Epistemology, Economics, and Conspiracies

Epistemology (the philosophy of knowledge) is important because it underlies the problem of truth in economics and in all other area of rational research and discourse. Epistemology is also relevant to conspiracies theories. As philosopher Robert Nozick pointed out, in the social sciences, invisible-hand explanations are always preferable because otherwise the conclusion is planted in the premises–a vindication of Adam Smith and classical-liberal economics!

The Ptolemaic system of astronomy also faced an epistemological trap in explaining the movement of planets and stars with the help of epicycles (cycles moving on other circles). When an empirical observation contradicted the system’s predictions, the astronomer only needed to add an epicycle to make the theory fit the fact. Similarly, adding one new conspirator or a new conspiratorial component can always explain away, ad infinitum, any objection to a given conspiracy. Only much later, with the work of mathematician Jean-Baptiste Joseph Fourier in the 18th century, did we start understanding that any smooth curve or movement in space can be approximated with a sufficient number of epicycles.

Ptolemy’s theory was more complicated than needed to understand, and to better understand, the movement of planets and stars. Just like Ptolemaic astronomy, conspiracy theories (at least complex ones) violate Occam’s razor, that is, the principle that “pluralitas non est ponenda sine necessitate,” or “plurality should not be posited without necessity.” In other words, of two explanatory theories, the simplest one should be preferred ceteris paribus. Granted that it is not always clear what “the simplest” means.

Conspiracies are not impossible, but the more complex and the less incentive-compatible they are, the lower their probability. (See my post “Why a Vast Election Fraud is Highly Implausible” and its complement, “Implausible Conspiracy and Unfair Election.)

The shaky epistemological status of conspiracy theories can be illustrated by a recent Facebook post of mine and the comment of Professor Sinclair Davidson, an economist at RMIT University in Australia. I posted:

Here is another [I should have written: “the correct”] conspiracy theory: The Deep State approached Trump around 2015 and asked him to run for president, assuring him of their support. “We know how to run elections,” they told him. The Deep State needed some puppet or clown who would make individual liberty (including the 1st and 2nd Amendments) look totally cranky, thereby preparing the terrain for a future dictator. They told Trump that only he, with his genius, his legendary honesty, and his golf game, could play this important role. Alas, Trump fell in love with the job (as he did with the North Korean dictator), the tweets, the honors, the constant attention, and broke with his Deep State handlers. We saw the consequence on November 3.

Sinclair Davidson brillantly commented:

I have a different theory: Deep state approached Trump exactly like you said but lost control of the 2016 election. He was the patsy meant to lose. Now we see 2020.

Conspiracies can explain any event (even in the physical world if the gods, like Greek gods, engage in conspiracies), and a large number of different conspiracies can explain the same event. Hence conspiracy theories are generally useless, at best.


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Conspiracy theories can cost lives

In a recent post, I discussed the appeal of conspiracy theories. Some of these theories are probably harmless, as with the belief that the government is hiding evidence of alien contact from outer space. In other cases, however, the theories are quite costly.

I’d encourage people to read this twitter thread from a nurse in Texas. He’s a brief excerpt:


And a recent Yahoo article mentions a similar example from South Dakota:

I don’t know how many people share this view, and indeed it is unlikely that people fall neatly into one of two camps.  Thus one poll suggested widespread skepticism about Covid was increasing:

In February, a little more than a quarter of U.S. adults believed the coronavirus was being blown out of proportion. Now, that number has risen to nearly 40% of respondents.

However “blown out of proportion” can include both those who see a hoax, and those who correctly understand that the risk is fairly low for younger people.  There are degrees of skepticism.

Nonetheless, I’ve see quite a few press reports of people are open to some pretty extreme conspiracy theories about Covid:

The survey conducted earlier this month also asked voters how likely they are to believe that “vaccines for COVID-19 will be used to implant tracking chips in Americans,” another baseless theory that has spread on social media this year.

More than a quarter of voters in the poll, 27 percent, said they thought the statement might be true, while 73 percent said it was likely false.

(Yes, I’m just as frustrated by the vague wording as you are.  “Might be”?  “Likely”?)

I don’t have any solution to this problem, but I do believe that when issues become politicized the problem often gets worse.  On average, people will probably make better choices when we don’t protect them from the consequences of their actions.  Treat them like adults, and they are more likely to act like adults.

At the same time I understand that there are “externality” issues with a pandemic, so it’s unlikely that the issue will remain completely apolitical.

HT:  Razib Khan


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There’s nothing “WEIRD” about conspiracy theories

The first time I visited Mexico I was 16 years old. I was rather surprised to discover that many Mexicans believed in conspiracy theories, ideas that I’d never heard before. Some involved the CIA as a puppeteer behind much of what went on in the world.

My wife just visited China and found that many people there also believe in conspiracy theories, such as the claim that Covid-19 was created in a US lab. Based on what I’ve read in various news sources, it seems that conspiracy theories are pretty common in most developing countries.

Over the last few decades of the 20th century, I paid little attention to conspiracy theories.  One would occasionally hear a conspiracy theory about the Kennedy assassination or UFO cover-ups, but they never seemed to be a major part of our culture.

In the 21st century, conspiracy theories have become a much bigger part of America life. There are major conspiracy theories that suggest all four presidents elected during this century are illegitimate, with one election basically being stolen by the Supreme Court, another won by a candidate born overseas, another influenced by a Russian disinformation campaign, and another tainted by vote fraud. The idea of an illegitimate president has gone mainstream. And it’s not just elections, something as innocuous as a vaccine trial announcement is now entangled in various conspiracy theories.

So why have conspiracy theories exploded in 21st century America? First we must ask why people believe conspiracy theories. Penn Jillette argues that there’s a sort of preference for conspiracy theories. Imagine if people want to believe X, but the officials at the top of society (government, media, science, etc.) say that X is false. Also assume that those officials are in a position where they would know the truth.  If you want to continue believing X, then you are forced to develop a conspiracy theory as to why the officials would deny that X is true.

A relatively small share of the world’s population does not engage in “motivated reasoning”, rather they form beliefs based on evidence, apart from what they wish to believe.  Of course these are just tendencies, I suspect that everyone engages in motivated reasoning to at least some extent (including myself), but some do it more than others.  Polls show that the views of Democrats and Republicans on the state of the economy immediately flipped after the 2016 election, before there was even time for the actual economy to change very much.

Psychologist describe a certain type of relatively unbiased person as “WEIRD”, which doesn’t mean strange, it means people from areas that are Western, Educated, Industrialized, Rich and Democratic.”  But even in those countries, only a modest share of people are actually WEIRD.  This category more often applies to moral values, for instance those people who think nepotism is wrong, that it’s wrong to be biased in favor of those you know and like.  But WEIRD also overlaps with a non-biased epistemic style that is often called “rational”.

There are certain ideas that are highly seductive, so much so that even “WEIRDOS” occasionally dabble in conspiracy theories.  So why weren’t conspiracy theories a bigger part of life in the late 20th century?  I believe this is because the media was almost completely controlled by WEIRD people.  The news desks at ABC/NBC/CBS stuck to the mainstream version of events, unless they had clear evidence that the official were lying (say after the Ellsberg Papers came out.)  So there was no major institution to form and disseminate conspiracy theories.  These theories did exist back then, but never gained enough traction to have a big impact on society.

The internet changed everything.  More specifically, it democratized information sharing all over the world.  There are no more “gatekeepers”.  Because less that 10% of the world’s population is truly WEIRD, the internet has made conspiracy theories the dominant epistemic style of the 21st century.  Just as the 21st century will be a low interest rate/high asset price century (as I predicted years ago), it will also be a century of widespread conspiracy theories.  I doubt whether I’ll live along enough to see another president who is generally accepted as legitimate.

PS.  Think about the bizarre coincidence that there’s almost a 100% correlation between people who believe an election was stolen and those who support the losing candidate.  If you think that correlation is weird, then you are probably WEIRD.  If you think that correlation is not in the least surprising, then you are probably not WEIRD.

PPS.  There’s another (much less interesting) question to consider.  Are these conspiracy theories actually true?  Some of them?  All of them?  None of them?  I suspect that a unit within the federal government has looked into this question—perhaps the NSA.  And I imagine that by now they’ve been able to ascertain the answer to this question.

But they aren’t telling us.

PPPS.  There’s some speculation that President Trump will release information on UFOs as he leaves office.  If so, will he be exposing a government conspiracy?  Or would it be a Trump conspiracy to make our intelligence services look devious?

PPPPS.  People who don’t like my ideas want to believe that I don’t actually believe what I write.  These are almost always people who disagree with me.  Scratch that; they are always people who disagree with me.  Hence my comment sections (especially at MoneyIllusion) are full of claims that I am part of a conspiracy to disseminate ideas favored by powerful people.

PPPPPS.  It’s likely that some people will view this post as part of a conspiracy.  Whose interests are served in trying to analyze the psychology of conspiracy theories at this exact moment in history?

Think about it.


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