Experts: the Caprice challenge

What do experts know? This question arises from the reposting the other day of an exchange between Caprice and Dr Sarah Jarvis, wherein Caprice argued for an early lockdown and mask-wearing, only to be opposed by the doctor. In hindsight, it looks as if Caprice might have been more correct. Which poses the question, for economists as much as other scientists: how should we talk to lay-people? Here are some suggestions.

First, know what you know and what you don’t. As Charlie Munger said, “it’s not a competency if you don’t know the edge of it.” Economists, for example, do not know how to forecast recessions. We should admit this fact.

In particular, we should know the difference between the map and the terrain. The doctor told Caprice: “Unless you have read every…statistical modelling paper that’s come out you cannot argue with me.”

One problem here is that you should not close down debate by appealing to expertise or credentials. The only expertise that matters is that you can demonstrate.

Another problem is that it poses the question rightly raised (pdf) by Dani Rodrik: how do we choose which model to apply to which bit of reality? Even today, there is much that’s not known about Covid-19. The question of which model to chose to describe its progress was therefore one on which scientists should have been humble  - certainly more so than Dr Jarvis. When you don’t know what to do, erring on the side of caution – an early lockdown in this case – is not unreasonable.

One example of this problem in economics is that we had a good model of how globalization creates gains from trade and hence potential Pareto improvements. This model, however, over-estimated the ability of resources to shift to new occupations. Instead, as Banerjee and Duflo wrote:

When bad news arrives in the form of greater competition from outside, instead of embracing it and moving resources to their best possible use, there is a tendency to hunker down and hope the problem will go away on its own. Workers are laid off, retiring workers are not replaced, and wages start to drift down. (Good Economics for Hard Times, p65)

Economists therefore under-weighted the prevalence (and anger) of the “left-behind” – which gave us Trump and Brexit. Our talk of GDP growth invited the reply: “That’s your bloody GDP. Not ours.”

Expertise, especially in the sense of a command of theoretical models, can blind us to ground truth. And lay-people sometimes know this better.

It can also cause us to under-estimate the importance of tacit knowledge. Sure, Caprice has no book-learning of epistemology, but she had a hunch that something big was needed. And tacit knowledge is important. Entrepreneurship rests upon hunches that new processes are possible or that new products are wanted.

This mix of ground truth and gut feel means we should listen to lay people. This is especially true of the totality of them when the conditions are fulfilled for there to be wisdom in crowds. Consumer spending relative to wealth can help predict equity returns, for example, because aggregate spending embodies the dispersed ground truth and gut feels people have about the future. Experts lack such knowledge.

In saying all this, I’m echoing a point made by William Easterly:

The experts are as prone to cognitive biases as the rest of us. Those at the top will be overly confident in their ability to predict the system-wide effects of paternalistic policy-making – and the combination of democratic politics and market economics is precisely the kind of complex and spontaneous order that does not lend itself to expert intuition.

Experts must guard against over-confidence. Just because you know more than the lay person does not mean you know it all, or even that you know enough. They must also be aware of groupthink and deformation professionelle.

So what do experts know that lay people don’t?

Connections. That’s what. Zeev Kril and David Leiser show that lay people are terrible at making connections and identifying causal links. People didn’t blame fiscal austerity for low returns on their savings for example; wrongly believe the effects of “fiscal prudence” are similar to an individual’s prudence; and wrongly blame immigrants for a weak jobs market.

It’s the job of experts, then, to show that social science is often not common sense: for example, behaviour that’s sensible for an individual might be bad for us collectively.

What I’m proposing here is a sort of (loose) division of labour. Experts know explanations and (sometimes) useful aggregate facts. But they often don’t know the future or ground truth. We should respect the division of labour. Whether we have the political and media institutions that do so is, however, another matter.

Comments

[pablopatito]

Was this the argument that Michael Gove was trying to make?

[Dennis Smith]

I'm slightly worried by your use of 'lay-people' here. This terminology originally referred (I think) to the line between ordained clergy and others. I can see the case for extending it to other groups, like medical doctors, who have legally recognised rights and responsibilities. But economists? I fear a touch of hubris.

What are the qualifications for being an 'expert'? In anything?

[ltr]

Caprice was of course correct on protections necessary against the spreading coronavirus and that should have been evident by looking fairly to and learning from the Chinese experience. The government decision was tragically wrong and made with no evident concern for actual expertise in the matter.

Boris Johnson showed no early interest in expertise, only with the politics of what were necessary protections.

[ltr]

"What do experts know? This question arises from the reposting the other day of an exchange between Caprice and Dr Sarah Jarvis, wherein Caprice argued for an early lockdown and mask-wearing, only to be opposed by the doctor. In hindsight, it looks as if Caprice might have been more correct."

July 17, 2020

Coronavirus

UK

Cases   ( 293,239)
Deaths   ( 45,233)

Deaths per million   ( 666)

Notice the remarkable deaths to confirmed coronavirus cases ratio of 15.4%

[ltr]

"Economists, for example, do not know how to forecast recessions. We should admit this fact."

Economists such as Dean Baker and Paul Krugman knew how to forecast the Great Recession, with Krugman in August 2006 writing precisely of a recession in December 2007:

http://krugman.blogs.nytimes.com/2006/08/25/the-bubble-bursts/

[ltr]

The doctor told Caprice: “Unless you have read every…statistical modelling paper that’s come out you cannot argue with me.”

[ What astounding rubbish, when by the middle of March there could be no question of the danger of the spread of the coronavirus and what would be necessary to limit the spread.

This is appalling and inexcusable since actual experience made the difference and not any modelling paper.

The expert of course was Caprice; the doctor was only pretending as in examining a model of a model patient. Actual examples were all there. ]

[Bill Bedford]

We know just about as much about the SARS-CoV-2 virus as any other that causes upper respiratory tract illnesses. This year we took responsibility away from the true experts, who have been dealing with similar diseases every winter for as long as anyone can remember, and gave it to pseudo-experts, politicians and their academic hangers-on, who didn't have a clue.

[ltr]

I am reminded that when politics was what mattered, Tony Blair effectively took control of the BBC to silence experts who might have turned opinion against the invasion of Iraq. At least for me, the BBC has always been "suspect" ever since.

[ltr]

Bill Bedford:

This year we took responsibility away from the true experts, who have been dealing with similar diseases every winter for as long as anyone can remember...

[ Really important. ]

[D]

@ltr

last line of Krugman at your link.

"This is not a prediction but it's well within the range of possibilities"

Which is consistent with Chris's point about economists ability to predict recessions. Krugman would say the same.

[Lee]

Was Marx's Manifesto a power top down or a bottom up sort of a document?

[Will Ross]

Experts get triggered just like the rest of us.

I'm sure Dr Jarvis regretted her outburst the moment the words came out of her lips.

[ltr]

D:

"This is not a prediction but it's well within the range of possibilities"

Which is consistent with Chris's point about economists ability to predict recessions. Krugman would say the same.

[ Fair enough, but Krugman was expressly warning about the real estate bubble hissing and bursting from August 2005 on, while earlier Krugman was warning of the inflating bubble:

http://www.nytimes.com/2005/08/08/opinion/that-hissing-sound.html

August 8, 2005

That Hissing Sound
By PAUL KRUGMAN ]

[ltr]

July 17, 2020

Coronavirus

UK

Cases   ( 293,239)
Deaths   ( 45,233)

Deaths per million   ( 666)

Germany

Cases   ( 202,345)
Deaths   ( 9,160)

Deaths per million   ( 109)

Notice the remarkable deaths to confirmed coronavirus cases ratio of 15.4% for the UK, as compared to 4.5% for Germany.

I would suggest that paying attention to experts, actual experts, makes a difference.

[Dipper]

Stop it. Stop it stop it stop it.

Watching non-scientists discussing Covid is like me going 'I pay off my credit card bill each month so I think I've got a good grasp of Economics' or going 'hon he hon he hon see I can speak French'.

Science is about dealing with the unknown, and we don't tackle the unknown by guessing, pontificating what seems reasonable, or conducting an opinion poll. Caprice may have been bang on, or she may have been completely wrong. We don't know. And that lack of certainty doesn't mean your prior assumptions are all correct.

[ltr]

Caprice may have been bang on, or she may have been completely wrong. We don't know....

[ Of course we know, of course Caprice was correct, of course the failure of the government to respond in the manner of Germany was a tragic mistake.

We do know and we knew Caprice was right in the middle of March. Boris Johnson we are told however was skipping meetings of experts and may not have known but Johnson is Prime Minister and ought to have been responsible. ]

[ltr]

https://www.cnn.com/2020/04/19/uk/johnson-coronavirus-response-criticism-intl-gbr/index.html

April 19, 2020

Johnson missed 5 key coronavirus meetings, but UK government defends his leadership
By Laura Smith-Spark and Arnaud Siad

London - British Prime Minister Boris Johnson missed five emergency meetings in the early stages of the coronavirus pandemic, officials admitted on Sunday, as the UK government faced a barrage of criticism over its response to the spread of the disease.

Government ministers were forced on the defensive after a wide-ranging critique in the Sunday Times of London revealed that the UK missed a string of missed opportunities to get on the front foot in late January and throughout February....

[ Caprice knew but Boris Johnson knew nothing.

We could make Caprice PM... ]

[Dipper]

@ tlr

no. really nobody knows anything. Michael Levitt seems to have called this best of anyone, arguing that all the evidence we needed was on the Diamond Princess.He is not pro Lockdown

It is completely appropriate for Johnson not to have been in those meetings. Proper leadership is telling the group that they are the experts, he will implement whatever they suggest, and walking out of the room.

[D]

@ltr

Sure... but he still can't predict recessions and he himself would agree with Chris that economists can't predict recessions.

It's one of the few things most economists agree on.

See also: conditional forecast v prediction; and, economists have predicted nine of the last five recessions.

[D]

@dipper

tripling down on this I see

[Dipper]

@D 'tripling down ...' Of course. When you're right, you're right.

[ltr]

July 19, 2020

Coronavirus

UK

Cases   ( 294,792)
Deaths   ( 45,300)

Notice the remarkable ratio of deaths to coronavirus cases of 15.4%.

Me, I am so grateful to Boris Johnson and fellow travelers for protecting ordinary folks of the United Kingdom against, like, knowing stuff that would save well-being and lives.

[ltr]

July 19, 2020

Coronavirus

UK

Cases ( 294,792)
Deaths ( 45,300)

Notice the remarkable ratio of deaths to coronavirus cases of 15.4%.

Got to admit how making sure to not know stuff was the making of Boris Johnson even at the expense of tens of thousands. Tory democracy is my favorite.

[ Sorry... ]

[ltr]

July 19, 2020

Coronavirus

US

Cases   ( 3,854,368)
Deaths   ( 143,012)

[ Got Republicans, so no experts wanted here either. ]

[ltr]

Dipper:

It is completely appropriate for Johnson not to have been in those meetings.

[ I was just remembering singing “the cheese stands alone” in camp. ]

[ltr]

https://twitter.com/camillalong/status/1284770178685952000

Camilla Long @camillalong

There is zero clear evidence on the effectiveness of masks. The government has said we don't need to wear them. Now we're told we must. And so the shops fall silent, our high streets die. All this is devastating for human relations. Column on mask Nazism

https://thetimes.co.uk/article/lighten-up-facemask-nazis-i-was-having-my-nails-done-not-filing-my-way-out-of-jail-sjsqgmzjs

4:40 AM · Jul 19, 2020

[ltr]

Missing the meetings along with Boris Johnson was evidently all the rage:

https://twitter.com/camillalong/status/1284770178685952000

Camilla Long @camillalong

There is zero clear evidence on the effectiveness of masks. The government has said we don't need to wear them. Now we're told we must. And so the shops fall silent, our high streets die. All this is devastating for human relations. Column on mask Nazism

https://thetimes.co.uk/article/lighten-up-facemask-nazis-i-was-having-my-nails-done-not-filing-my-way-out-of-jail-sjsqgmzjs

4:40 AM · Jul 19, 2020

[Postkey]

"Economists, for example, do not know how to forecast recessions. We should admit this fact."

Some did?

“The widely believed propo­si­tion that this finan­cial cri­sis was “a tsunami that no-one saw com­ing”, and that could not have been pre­dicted, has been given the lie to by an excel­lent sur­vey of eco­nomic mod­els by Dirk Beze­mer, a Pro­fes­sor of Eco­nom­ics at the Uni­ver­sity of Gronin­gen in the Nether­lands.
Beze­mer did an exten­sive sur­vey of research by econ­o­mists or finan­cial mar­ket com­men­ta­tors, look­ing for papers that met four cri­te­ria:
“Only ana­lysts were included who:
1. pro­vide some account on how they arrived at their con­clu­sions.
2. went beyond pre­dict­ing a real estate cri­sis, also mak­ing the link to real-sec­tor reces­sion­ary impli­ca­tions, includ­ing an ana­lyt­i­cal account of those links.
3. the actual pre­dic­tion must have been made by the ana­lyst and avail­able in the pub­lic domain, rather than being asserted by oth­ers.
4. the pre­dic­tion had to have some tim­ing attached to it.”
On that basis, Beze­mer found eleven researchers who qual­i­fied:”
http://www.debtdeflation.com/blogs/2009/07/15/no-one-saw-this-coming-balderdash/

[Postkey]

Usually the " 'expert' economists" ‘believe’ that the solution to the current economic problem is the implementation of the ‘correct’ type of demand side policies?
Increase M0 or M3, cut r, or make it negative. Increase G and finance it by ‘borrowing’ from the central bank or by borrowing from the private sector. Or ensure that private credit is extended only for GDP transactions.
All that is lacking is a ‘sufficient’ increase in aggregate demand!
They fail to acknowledge that the current problems stem from the 'supply side' of the economy and the rise in the ECoE (the Energy Cost of Energy)?
'The first principle is that all forms of economic output – literally all of the goods and services which comprise the ‘real’ economy – are products of energy.
Nothing of any economic value or utility can be supplied without using energy. . . .

If you want a succinct answer to this question, it is that ECoE (the Energy Cost of Energy) is rising, relentlessly and exponentially. The exponential rate of increase in ECoE means that this cannot be cancelled out by linear increases in the aggregate amount of total or gross (pre-ECoE) energy that we can access. The resultant squeeze on surplus energy has been compounded by increasing numbers of people seeking to share the prosperity that this surplus provides.
As a result, prior growth in prosperity per person has gone into reverse. People have been getting poorer in most Western advanced economies (AEs) since the early 2000s. With the same fate now starting to overtake emerging market (EM) countries too, global prosperity has turned down. One way of describing this process is “de-growth”. '
https://surplusenergyeconomics.wordpress.com/

[The truth]

Good points but idiotic onclusions as usual Chris.

Anyone who thinks lockdown was a good idea should look at Sweden. Same outcome in terms of deaths as the UK but far less economic and social cost.

Unless we get a vaccine for this thing we are headed to the same place. It is just a question of how long it takes to get there. As bad as it sounds if a few (and it turns out that it is a very small proprtion) old people must die so that life can return to normal then lets do it

[The truth]

@postkey one look at the price of oil over time or electricity shows that what you say is wrong and that you are a crank.