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Brooks Wilson's Economics Blog: Competition and Bias

Wednesday, August 25, 2010

Competition and Bias

During the first week of my classes, I emphasize the importance of the scientific method in improving critical thinking and limiting biases.  Drawing upon the work of others, using math to express relationships, empirically testing hypotheses, and the peer review process of publishing scientific papers all work toward this end.  In the preface of their book, Saving Capitalism from the Capitalists, Raghuram Rajan and Luigi Zingales describe their methodology and the nature of bias in scientific progress.  The emphasis added is mine. 

This book is also more than simply a survey of a literature—it weaves a broad argument.  While we will marshal historical facts, and draw on our own studies, as well as the studies of others, history gives us few natural experiments with which to test all aspects of broad argument.  Therefore, at certain junctures, we will try and persuade the reader as much by logic as by the historical authorities and evidence we cite.

The purist may not approve of this approach.  Unfortunately, any attempt at integration of different fields, and evidence across time and studies, is usually unsatisfactory to purists, partly because the weights on places on different aspects are pregnant with biases.  We would apologize for these were it not for our firm believe that bias is inevitable in all work, and it is competition between biases that generally drives thought ahead.

Competition between biases must work toward advancing science and knowledge, but it also explains why progress in social science is often painfully slow. 

I suspect that biases are defined by what Thomas Sowell describes two widely held visions, “what we sense or feel before we have constructed any systematic reasoning that could be called a theory,” of how the world operates in Conflict of Visions.  Both visions are logical constructs and have endured for centuries.  They also lead us to interpret data differently leading those lead by one vision to talk past those lead by the other.  Critical thinking and competition of ideas may be imperfect tools, but they are the tools we have. 

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