Economists: We Need to Do Better

Gabriel Mihalache on trade:

In his latest post, The economic isolationists are winning, Prof. Mankiw worries that his side has lost on the free trade & immigration debate. That is true, to some large extent, but there’s something else…

I wouldn’t take this poll to mean that the Rodriks and the Borjas of the US academic establishment are winning. No, it’s the Lou Dobbses who are. The different is big, I assume you’ll agree.

Sure, there will be isolationist policy, but it will be informed by vulgar prejudice, not 2nd best considerations, optimal tariffs, price theory-based incentives or the like.

Has the economic profession as a whole failed on this debate, regardless of side? … Maybe!

Gabriel is right, or at least he would be if he replaced the Maybe! with a YES!!.

Economists have failed this debate, as we've failed in many other debates, such as in marijuana legalization and trade issues like the softwood lumber dispute. But why have we failed?

I believe there are two reasons.

1. Economists are really lousy at presenting ideas to the general public.

There are two books that every economist who wants to present ideas to the general public should read. The first is Made to Stick by Chip Heath and Dan Heath. From their website:

"Why do some ideas thrive while others die? And how do we improve the chances of worthy ideas? In Made to Stick, accomplished educators and idea collectors Chip and Dan Heath tackle head-on these vexing questions. Inside, the brothers Heath reveal the anatomy of ideas that “stick” and explain sure-fire methods for making ideas stickier, such as violating schemas, using the Velcro Theory of Memory, and creating “curiosity gaps.”

The book is full of fascinating stories; this particular one from the introduction is my favorite:

Silverman knew, because of his organization's research, that the popcorn on his desk was unhealthy... His job was to figure out a way to communicate this message...

...a normal diet [should] contain no more than 20 grams of satured fat each day... the typical bag of popcorn had 37 grams.

The challenge, Silverman realized, was that few people know what "37 grams of saturate fat" means.. Is 37 grams good or bad?

Silverman could have created some kind of visual comparison - perhaps an advertisement comparing the amount of saturated fat in the popcorn with the USDA's recommended daily allowance. Think of a bar graph...

But that was too scientific somehow. Too rational. The amount of fat in this popcorn was, in some sense, not rational. It was ludicrous. The CSPI needed a way to shape the message in a way that fully communicated this ludicrousness...

Here's the message it presented: "A medium-sized 'butter' popcorn at a typical neighborhood movie theatre contains more artery-clogging fat than a bacon-and-eggs breakfast, a Big Mac and fries for lunch, and a steak dinner with all the trimmings - combined!

The folks at CSPI didn't neglect the visuals - they laid out the full buffet of greasy food for the television cameras. An entire day's worth of unhealthy eating, displayed on a table. All that saturated fat - stuffed into a single bag of popcorn...

The idea stuck. Moviegoers, repulsed by these findings, avoided popcorn in droves. Sales plunged...

The second book was written by my Facebook friend Warren Kinsella. His book The War Room may at first seem to be a (very entertaining) book about Canadian politics, but there is a great deal of common-sense information on how to effectively get your message out:

FACTS TELL, BUT STORIES SELL...

If there is any truth left in politics... it is that facts tell, but stories sell...

...Michael Marzolini, a smart young guy from Toronto, was the Liberal Party's pollster... I don't know if... Marzolini was pulling our leg, but here's what he said "Forty percent of Canadians don't know how many millions there are in a billion."...

Everything that corporations and political parties have been saying to regular folks has been wrong, wrong, wrong, I said to myself and possibly out loud. They have been speaking in tongues. No wonder consumers and voters are so pissed off...

Facts, figures, statistics, charts, graphs, decimal poings and sums of money - sums of money so enormous that no one can imagine themselves ever seeing that much money in one place, let alone touching it - are the things that corporations and the media and governments have traditionally used to communicate with millions of people. But the people weren't hearing what they had to say - either because the message was disconnected from the reality of theit daily lives or because they didn't fully understand it. The public dialogue, which determines the public agenda, had become broken.

This helps explain why we economists are losing. A common attempt to get our message across for economic policy wonks is to write a long technical piece and publish it someplace like The Journal of Economic Analysis and Policy that is only read by other policy wonks (including me - it's a great journal). But that doesn't help us get our ideas across to the public. We might as well be going to the Elks Club in Laramie, Wyoming and giving a talk on the estate tax entirely in Albanian.

2. The incentives for academic economists are really, really screwed up.

Say you're a young economist, fresh out of grad school, and you publish a highly-technical article in a top technical journal such as Econometrica. Your article might get read by 1000 people, only 50 of which have any idea what you're talking about. It'd be a great boost for your career and put you on the road to getting tenure.

Now suppose instead you write an editorial for USA Today on a public policy issue. Your editorial is read by a few hundred thousand people and gets a number of them to look at an important issue from a whole new perspective. If you're lucky, you'll get a pat on the back from the chair of your department. If you're less lucky, you might get told to stick to more serious work.

Given the incentives presented to academic economists, is it really any surprise we don't put more time and effort into winning hearts and minds?