September 26, 2006

More conceptual tools for understanding how the world works

Here are some reader suggestions for ideas that journalists (or anybody else) should keep in mind:

- Perhaps the most important one: When someone proposes an explanation or description of reality, you should try it out--see if its predictions make sense. Don't let the use of computers, math, technical jargon, or the reputation of the person proposing it keep you from asking "what if" and playing with the model a bit.

- "The plural of anecdote is not data"

- The logic of collective action--analyzing organizations based on the incentives and knowledge of the individual decisionmakers. (My favorite reference for this is Sowell's _Knowledge and Decisions_.)

- The difference between individuals and distributions, so that you don't get idiocies like "How can you say women are weaker than men? Andrea here is a lot stronger than Bob." [This is also known as the Overlap Means Equality fallacy: "A and B have some overlap, hence A and B are equal."]

- The way that unthinking processes can lead to apparently organized results, where no individual decisionmaker is trying to get the results to come out that way. This has implications from economics to evolution to politics to the dynamics of computer networks.

- The ways in which a poll can be skewed by the way the questions are asked, how the responder is primed for question X by question Y, etc. Similarly, the importance of specifying exactly what a result means--not just "53% of Americans are literate readers" but "and that means they read at least one book, short story, play, or poem in the last year".

- The iterated prisoner's dilemma and its implications for competition vs. cooperation.

- Revealed preference.

- Confirmation bias, and the related tendency to notice flaws in your enemies you don't see in your friends, and virtues in your friends you don't notice in your enemies.

- The importance of asking the question "how would you know if this idea was wrong?"

- The fallacy of composition -- [this is assuming that the whole is equal to the sum of the parts, like assuming that the U.S. Olympic basketball team is the best because it has the best players, although I can't find many examples of this that are particularly pernicious in the modern media climate]

- Agency costs

- Rational Ignorance

- Dispersed costs vs. concentrated benefits

- ad hoc hypothesis

- communal reinforcement

1- difference between a necessary and sufficient condition
2- demographic momentum
3- difference between national debt and budget deficit
4- difference between nominal and real economic variables
5- difference between birth rate and fertility rate.
5- ecological footprint
6- carrying capacity
7- fallacy of composition
8- fallacy of distribution
9- difference between short-term and long-term effects
10- demographic investment
11- difference between per capita economic growth and total economic growth
12- difference mark-up and profit margin
13 - purchasing power
14- the notion that every price has a payer and a receiver
15 -difference between nation and state
16- difference between citizenship and nationality
17 - dependency burden
18 - difference between tax rates and total taxes
19- difference between value added and gross sales
20 - difference between Bush and a statesman

My published articles are archived at -- Steve Sailer

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