buyers of gasoline prefer lower prices while sellers prefer higher prices.
He then says:
Having explained the difference between positive and normative statements, I tell my students that in no way do I propose that they purge their vocabulary of normative statements. Normative statements are excellent tools for tricking others into doing what you want them to do. I simply caution that in the process of tricking others, there's no need to trick oneself into believing that one normative statement is better or more righteous than another.
With the difference between positive statements and normative statements, Dr. Williams addresses another oft misused word:
A related term that doesn't make much economic sense is the term "need." The implication of an absolute, crying, dying or urgent need is that one cannot do without the need in question. Students sometimes say they absolutely need a car or a cell phone. At that point I ask them, how in the world was it that Gen. George Washington could defeat Britain, the mightiest nation on earth, without a cell phone or a car?

The problem with the term "need" is that it suggests there are no substitutes for the item in question. Thus, people will pay any price for it; however, the law of demand says that at some price, people will take less of something, including none of it. In response, a student might say, "Diabetics can't do without insulin" or "People can't do without food." I say, "Yes, they can; diabetics have been doing without insulin for thousands of years." In some poor African countries, people do without food. Of course, the results of doing without insulin or food are indeed unpleasant, but the fact that the results are unpleasant doesn't require us to deny that non-consumption is a substitute for consumption. Again, I tell my students not to purge their vocabulary of crying, dying and urgent needs; just don't trick yourself while you're tricking others.

I think Dr. Williams' closing paragraph is extremely important for all to keep in mind:
You say, "Williams, it doesn't sound like economics is a very compassionate science." You're right, but neither is physics, chemistry or biology. However, if we wish to be compassionate with our fellow man, we must learn to engage in dispassionate analysis. In other words, thinking with our hearts, rather than our brains, is a surefire method to hurt those whom we wish to help.

There are times to think with the heart, usually on a personal level, and there are times to think with the brain, most often when formulating public policy.

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