Monday, January 31, 2011

The Adams gambit, or, seeing the forest for the trees

Scott Adams (mr dilbert) had a nice article in the WSJ a few days ago.
Loosely, the question is this: The government wants more of the rich people's $$$ than it's been able to wrest from them, so what sorts of deals could persuade them to give it up voluntarily? Actually though, the biggest thing I got from the article was this meta comment:
I spent some time working in the television industry, and I learned a technique that writers use. It's called "the bad version." When you feel that a plot solution exists, but you can't yet imagine it, you describe instead a bad version that has no purpose other than stimulating the other writers to imagine a better version.

...With that technique in mind, I will describe some bad versions of how society might go about the job of convincing the rich to accept higher taxes on themselves.
Adams has some ideas he would like to share with the general public. He thinks his ideas move us closer to the solution than we started, and therefore that they are worth sharing. But he also knows that many people, by default, expect too much. And this is his way of nipping that expectation in the bud. Not everyone has a detailed map of the whole forest, so we should be grateful when we're at least pointed to a few of its trees, right?

[Just a reminder: Some help is better than no help, and if you expect too much of me, I'll just decline to deal with you at all. The logic underlying this point is the bread and butter of econ 101, which means that it's (a) clear to economists, and (b) not so clear to the average person who isn't intimately acquainted with economics...or else they wouldn't have to teach it, right? In communication, economists face a meta-version of the same logic: our simple models teach us something, but many people will not take them seriously because they expect more than something. The challenge is getting the noneconomonomists to swallow what we're saying with the minimal amount of dry philosophic justificatory this-is-why-it-actually-makes-sense-to-consider-this-simple-scenario-that-seems-so-ridiculous-to-you....]

In this piece, Adams is really saying, "Psst! Maybe we should look for a solution in this class of policies over here?" He identifies the class of policies by picking some suggestive examples from it; that's the exact purpose of the examples. This is obvious to people who are trained in this sort of thing...but Adams is evidently aware that by default, many people would judge his article by the strength of the actual examples he cites, rather than by their success in identifying a larger class of potential solutions. And the genius of his gambit is how effectively it blows the wrong interpretation out of the water before it even leaves the harbor. [effective=quick, painless, and just generally the complete opposite of boring]

I cannot stress how nontrivial this is, as an accomplishment of communication. My sister frequently asks me why economists are so bad at communicating with noneconomists. The answer I've come to is that by default there is an enormous gulf between our thinking, and it is just not easy to bridge it. Because why should it be? It should take some real care to communicate well, across very different modes of thought. I should still be learning new and better ways of getting my points across. And today I did. This "bad version" trick suggests to me several previously unimagined ways of diffusing the bomb waiting on the other end of many things I write. So, it and its friends are going in my toolbox.

Anyway, maybe I should say something about the actual content of the article? Here's a nice bit:
It's useful to keep in mind how the rich are different. When you are poor, you are willing to trade your time to earn money. When you are rich, you trade your money to get more time...Suppose we change the tax code so that in return for higher taxes on the rich, we figure out a way to give the rich some form of extra time. The bad version is that anyone who pays taxes at a rate above some set amount gets to use the car pool lane without a passenger. Or perhaps the rich are allowed to park in handicapped-only spaces.
Whether you think this particular proposal is good or not, it certainly highlights the fact that because the government is so inefficient, it is sitting on many such unrealized gains to trade, so there are many possible efficiency-enhancing deals it could make with people it wants to cooperate. So actually the forest is quite big, and full of free lunches. That's the true underlying feature of reality brought out by this piece. Perhaps it's sad that to so many people, the individual pieces of reality appear so unrealistic, but crying about it isn't a solution, and ignoring it isn't much better. By contrast, I think something like the Adams gambit would be a really nice fit for a lot of situations.


Freakonomics, Freedomnomics, Soccernomics, Spousonomics, now I'm sure we can all agree that blankonomics has become a cliche. It is clearly time to reclaim the nomics. It's time to put the econo back in economics.

Yes, I realize that this site will suffer from the fact that nobody, including me, can figure out how to actually type economonomics. But a quick google search confirms that econonomics is simply a depressingly common typo. Also economics.blogspot was already taken. So we won't be able to economonomize on our syllables, sorry.

Anyway, welcome to Economonomics.