Recently, Tucker Carlson made the all-too-common mistake of suggesting that evolution by choice is an unproven theory, because evolution is merely a “theory.” As he put it on Joe Rogan’s podcast, “Darwin’s theory has no evidence at all — that’s why it’s still a theory, almost two hundred years later.”
This is a fundamental misunderstanding of what “theory” means in the scientific sense. In the minds of people who make this mistake, theories are unproven ideas that must be proven by gathering facts and evidence. But that is a mistake. Theories are explanatory frameworks that tell us what the facts mean. To put it another way, facts do not prove or disprove ideas. Theories are what explain facts – and allow us to predict future facts and evidence that we should expect to see consistent with that theory. To say that evolution is still a theory after two hundred years means that evolution has remained a successful framework in its explanatory and predictive power over the facts and evidence of the past two hundred years. This is not the damaging criticism that Carlson seems to think it is. It would be just off-base to suggest that the germ theory of disease it is an unproven theory, because it remains a “theory” despite having been proposed since the 1500s.
Just as the facts of biology require a theory to be made understandable, so do the facts of economics. As with evolution, it is not uncommon to find analysts dismissing the importance of economic theory just because the idea – while engaging in an almost sophisticated practice of simply telling the truth. Paul Krugman gave a wonderful explanation of how this works to discuss Book by William Greider One World, Fair or Not: The Manic Logic of Global Capitalism:
I think I know what Greider would say: that while I’m talking theory, his argument is based on evidence. The truth, however, is that the US economy has added 45 million jobs over the past 25 years – far more jobs have been added in the service sector than lost in manufacturing. Greider’s view, as I understand it, is that this is just liberating–that any day now, the whole economy is going to start looking like a steel industry. But this is only a theoretical prediction. And Greider’s teaching is speculative and very simplistic because he is an accidental theorist, a theorist in spite of himself – because he and his unwary students think that his conclusions just flow from the facts, not knowing that they are driven by clear thoughts that cannot survive. the light of day.
Admittedly, I have little hope that the general public, or even most intellectuals, will see what Greider’s stupid book has written.
Some of the statements we make are wrong, some are logically wrong. It may sound like the former is a big mistake, but the latter is what really clouds our understanding. This is because, to repeat, we need a theory to tell us what the facts mean. A mountain of good facts interpreted with bad theory will leave one very confused about how the world works.
For example, Congresswoman Alexandria Ocasio-Cortez once made the following comment about the low unemployment rate:
I think the numbers you just talked about are part of the problem, right? Because we look at these statistics and say, “Oh, unemployment is low, everything is going well, right?” Well, unemployment is low because everyone has two jobs.
Many people responded to this by pointing out that he was wrong in his assertion that “everyone has two jobs.” At the time he made that statement, the percentage of workers holding more than one job was at an all-time low. He said the unemployment rate was reduced because the number of people working multiple jobs was increasing – but that was not true, because the number of people working multiple jobs was not increasing as the unemployment rate was falling.
But his statement that he was factually incorrect, in my mind, was so small that the fact that his statement was not even true in theory it was fine. The unemployment rate is reduced by people working multiple jobs. If anything, people working multiple jobs can have the effect of keeping the unemployment rate higher than it would otherwise be, not lower. To see how, consider this very simplified example.
Imagine a city with ten working people. Being in a position means having a job, or not having a job, but actively looking for one. Suppose eight out of ten people are employed, and two people are unemployed and looking for work. In this case, the unemployment rate is 20%. Now, suppose a new night watchman job is created as an industry, and two people apply for that job. One of the applicants is unemployed, the other applicant is working but looking to take up a second job. If an unemployed applicant gets a job, the unemployment rate can drop from 20% to 10%. But if an already employed applicant is hired and starts a second job, the unemployment rate will stay at 20% instead of going down. (Also, notice that I chose my words carefully. It’s not just about multitasking suggests unemployment rate – the rate here is unchanged at 20%. The idea is that working multiple jobs keeps the unemployment rate “higher than it would otherwise be,” and would not drive the rate. down.)
The main problem with Congress’s claim is not that it got the facts wrong. The big problem is that even he it was accurate in the facts, he would not understand what those facts mean about the unemployment rate. This is why it is so important to have a good understanding of economic theory – because substituting wrong facts for right ones will do no good unless one has the right theoretical framework to understand those facts.
For example, if I were challenged to explain why I thought the economy was doing poorly despite the low unemployment rate, here is an answer I would give that is at least theoretically correct:
Yes, the unemployment rate is low. But that is because many people have given up hope that they will ever get a job. As legislatures continue to pass laws that make workers more expensive and more expensive to hire, more and more low-skilled and vulnerable workers are being priced out of the labor market. Eventually, they stop finding work, and when they do, they are no longer employed, and they are no longer counted as unemployed. So even though the unemployment rate is low, it’s not the good sign it might seem.
This explanation could be really wrong – to solve that, we would have to look at the labor force participation rate data to see if people have been dropping out of work. But this explanation is at least theoretically correct, which means that finding a factual claim wrong can lead to an improved understanding of the situation.
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