THIS WORLD-CLASS DUST-UP IN ECONOMICS IS A CLASSIC ‘ABUNDANCE VERSUS SCARCITY’ CASE STUDY. NOT TO MENTION A SOBERING WINDOW ON BRAIN BIAS

Ask admirers of the dolphin strategy what they like about it best, and a lot of folks will say its views on abundance versus scarcity.

About how—or so many of these readers will describe it—this view of things characterizes dolphinthinkers as always championing abundance and sharkthinkers (carpthinkers, too) as always promoting scarcity.

I’d agree that this is a tidy, appealing way of thinking about how people and their institutions believe and behave. But it’s not what we have argued in books like Strategy of the Dolphin and LEAP! How to Think Like a Dolphin & Do the Next Right, Smart Thing Come Hell or High Water.

Or at least it is only partially what we have argued.

Carp-thinking and shark-thinking do seem inordinately plagued by expectations of absolute scarcity. On the other hand, dolphinthinkers aren’t nearly so hamstrung by sugar-plum visions of absolute abundance.

That’s because the dolphinthinker knows scarcity is real. It can happen, and often there’s nothing that can be done about it. The dolphinthinker’s argument for the possibility of abundance relates to all those other times. When something might very well be done about it only we could get our beliefs and expectations more in sync with reality.

And that brings us to the world-class dustup that has occurred this month in the economics profession.

If you follow the news about money at all, you have to have noticed the major controversy that has been going on among world politicians and world financial players and researchers since the 2008 global recession. In country after country, including the United States, economies have needed jump-starting. The question was how? Is it best for a country to go further in debt to prime the money pumps now? Or is it best to hunker down, tighten belts and accept the pain so abundance can return later?

I’m not seeking to act like an historian or even a journalist here. (If you want the details on this debate, google or bing “Keynesians versus Austerians” and start reading.) I just think that this is too good an example of the difficulties of thinking abundantly to let it go by without comment.

To now, the scarcity thinkers have totally dominated the decision-making. In America, it has produced the sequester, Government funding of just about everything (except perquisites for members of Congress) has been cut or underfunded in view of needs (like for highways, schools or first-responder services and job creation in general). In Greece, children are going hungry. Even the “strong” European economics are fearing another recession.

The evidence is huge and growing that the “austerians” . . . the scarcity-thinkers . . . the sharks . . . got it wrong. The good things they predicted haven’t materialized. The bad things they feared haven’t happened. And now the bombshell piece of academic research that the scarcity advocates repeatedly fell back on to reinforce their views and claims has, in the words of Nobel Prize-winning economist Paul Krugman, “turned out to be riddled with errors, omissions and dubious statistics.” (Go here for Krugman’s take on this.)

The question we have to ask as dolphinthinkers is why our brain proves to be so susceptible to expectations and predictions of scarcity.

The answer almost certainly is inextricably involved with brain biases. Any number of them can be cited as major players in this. But probably none is as influential as confirmation bias. This results from all the non-conscious processes that our brain jumps in with to reinforce our beliefs when they are threatened, even if it has to distort reality.

To keep from having to believe something different, our brain will do a lot of things. It will look only for evidence that supports what we want to continue to think. If evidence is mixed, we tend to remember only the part that supports what we believe. Even evidence that is unequivocally against our view can get relabeled and reinterpreted in our head as time passes.

As a warning of what confirmation bias might distort, neuroscientist Robert Burton has called on researchers in his own field to provide brief autobiographies revealing their personal backgrounds and beliefs at the beginning of all research articles. He would limit this self-revelatory step only to neuroscience, since it must use the mind to study the mind. But I think he’s wrong there. I think it would be a wise thing for all scientists, whatever their field, to do this.

And especially the economists who have been so vocal in support of scarcity beliefs on how governments are best funded in times of severe economic downturn. It might not change the larger picture much. But surely it would help us understand why they have such difficulties changing their minds even when their facts, arguments and predictions have proven to be so badly—and baldly—wrong.

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