Logical Fallacies: 4. Cum hoc ergo propter hoc

 

The latest in Madsen Pirie’s ongoing series on logical fallacies, in this video he explains ‘cum hoc ergo propter hoc’.

You can pre-order the new edition of Dr. Madsen Pirie’s How to Win Every Argument here

The best laid plans of mice and men gang aft agley

There’s an interesting reason why politics, the creation of laws and regulations, just isn’t very good as a way of doing things. That being that the world’s a complicated place. And so it is with this idea that every child should be safe from the terrors of pornography on the internet. The powers that be demanded that all such possible access be filtered out unless responsible adults deliberately asked for access to be possible.

And lo! the regulations were made and:

“But it’s very simplistic: URLs with Sussex or Essex in them, for example, are blocked.”

Rather less amusingly the websites of many charities and educational sites are also blocked. If all “porn” is blocked then so will be places that discuss how to escape the porn industry, what to do about an addiction to porn and, a memory so glorious that perhaps we should build a statue to it, the website of the MP who campaigned for there to be an internet porn filter.

The point being that this world of ours is a complicated place. Enough of us now understand Hayek’s point about economic planning, that we can’t for the only thing that we have that is capable of calculating the economy is the economy itself. It’s not possible to run a model and then direct it: what happens is emergent from the very method of calculation. What is less well understood is that this applies to all these other areas of life as well. It’s not possible for us to just gaily insist “porn filters for all!” and for that to be actually implemented.

Therefore, logically, we should stop trying to micromanage life in this manner and go off and do something more useful with our energies. And given that doing pretty much anything would be a more useful use of our energies that leaves us all with a great deal of choice over what to do.

This picture is illegal in California

Or rather, the action being performed in that picture is illegal in California. It’s not that the lettuce is not organic or anything. It’s that it is evidence of someone working during their lunch break:

I mentioned earlier that we had struggled to comply with California meal break law. The problem was that my workers needed extra money, and so begged me to be able to work through lunch so they could earn a half-hour more pay each day. They said they would sign a paper saying they had agreed to this. Little did I know that this was a strategy devised by a local attorney who understood meal break litigation better than I. What he knew, but I didn’t, was that based on new case law, a company had to get the employee’s signature every day, not just once, to avoid the meal break penalties. The attorney advised them they could get the money for working lunch AND they could sue later for more money (which he would get a cut of). Which is exactly what they did, waiting until November to sue so they could get some extra money to pay for Christmas bills. This is why — believe it or not — it is now a firing offense at our company to work through lunch in California.

Eventually a system becomes so encrusted by such nonsense that nothing useful can ever be done and all that can be is to chase the paper around in ever decreasing circles. That is arguably what happened to the Ottoman Empire, various incarnations of the various Indian and Chinese empires and so on and on. It’s one of the reasons that we here shout so loudly about regulation and the necessity of a bonfire of much of it.

We do not say that there should not be regulation, not at all. But we do say that we need to carefully consider who is doing the regulating. There are times and circumstances when it does need to be the bureaucrat or the politician. But far more often tasks that they take upon themselves will be better regulated through what we might call simple market processes. Markets are, after all, just the interaction of voluntary behaviour and surely we can trust two adults to agree between themselves about whether someone might usefully check a spreadsheet, or not, while munching on a salad?

It’s the absence of markets that causes poverty

There’s an excellent discussion of a recent finding in development economics over here.

If markets are missing completely, or so unreliable as to effectively be missing, then household separation fails. The extreme case is easiest to think of. If a household is completely autarkic, and can trade with no one else, then it can only consume what it produces. The two decisions are inseparable. If they want a new TV, then they’d better have a source of rare earth elements in their back yard and a passion for soldering.

The importance of knowing if household separation holds or not is that it tells us something fundamentally important about why a developing area is poor.

What’s being looked at is that horrible, $1 a day, poverty that far too many of our fellow humans are stuck in. The big question being, well, are they stuck there because of the way that markets operate? Perhaps “the market” means they can’t get enough fertiliser for example. Or is it that markets simply do not exist and thus they cannot reap the benefits of the division and specialisation of labour and the subsequent trade in the increased production?

The answer appears to be the absence of markets rather than any failure in them. Which leads to an interesting thought about what should be the right way to aid them.

Instead of sending money with which to buy them stuff we should be trying to work out how to create markets. And the most important part of that is in fact information. Not from us to them, but within such communities. And that ties in neatly with something that is becoming apparent from another part of the literature. It may well be that the mobile telephone is the greatest poverty reducing technology of our times. Simply because it does do exactly that, allow the spread of the information that enables markets to do their wealth creation thing. As this excellent paper makes clear.

It’s not quite as simple as “make sure there’s a phone network everywhere and the poor will get rich” but we’re increasingly coming to the view that that’s a damn good start to solving the problem.

UPenn Global Go-To Think Tank Rankings 2014 – how we did

This year’s Global Go-To Think Tank Rankings, which are compiled annually by the University of Pennsylvania, have been released, and the ASI did pretty well. Our global rankings were:

  • 69th in Top Think Tanks Worldwide (Non-US)
  • 16th in think tanks in Western Europe
  • 3rd in Top Domestic Economic Policy Think Tanks
  • 5th in Top International Economic Policy Think Tanks
  • 17th in the Best Use of Social Networks
  • 40th in Think Tanks with the Best External Relations
  • 24th in Think Tanks with the Most Significant Impact on Public Policy
  • 12th in Think Tanks with Outstanding Policy Orientated Public Programmes

The full rankings are here, and congratulations to our friends at other think tanks who also did well, particularly the Cato Institute which came 8th in the total US think tank rankings. We rose in most rankings, and by our own internal measures of impact, media coverage, research quality, events attendance and fundraising, 2014/15 is shaping up to be a very good year indeed.

Reading the report reminded me of the challenge that think tanks (and non-profits in general) all have. As Jeffrey Friedman has observed, when you run a for-profit firm, you have a single measure of success – profit. If you do X and profits go up, keep doing X. If you do X and profits go down, stop doing X. In a complex world having just one thing that matters cuts through quite a lot of confusion.

But, obviously, non-profits don’t have that measure or any single thing we can focus on. For us, it’s a constant struggle. Focus on fundraising too much as a think tank and you end up being good at talking to donors but not good at using their money to make the world better. The tail wags the dog. Focus on media coverage and you become a rent-a-quote. And so on.

The thing you really care about is changing the world. But if that’s done by, say, changing the minds of young people, it takes decades to measure success. If it’s done by focusing on policies implemented, you’re tempted to go for the easy, insignificant win over the difficult long-term change. There’s no single thing you can look at, so it’s tough to cut through the complexity. Rankings like this don’t do that entirely, but every little helps.