It is no secret that I am a partisan for Saltwater Macroeconomics as a better route to insight into business cycles than Freshwater Macroeconomics. (For a good sense of my own views, see “On the Great Recession,”“The Neomonetarist Perspective” and “Why I am a Macroeconomist: Increasing Returns and Unemployment.”) Yet, as Noah Smith and I wrote in “The Shakeup at the Minneapolis Fed and the Battle for the Soul of Macroeconomics,”
We are strong proponents of the idea that scientific progress—especially in economics—depends on a vigorous debate among widely divergent points of view.
The analogy that comes to my mind is biological evolution. Genetic variation is the crucial raw material on which natural selection operates in order to raise overall fitness, with all of the fascinating complexity of life that often accompanies higher fitness. Similarly, variation in viewpoints and approaches is the crucial raw material for the advances that result from scientific debate.
One of the key drivers of biological evolution is the need for disease resistance. (Indeed, the Red Queen Hypothesis holds that the key evolutionary driver for the origins of sexual reproduction was the need to outmaneuver parasites.) In agriculture, monocultures that gives a large share of a crop an almost identical genetic makeups run the risk of disastrous blights. In economics, having everyone look at things the same way would risk having no one prepared to understand new circumstances that the world might find itself in. As Noah and I wrote:
Scientifically, Freshwater macroeconomics plays an important role in laying out how the world should be if everyone thought like an economist.
In the future, more people may think much more like economists. And as I point out to my students, when talking about Real Business Cycle models, these models (done as well as possible, of course) establish, the benchmark of what the natural level of output is. And the dynamics of the natural level of output and the natural level of other macroeconomic variables in turn describe how the economy will behave in the future when (I optimistically predict) central banks will be much better at their task of keeping the economy at the natural level of economic activity. We need Freshwater Macroeconomics (again, done as well as possible) to be well-prepared for that possible future. (The blight in the analogy I am pursuing would be a blight on models that focus on the consequences of an output gap in a future when there aren’t much in the way of output gaps any more because monetary policy is so good.)
One of the counterintuitive logical consequences of the importance of diversity of approaches is that diffusing best practices too rapidly can actually be a bad thing. John Stuart Mill explains, in On Liberty, Chapter III: “Of Individuality, as One of the Elements of Well-Being,” paragraph 18 and 19:
The circumstances which surround different classes and individuals, and shape their characters, are daily becoming more assimilated. Formerly, different ranks, different neighbourhoods, different trades and professions, lived in what might be called different worlds; at present, to a great degree in the same. Comparatively speaking, they now read the same things, listen to the same things, see the same things, go to the same places, have their hopes and fears directed to the same objects, have the same rights and liberties, and the same means of asserting them. Great as are the differences of position which remain, they are nothing to those which have ceased. And the assimilation is still proceeding. All the political changes of the age promote it, since they all tend to raise the low and to lower the high. Every extension of education promotes it, because education brings people under common influences, and gives them access to the general stock of facts and sentiments. Improvements in the means of communication promote it, by bringing the inhabitants of distant places into personal contact, and keeping up a rapid flow of changes of residence between one place and another. The increase of commerce and manufactures promotes it, by diffusing more widely the advantages of easy circumstances, and opening all objects of ambition, even the highest, to general competition, whereby the desire of rising becomes no longer the character of a particular class, but of all classes. A more powerful agency than even all these, in bringing about a general similarity among mankind, is the complete establishment, in this and other free countries, of the ascendancy of public opinion in the State. As the various social eminences which enabled persons entrenched on them to disregard the opinion of the multitude, gradually become levelled; as the very idea of resisting the will of the public, when it is positively known that they have a will, disappears more and more from the minds of practical politicians; there ceases to be any social support for nonconformity—any substantive power in society, which, itself opposed to the ascendancy of numbers, is interested in taking under its protection opinions and tendencies at variance with those of the public.
The combination of all these causes forms so great a mass of influences hostile to Individuality, that it is not easy to see how it can stand its ground. It will do so with increasing difficulty, unless the intelligent part of the public can be made to feel its value—to see that it is good there should be differences, even though not for the better, even though, as it may appear to them, some should be for the worse. If the claims of Individuality are ever to be asserted, the time is now, while much is still wanting to complete the enforced assimilation. It is only in the earlier stages that any stand can be successfully made against the encroachment. The demand that all other people shall resemble ourselves, grows by what it feeds on. If resistance waits till life is reduced nearly to one uniform type, all deviations from that type will come to be considered impious, immoral, even monstrous and contrary to nature. Mankind speedily become unable to conceive diversity, when they have been for some time unaccustomed to see it.
However wrongheaded they may seem, minority viewpoints, especially those articulately advanced, are to be treasured as a key to scientific advance and resiliency. Similar things can be said for minority political, cultural, and religious viewpoints. For example, whatever my differences of opinion with the Mormon Church, it is a prodigious generator of important social experiments, many of which may have turned up useful ways of doing things. See for example
- The Message of Mormonism for Atheists Who Want to Stay Atheists
- How Conservative Mormon America Avoided the Fate of Conservative White America
(See also the discussion of non-monetary motivations in Scott Adams’s Finest Hour: How to Tax the Rich.) I am confident that those who know them better could point to similar contributions to the rich array of alternatives for ways to organize society that have been identified by other minority religions. (Hint for comments!)
As an example in the cultural vein, while some presume to make strong value judgments about different genre’s of music. I have found many German economists to be scathing in their view of Schlager music, for example, in an intensified version of the way many highly educated Americans look down on Country music as low class. My attitude is that substantial numbers of people enjoy a particular type of music, there is likely to be something to it. I listen trying to find the angle from which I too can get that kind of pleasure from each genre. I may not succeed, and then retain a preference for other music instead, but it is worth giving each genre a good try.
In politics, of course the disdain with which the Left looks upon the Right and the Right looks upon the left has been a target of mine since the beginnings of this blog. I insist that there are crucial insights on both sides of the political spectrum. Our nation and all other democratic nations would go disastrously wrong in their policies if either side of the political spectrum were eradicated from the range of opinions expressed in political action.
One of the most common temptations human beings face is the temptation to try to make people saying something disagreeable shut up. Another common temptation is to try to make people doing something that seems disgusting cease and desist. But stop and consider: a point of view (with its attendant insights) or a way of life (with its attendant practices) that does not currently agree with your own views may someday be your salvation.