Last week Stephen Moore of the Wall Street Journal wrote an editorial excoriating economists and economic theory. Moore’s arguments essentially amounted to an attempt to discredit economic theory for not aligning with a laypersons conception of “common sense” (or even his own subjective conception of “common sense”). However, there are many problems with such an argument. Firstly, there are many things in life which would not pass a laypersons “common sense” test, but which are otherwise accepted as fact or merely overlooked. Furthermore, if theories of governance should have to conform to a laypersons conception of “common sense”, our evolution as a society would have been severely retarded. There are simply things which require advanced knowledge and experience, and which do not make sense without said knowledge and experience. This is the reason why both governments and corporations elect leaders and supply them with advisers.
To an average layperson (myself included) advanced science such as Physics make as much sense as Egyptian Hieroglyphic’s. However there are many theories that are the product of Physics, which are widely accepted as fact regardless of whether they pass a laypersons “common sense” test. For example, when broken down and without basic knowledge, Newton’s theory of gravity might make as little sense as Keynesian theory. However I have not yet heard a sane argument against it. The same can be said of most religions. While the vast majority of the population routinely accepts religions as true, can they genuinely be said to be logical or “common-sensical”? Why was the phrase “God works in mysterious ways” invented if not to paint over a latent lack of “common sense”?
However all this ignores the main reason we elect leaders and hire specialists to advise them. As I have explained in a previous post, in this age where direct democracy is increasingly possible, we only continue to elect representatives because the average layperson and the mob are not qualified for the role. The average layperson does not have the time, inkling, resources, education or experience to fully comprehend, run and be responsible for a federal government. This goes double for economics. The reason we hire professionals and academics such as Ben Bernanke, Tim Geithner, and Glen Stevens (gov of the RBA) is precisely because their experience and expertise is outside the realm of the average layperson. The reason banks and multinational corporations hire economic advisers is also because it is a specialised role outside the comprehension of even laypeople in the financial field. If economic advice and management was within the ability of a layperson it would make redundant University courses, experts on TV stations and newspapers and especially financial papers such as Stephen Moore’s Wall Street Journal.
In short this was an absurd argument/comment. As I have shown, there are many things in day-to-day life which would defy a laypersons subjective conception of “common sense” but which are routinely accepted. Furthermore, the reason governments, corporations and banks hire economic specialists is because it is an area that requires specialist knowledge. The reason financial newspapers (and other media institutions) such as the Wall Street Journal exist is to provide specialist knowledge and commentary on fields such as economics. It is not valid to argue that something is wrong because it defies “common sense”. Furthermore it is not valid to argue that a layperson’s or the mob’s conception of “common sense” can be considered correct in a field widely regarded as requiring specialist knowledge and expertise.