So, I have this epistemological problem. I have a great deal of respect for Tim O'Reilly. He's created a successful publishing and conferencing company. That's an accomplishment not to be made light of. One of the things he does from his bully pulpit is look for insight into problems. Of course, he uses that insight to further target his conferences and books, but there's nothing (NOTHING) wrong with that.
The problem is that Tim O'Reilly advocates bad economics. You know, the Krugman and Stiglitz brand of economics. Economics needs to be free of a political slant, less it cease to be description and wander off into the weeds of prescription. Unfortunately, both Krugman and Stiglitz espouse political ideas in the guise of economic analysis, and Tim has bought into those ideas.
Okay, so anybody can be wrong, right? Yesbut, Tim is respected for his insight, and uses that respect to promote ideas. When you're in that kind of position, you need to be careful to only promote ideas that you are confident of. Of Economics, Tim knows little, but he thinks that because he has created a successful business, he knows something about economics. Thus the epistemological problem.
John Maynard Keynes was a successful investor. Because he became wealthy, he thought he knew something about economics. Because he became wealthy, other people thought he knew something about economics. Unfortunately, business and investment insight does not lead directly to an understanding of economics. Only a study of economics leads to an understanding of economics.
Like Keynes, O'Reilly knows very little good economics. I do understand economics (an assertion you can check for yourself by reading the archives of this blog). Yet O'Reilly natters on about economics. He also has much to say about other things, of which I know little. How am I to trust O'Reilly, now that I know he is willing to promulgate bad information? How do I know when Tim is speaking from his experience and his insight, instead of pulling stuff from his butt? If I can't trust him to be right in areas where I have expertise, how can I trust him to be right in areas where I have little knowledge?
Answer: I can't. The solution for him is to listen to his friends. When they tell him he is wrong, in areas where they have expertise, he should be more circumspect in his pronouncements. The trouble is that, like so many people, O'Reilly (and Keynes) thinks that because he is good at finance, he's good at economics. How to cure people of this idea?
I still have a lot of respect for Tim as a person. But as a seer? Much less. It hurts to say so, but I guess every hero has clay feet.
posted at: 05:58 | path: /economics | permanent link to this entry