Jumping right in:

Acknowledge Biases

Have you ever tried to do something objectively. It’s impossible. We might try, but how do we know when we’ve failed to compensate for a bias or when we’ve over compensated. Russ Roberts taught me 1) all people have biases, 2) all analysis is by people, & 3) analysis should be interpreted conditional on the bias – not discarded because of it.

The only people who don’t have biases are persons without values – which is no one. We all have apriori beliefs that color the way that we understand the world. Recognizing that is the first step. The second step is to evaluate your own possible biases or the bias of someone’s work. They may have blind spots or points of overemphasis. And that’s OK. One of the best ways to detect and correct these is to expose your ideas and work to a variety of people. It’s great to talk to new people and to have friends who are different from you. They help you see what you can’t.

Finally, because biases are something that everyone has, they are not a good cause to dismiss a claim or evidence. Unless you’re engaged in political combat, your role is usually not to defeat an opponent. Rather, we like to believe true things about the world. Let’s get truer beliefs by peering through the veil of bias to see what’s on the other side. For example, everyone who’s ever read Robert Higgs can tell that he’s biased. He wants the government to do much less and he’s proud of it. That doesn’t mesh well with many readers. But it’d be intellectually lazy to dismiss Higgs’ claims on these grounds. Higgs’ math and statistics work no differently than his ideological opponents. It’s important for us to filter which claims are a reflection of an author’s values, and the claims that are a reflection of the author’s work. If we focus on the latter, then you’ll learn more true things.

Know Multiple Models

In economics, we love our models.  A model is just a fancy word which means ‘argument’. That’s what a mathematical model is. It’s just an argument that asserts which variables matter and how. Models help us to make sense of the world. However, different models are applicable in different contexts. The reason that we have multiple models rather than just one big one is because they act as short-cuts when we encounter different circumstances. Understanding the world with these models requires recognizing context clues so that you apply the correct model.

Models often conflict with one another or imply different things for their variables. This helps us to 1) understand the world more clearly, and 2) helps us to discriminate between which model is applicable to the circumstances. David Andolfatto likes to be clear about his models and wants other people to do the same. It helps different people cut past the baggage that they bring to the table and communicate more effectively.

For example, power dynamics are a real thing and matter a lot in personal relationships. I definitely have some power over my children, my spouse, and my students. They are different kinds of power with different means and bounds, but it’s pretty clear that I have some power and that we’re not equal in deed. Another model is the competitive market model that is governed by property rights and consensual transactions. If I try to exert some power in this latter circumstance, then I may end up not trading with anyone and forgoing gains from trade. It’s not that the two models are at odds. It’s that they are theories for different circumstances. It’s our job to discriminate between the circumstances and between the models. Doing so helps us to understand both the world one another better.

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