How to Share Hard Ideas

Paul Krugman, economist, wrote an essay in 1996 called "Ricardo's Difficult Idea". It's about Comparative Advantage, and more generally about how to help smart people understand non-obvious concepts, and in particular how to explain model-based thinking. BLUF:

From the beginning of his discussion, Krugman's diagnosis:

At the deepest level, opposition to comparative advantage – like opposition to the theory of evolution – reflects the aversion of many intellectuals to an essentially mathematical way of understanding the world. Both comparative advantage and natural selection are ideas grounded, at base, in mathematical models – simple models that can be stated without actually writing down any equations, but mathematical models all the same. The hostility that both evolutionary theorists and economists encounter from humanists arises from the fact that both fields lie on the front line of the war between C.P. Snow's two cultures: territory that humanists feel is rightfully theirs, but which has been invaded by aliens armed with equations and computers.

... and from his conclusion, Krugman's prescription:

5. What can be done?

I cannot offer any grand strategy for dealing with the aversion of intellectuals to Ricardo's difficult idea. No matter what economists do, we can be sure that ten years from now the talk shows and the op-ed pages will still be full of men and women who regard themselves as experts on the global economy, but do not know or want to know about comparative advantage. Still, the diagnosis I have offered here provides some tactical hints:

(i) Take ignorance seriously: I am convinced that many economists, when they try to argue in favor of free trade, make the mistake of overestimating both their opponents and their audience. They cannot believe that famous intellectuals who write and speak often about world trade could be entirely ignorant of the most basic ideas. But they are – and so are their readers. This makes the task of explaining the benefits of trade harder – but it also means that it is remarkably easy to make fools of your opponents, catching them in elementary errors of logic and fact. This is playing dirty, and I advocate it strongly.

(ii) Adopt the stance of rebel: There is nothing that plays worse in our culture than seeming to be the stodgy defender of old ideas, no matter how true those ideas may be. Luckily, at this point the orthodoxy of the academic economists is very much a minority position among intellectuals in general; one can seem to be a courageous maverick, boldly challenging the powers that be, by reciting the contents of a standard textbook. It has worked for me!

(iii) Don't take simple things for granted: It is crucial, when trying to communicate Ricardo's idea to a broader audience, to stop and try to put yourself in the position of someone who does not know economics. Arguments must be built from the ground up – don't assume that people understand why it is reasonable to assume constant employment, or a self-correcting trade balance, or even that similar workers tend to be paid similar wages in different industries.

(iv) Justify modeling: Do not presume, as I did, that people accept and understand the idea that models facilitate understanding. Most intellectuals don't accept that idea, and must be persuaded or at least put on notice that it is an issue. It is particularly useful to have some clear examples of how "common sense" can be misleading, and a simple model can clarify matters immensely. (My recent favorite involves the "dollarization" of Russia. It is not easy to convince a non-economist that when gangsters hoard $100 bills in Vladivostock, this is a capital outflow from Russia's point of view – and that it has the same effects on the US economy as if that money was put in a New York bank. But if you can get the point across, you have also taught an object lesson in why economists who think in terms of models have an advantage over people who do economics by catch-phrase). None of this is going to be easy. Ricardo's idea is truly, madly, deeply difficult. But it is also utterly true, immensely sophisticated – and extremely relevant to the modern world.

(cf OptiMizers (2001-04-01), AdvantEdge (2001-04-15), Insight Modeling (2019-12-31), ...) - ^z - 2021-04-12