Dismal Indeed

Thomas Friedman is making us stupid.

Columns by Friedman—a guy with no actual economics expertise (his degrees are in Mediterranean and Middle East studies)—run alongside those by Nobel Laureate Paul Krugman in the New York Times, America’s newspaper of record. But while Krugman’s corpus includes academic articles with titles like “Scale economies, product differentiation, and the pattern of trade,” Friedman apparently conducts research by flying to “exotic” countries, eating lunch with businessmen, and expressing wonderment at the omnipresence of advertisements for cell phones and fast food restaurants. Yes, Tom, they have Pizza Hut in India too. The juxtaposition on the page seems a bit odd: the sage dispenses sharp insights and canny criticism, while the mountebank, a few column inches over, trundles along rehashing tired themes with new window dressing.

Yet Mr. Friedman—easy as it is to single him out for his preposterous pronouncements and puréed metaphors—is just the particularly heinous exemplar of an insidious trend. A horde of self-proclaimed non-experts, and some academics as well, have popularized economics, casting doubt and caution aside as relics of Carlyle’s dismal science. Amazon.com now has an entire section devoted to “pop economics,” including Stephen Levitt and Stephen Dubner’s famous Freakonomics and a host of copycats— books like The Undercover Economist: Exposing why the Rich are Rich, the Poor are Poor, and Why You Can Never Buy a Decent Used Car! or Hidden Order: The Economics of Everyday Life, or even, Naked Economics: Undressing the Dismal Science.

Meanwhile, TV hosts like CNN’s Lou Dobbs or CNBC’s inimitable Jim Cramer purport to analyze pressing issues. Dobbs’s frequent rants on immigration and global warming—the former an invasion, the latter a hoax, both threatening truth, justice, and the American way—seem preposterous but, according to Nielsen ratings, around a million viewers tune in nightly to soak up his wisdom. Cramer, on the other hand, has become popular for his investment advice and financial analysis, dispensed in the reassuring manner of a spastic orangutan. On March 11, 2008, for instance, he advised viewers that “Bear Stearns is not in trouble.” The next week, the bank collapsed. Smashing things with a hammer—as Cramer is wont to do—is not a sign of accuracy or prophetic ability.

The aim of the exercise—to make a dreary topic entertaining and relevant to the common man—seems innocuous enough, and if done properly it is indeed a worthy task. But all too often economics is not fun, anecdotes are not representative, problems are complex, and these commentators do their readers a disservice by suggesting that things are otherwise. A little knowledge, the cliché goes, is a dangerous thing; by skimming the surface of topics like finance or immigration when the audience has little knowledge of the underlying principles, they spurn caution in search of a quick buck.

The counterargument is that this popularization profits society by introducing economic concepts and a critical mode of thinking to the common man. It is a nice theory, but one that does not really hold up. It is not that getting the man on the street interested in economic issues is inherently bad. To the contrary: if more people thought economically about national issues, we would all be much better off. Yet all too often “pop economics” replaces, rather than reinforces, more authoritative studies. The World is Flat, Friedman’s breathy paean to globalization, has sold over two million copies in several editions, more than Joseph Stiglitz’s twin tomes Globalization and its Discontents and Making Globalization Work, and Jagdish Bhagwati’s In Defense of Globalization combined.

Instead of getting primed on debates over the uneven distribution of gains from globalization, readers of Friedman receive lectures on the unbridled joys of the “Wal-Mart Symphony,”—a Cantata in Supply-Chain Efficiency Minor—and the somewhat un-rigorous “Dell Theory of Conflict Prevention,” the aphorism that “No two countries that are both part of a major supply chain, like Dell’s, will ever fight a war against each other…” It is this kind of radical oversimplification that makes Friedman so popular—his theories seem childish and his evidence is purely anecdotal, but they feel like they’re true. If there were some evidence to suggest readers really were moving up from pop to crunch, excessive “cool” appeal might be forgivable. But if more than a fraction of Freakonomics or The World is Flat readers are perusing Nash on game theory, Ohlin on international trade, or Samuelson on possibility functions, I will eat my economics textbook.

Instead of educating the public, this trend has created an impression of false knowledge; instead of teaching us how little we know, “pop economics” feeds us tidbits of “fact” that buttress us against those thinkers who actually seek to convey meaning, rather than to entertain. Some authors, on the other hand, have avoided the easy trap of trivia; Nassim Nicholas Taleb, in his 2007 book The Black Swan, embraces uncertainty and argues against complacent acceptance of the apparent status quo. He contends that all too often induction—expecting tomorrow to be the same as every other day—gets us into trouble, especially in finance, where all too often analysis consists of extending an upward-trending line into the future. Just because a firm has been profitable for a few years does not mean it will continue to be; the world does not operate according to convenient Gaussian distributions or elegant models with clean, simple assumptions. Unlike typical pop economists, Taleb maintains respect for the complexity of the problems he addresses.

Now, to be fair, Jim Cramer did run a successful hedge fund, and Stephen Levitt is a renowned economist, and Lou Dobbs really does have an economics degree. It’s not that one needs to be an academic to dispense economic wisdom—Treasure Secretary Tim Geithner isn’t formally trained—or that those who criticize academic thought are destroying discourse—Taleb takes great issue with economic “experts” whose financial models bear no relation to reality, going so far as to label the models of Markowitz and Sharpe, Nobel winners, as “hot air” and “quack remedies.” There’s a difference between those, like Dobbs and Friedman, who revel in their everyman status and bite their thumbs at expertise as such, and those like Levitt who, though experts themselves, devalue expertise in an attempt to reach a wider audience.

The problem with Freakonomics—chock full of fascinating factoids as it is—is that it’s almost too successful. The book, which peaked at #2 on the New York Times bestseller list, does away with much of the traditional tedium of economics research—endless modeling and revisions of models—in favor of snappy, easily digestible bites of fact (how real estate agents are like Ku Klux Klansmen, for example). Stephen Dubner, journalist, and Stephen Levitt, economist behind the magic, reduce human decision-making processes to pure rational choice mechanisms wherein we maximize gain and minimize loss (both as calculated by the authors). If their data doesn’t always add up perfectly, as was revealed regarding their chapter on ties between abortion and falling crime rates… well, who cares, because it’s the principle that matters. Don’t trust those crusty old economists with their tomes of numbers—they’re boring and old, and did we mention boring. Freakonomics itself describes this phenomenon; Levitt and Dubner note that “an expert whose argument reeks of restraints and nuance often doesn’t get much attention. An expert must be bold if he hopes to alchemize his homespun theory into conventional wisdom.” It’s pitiful that authors who embrace uncertainty and rebuke economic hubris must struggle to make their voices heard over the general din; Freakonomics isn’t helping. I’ll confess to having enjoyed much of the book, and others of its ilk—but I won’t confuse it with real social science research.

The essential problem, then, is not any particular pop economist, or even the existence of the genre, but the effects that these pundits have on public discourse. Simultaneously, as the Freakonomics genre elevates the plebeian reader to the stature of erudite economist (as though possession of isolated facts were sufficient to decrypt the secrets of the dismal science and then debate public policy), the Friedmans and Dobbses reduce the value of actual expertise by shrinking complex questions down to sketches and sermons. Friedman’s blithe confidence in America (“the world’s dream machine”), globalization, and the inevitability of a green revolution (his newest book, Hot, Flat, and Crowded: Why We Need a Green Revolution—and How It Can Renew America, might as well be titled Lots, Of, The Same: Why Thomas Friedman Needs a New House—and How He’ll Reprint His Columns in a Book) mirrors Dobbs’s paranoid ravings about illegal immigrants (whom he associates with “communists, socialists, and even anarchists”) in that they feel qualified to dismiss the advice of scholars with years of experience based on mere surface scans of cavernous topics.

What we’re really talking about is devaluation of expertise, and of subtlety and complexity, in keeping with an all-too-familiar American tradition: anti-intellectualism. It happens in history, economics, and science alike. Call it the Wikipedia effect—I’m sure Thomas Friedman would love it. On Wikipedia, saying something, anything, can make it so, no qualifications required. Who needs to read whole books when one can get everything with a Google search? If treated correctly, Wikipedia becomes an invaluable tool for spreading knowledge and spurring further study. But we sometimes treat it as an omniscient cybernetic deity, skipping the oft-excellent bibliographies listed in footnotes and skimming the content for facts, rather than understanding.

It’s the obsession with factoids—or perhaps with truthiness, to borrow from the modern philosophe Colbert—that’s the real symptom. What we want isn’t actually discourse, but pre-packaged arguments, whether on globalization or education or taxes, primed to unleash on our foes without regard for intricacy or skepticism. Economics isn’t an exact science; very rarely, if at all, does it possess any absolute truths. The blithe supposition that it does, that one can speak of “globalization” or “immigration” or even “human beings” as though such convenient constructs could be meaningfully analyzed at the highest levels of abstraction and their behaviors and effects predicted with flawless precision, is a useless and damaging misconception. Reading just Friedman, or listening to just Dobbs, or believing, as Dubner and Levitt seem to, that human action is purely rational and predictable, misses the point entirely. Social science is hardly exact—but like “real” science, it depends completely on slow, measured, data-driven debate and falsification of hypotheses. Nassim Nicholas Taleb manages to be entertaining— cautioning against the “Thanksgiving Turkey” fallacy—and careful at the same time. It’s not easy to balance broad appeal against useful (read: subtle) analysis—but it’s time to tilt those scales back towards sanity.

Oh, and one more thing. If the world is already flat, how can it be getting flatter?