The Wisdom of Socrates

Tyler Cowen linked the other day to a study which showed that countries whose leaders have formal training in economics don't perform better economically than countries whose leaders lack such training.

There are obviously all kinds of reasons why this might be the case, but it's a reminder that, to me, the very most important attribute in a policymaker isn't to have a ton of knowledge about the issues but, rather, to understand the limits of his knowledge. If I were asked to make an important decision about a subject where I knew I didn't know what I was talking about, I would try to survey some informed people, pick out the areas of broad consensus, and try to make a decision based on the idea that the consensus points are true and the others are uncertain. This is a good, if imperfect, heuristic. By contrast, if you're asked to make decisions about some subject where you have a lot of information, you're going to be inclined to push your pet ideas, and your pet ideas are probably wrong.

This is what's so dangerous about things like Bush's notions about Iran. It's be one thing for the president to be ignorant about Iran, the Persian Gulf more generally, energy markets, etc., if he realized he was ignorant. Instead, though, he seems to have convinced himself that his ignorance is some kind of virtue, exhibiting a deeper level of strategic understanding.

Comments

I wonder if the paper deals with the endogeneoity issue? In countries with humming economies, the electorate may place less of a premium on the economic skills of candidates, while in a country with a floundering economy, being able to boast of economic training may be a valuable campaign tool.

I have no idea if there is an effect or if it's large, but I could imagine it might bias downward the estimate towards zero. Just imagine the reverse question "Do countries with crappy economies elect economists?" Unless that endogeneity is dealt with, I'd be a bit skeptical of their results (no matter what they were).

In my limited experience with empirical political scientists, they seem less concerned with endogeneity problems than economists typically are. On the other hand, if this issue was corrected, maybe we economists are less valuable than we think we are. Then again, wasn't there a paper about managed bonds, where economists are paid big bucks to predict the direction of change in the interest rate, which showed that these big-buck economists performed statistically worse than a coin flip?

Posted by TheF79 | September 6, 2007 2:37 PM

Second paragraph is a great explanation of why the North won the Civil War.

Posted by Gene O'Grady | September 6, 2007 2:53 PM

It's be one thing for the president to be ignorant about Iran, the Persian Gulf more generally, energy markets, etc., if he realized he was ignorant. Instead, though, he seems to have convinced himself that his ignorance is some kind of virtue, exhibiting a deeper level of strategic understanding.

This is why Guiliani is so terrifying. He thinks he knows everything about anything in the Middle East because he was in New York on 9/11, and once kicked Yasir Arafat out of Lincoln Center.

He literally knows nothing more than that, yet its almost guaranteed that he would approach foreign policy with even more arrogance and less knowledge than George W. Bush, if such a thing is possible.

Posted by Ben | September 6, 2007 2:59 PM

This, by the way, is one key difference between Bush and his hero Truman: it's not difficult to find in oral histories examples of Truman admitting to total ignorance of an issue on day one, and then later exhibiting total mastery of the same subject. For Truman, ignorance was the starting point to knowledge; for Bush, it's the end of the journey.

Posted by WatchfulBabbler | September 6, 2007 3:06 PM

I recently read one of the newer Easy Rawlin's pi books by Walter Mosely (Cinnamon Kiss) where he describes this really well, paraphrasing since I don't have the book handy:

Easy and another PI go to San Francisco to meet some big shot PI who is gonna hire them to work on a case for him. After the meeting Easy's description of the guy is, he's real smart, but not as smart as he thinks he is which makes him real dangerous.

Posted by Eric K | September 6, 2007 3:44 PM

If I were asked to make an important decision about a subject where I knew I didn't know what I was talking about, I would try to survey some informed people, pick out the areas of broad consensus, and try to make a decision based on the idea that the consensus points are true and the others are uncertain. This is a good, if imperfect, heuristic.

I agree with this, but consensus can also be wrong (due to groupthink, etc.) and lead to bad decisions like the Iraq war. The best leaders follow your heuristic generally but are also able to identify when the consensus is wrong.

Posted by Led | September 6, 2007 3:47 PM

Led has a good point,

What makes for a great leader is someone who is basically smart and has good judgement but knows his limitations. He gets the advice of all the experts and then is able to judge for himself which is the best course, he doesn't simply poll for consensus or pick the plan the majoirty of the experts supports.

Posted by Eric K | September 6, 2007 3:58 PM

Led is right, the "consensus" is often wrong as are the experts. However, in my view, Bush is essentially right about people wanting "freedom" or democracy even though he doesn't describe it very well. The new book about him says after he retires, he wants to start something like a Freedom center where visitors from foreign nations can come and learn about democratic institutions.

Now call me a naive Chickenhawk, but what caused 9/11 was essentially a lack of democracy in the ME, specifically our "allies" Saudi Arabia and Pakistan. Bush saw this and decided the place to start - after Afghanistan wouldn't turn over bin Laden - was Iraq, the keystone state whose dictatorship had tons and tons of UN resolutions against it. I see this as forward looking. I really really doubt they'll bomb Iran. I'd wager money on it.

Posted by Peter K. | September 6, 2007 3:59 PM

Yer a naive chickenhawk.

Posted by Willie | September 6, 2007 4:03 PM

Shorter Socrates: trust the experts?

Posted by blah | September 6, 2007 4:13 PM

This post immediately reminded me of a corollary Bushian tendency--though it was buried in the Condoleezza Rice profile in teh NY Times a couple days ago: Her friends commented on her tendency to commit totally and doggedly to her P.O.V., whatever it may be, regardless of data and feedback--then, when things don't pan out, just kind of move on....

Posted by elle loco | September 6, 2007 4:14 PM

However, in my view, Bush is essentially right about people wanting "freedom" or democracy even though he doesn't describe it very well.

If we've learned nothing else from the war, we should at least gather that although people like democracy, people like security even more.

Posted by Steve | September 6, 2007 4:17 PM

when things don't pan out, just kind of move on

This isn't necessarily a bad thing, as long as you know when to cut your losses. That's what's lacking here.

Bush and Rice are like the character of Death portrayed in "Bill & Ted's Bogus Journey," where, after losing a game for B&T's lives, says, "okay, how about 2 out of 3?" Losing again, demands 3 out of 5, and so on.

Posted by Tyro | September 6, 2007 4:21 PM

Willie @ September 6, 2007 4:03 PM

"Yer a naive chickenhawk."

I take it you want to wager on Iran. If not YOU'RE the chicken.

Posted by Peter K. | September 6, 2007 4:40 PM

I think the obvious, and probably correct conclusion from this data, is that economists are wrong about most matters. It is a very incompetent profession that is based on dogmatic adherence to creeds such as free trade, economic growth is always good, and population growth is always good, instead of actually looking at data. Therefore, one who is ignorant about conventional economic dogma is likely to be as good or better as a leader than one who adheres to these dogmas without looking at the data.

Posted by Hugh | September 6, 2007 4:45 PM

Kind of like this?

Read my blog! It's the best in the world!

Posted by Moral Panicker | September 6, 2007 5:06 PM

I agree with this, but consensus can also be wrong (due to groupthink, etc.) and lead to bad decisions like the Iraq war. The best leaders follow your heuristic generally but are also able to identify when the consensus is wrong.

One way to avoid groupthink is to make sure that the experts you are polling don't all come from the same ideological background. A lot of what's gone wrong with the Bush administration is that most of the smart people in it subscribed to neoconservative doctrines. Naturally, when given the same set of parameters, they reached the same conclusions. Their logic wasn't flawed in the context of their ideological assumptions; the ideological assumptions, however, were.

If Bush hadn't of choosen his circle of experts on the basis of ideological purity, he might have been given a much more realistic assessment of the consequences of his planning.

Posted by Andrew Lias | September 6, 2007 5:15 PM

The consensus at the State Department (and, depending on the source, the CIA) was that the Iraq War was going to turn out badly. However, you don't become famous enough to appear on Tim Russert by working for State as you do for Brookings and it was the starfuckers at think tanks that tended to have their own pro-war consensus.

The plan for Iraq wasn't really to have a democracy. What plan we did have basically had Chalabi installed as a liberal dictator and call it a democracy like the Shah of Iran or Marcos. We only held elections because al-Sistani pressured us and threatened to undermine the American provisional state in Iraq.

"In countries with humming economies, the electorate may place less of a premium on the economic skills of candidates, while in a country with a floundering economy, being able to boast of economic training may be a valuable campaign tool."

I can see this being true. I would be interested in seeing the data. After all, rich nations have elected people like Bush and Chirac, not exactly economic whiz kids, as of late while countries like Liberia have elected IMF economists.

Posted by Reality Man | September 6, 2007 6:46 PM

>>if he realized he was ignorant. Instead, though, he seems to have convinced himself that his ignorance is some kind of virtue, exhibiting a deeper level of strategic understanding.

I think you are describing the Dunning-Kruger effect more than anything to do with Socrates.

Posted by jim | September 6, 2007 7:11 PM

It's always worth pointing out that lurking behind Bush's proud ignorance is the religious faith that encourages––requires, in fact––the belief that hard evidence, thought, analysis, science, and skepticism are dangerous things that lead to hell, Satan, temptation, loss of faith, etc. Even the proudly intellectual Andrew Sullivan routinely ends up citing the utter absence of evidence for God as proof that there is indeed a magic man "out there" with whom he has an intense, real relationship. And there is literally nothing that could occur that would dissuade him of this. The other upside of this nonsensical thinking is the ego stroke: I'm so strong and faithful, I don't need ANY evidence to support my belief in my Lord. You atheists and scientists are weak!

When we elect people who have come across a way of thinking that justifies and encourages their already-overwhelming stupidity, we can expect things like illegal wars, botched occupations, non-responses to natural disasters (God's will!), and all the other insanity that Bush has made wrought. Belief is everything, facts are for pussies. And to admit a mistake (or defeat) is akin to losing your religion.

Posted by tinisoli | September 6, 2007 7:33 PM

There are, of course, other possible conclusions that one could come to without bothering to read the paper:

Perhaps it's not that economists know so much more about economics- yet fail to implement it. Perhaps it's that they can't implement it due to domestic politics. Perhaps, governmental policies are overrated in general.

Posted by Preston | September 6, 2007 10:09 PM

The study could be repeated in other fields. For example, some nations are led by ex-academics - Gordon Brown, for example, used to be a university lecturer. Do these nations have better levels of education? Do nations led by medical doctors (none spring to mind right now) see improvements in health?

Posted by ajay | September 7, 2007 5:13 AM

"For example, some nations are led by ex-academics - Gordon Brown, for example, used to be a university lecturer. Do these nations have better levels of education? Do nations led by medical doctors (none spring to mind right now) see improvements in health?"

Mao used to be a high school teacher, but somehow I doubt that Maoist China had good high schools. Considering how much of the data for the past 50+ years have included communist states, it brings up the question whether since these states failed largely due to communism, should they then be included in the data?

Posted by Reality Man | September 7, 2007 8:47 AM

I would have labeled this post 'The Isiah Thomas Effect' in a nod to the basketblogging that is due to be returning soon.

Posted by crack | September 7, 2007 9:10 AM