William Watson: Can journalists be taught economics? We'll find out
I'm off this weekend to the first of three Fraser Institute economics workshops for journalists. We're now up to three programs a year, each two-and-a-half days long, each for 25 journalists, with two of the sessions in Toronto and one in Vancouver.
Together with a couple of colleagues from the United States who are terrific teachers of economics—I wish I'd seen them in action before I started my own teaching career 40 years ago—we try to give the assembled scribes, editors, producers, talkers and tweeters (journalism comes in so many forms these days!) some insight into how we economists see the world. Ordinary folk—and I guess journalists qualify as that, though ordinary folk might disagree—probably think our view of reality is slightly deranged. But after so long in the business, the economic outlook is second nature to me.
What lessons do we try to teach them? Here are some.
• That everything costs something, of course, and that "There's no such thing as a free lunch," as the famous saying goes. We start off with a very pleasant "free" dinner. But they all understand it's not really free—they have to stay for the rest of the program.
• That in general you get better results when people do take the costs of their actions into account. That's a constant problem in Canadian federalism. There are lots of things local governments will buy when the two senior levels of government are paying. When items are two-thirds off, only ascetics don't buy more than they really need.
• That everything's connected. Or almost everything. Maybe not green cheese and Alpha Centauri, but pretty much everything on Planet Earth. You make a policy intervention over here and it may well have effects over there that you hadn't anticipated. Economics is actually very ecological in that respect. "General equilibrium" systems are very hard to control.
• That a public program's stated purpose isn't always its effect. Sometimes that's intentional—its proponents are trying to scam you. But sometimes it's by accident; even the most well-intentioned people forget about the ecological bit, or that those affected by a policy or change may consciously take action to undo or offset it.
• And the related "Cui bono?" To the journalist's standard five Ws—who, what, when, where, why—should probably be added "CB?" It's a question that may sometimes seem cynical, as if we're presumptively accusing people of lying to further their own interests. To my mind, it's more skeptical than cynical—people may really believe in the things they propose, even if in the end they would bring the biggest benefits to themselves. (University professors recommending more aid to higher education, for instance. Some of my best friends are university professors. Few I know who very sincerely argue for more money for higher education are thinking of their own interest, but they'd clearly be well-served by the policy they recommend.)
• You can't always believe what you read in the newspapers. This is a harder sell to a group of journalists but it's a sell worth trying to make. For instance, what you read in the papers these days is that inequality is virtually a sin. But surely it's more complicated than that. Inequality can be the result of social processes each of which is intrinsically fair. In the end, newspaper people love a good scoop more than anything else so if they can be presented with an unconventional but persuasive argument, they'll often go for it.
• If people can make a profit doing something, they're more than likely to find a way to do it. That's both good and bad. Good because it produces the weird and wonderful ingenuity of the market. But it's bad, too, because some things people can profit from aren't very good for other people. That can be true either when the products or services they're selling contribute to their customers' self-destruction or when third parties are affected by transactions that are good for both parties who undertake them.
• Yes, markets can fail. They probably do so pretty often, compared to the ideal markets of the textbooks. But are we sure we're smart enough to correct those failures without doing even more harm? "First do no harm" is as good a rule for economic doctors as it is for real doctors.
There are other lessons, no doubt. I hope they'll come up this weekend.