How did we geeks become experts on (macro)economics? Posted by Louis Brandy on 09 February 2009

There are certain topics that are certain to incite the internet. Emacs vs vi. Programming language holy wars. When it comes to programming geeks, though, I've got one that will get them to break out the flamethrowers. All you have to do is bring up topics like fiat currency, the gold standard, money creation, the Federal Reserve and inflation. It's like walking into a southern church and bringing up evolution. (It's not often I get to compare you guys to creationists.)

Let me let you, dear reader, in on a little secret: you don't know jack about macroeconomics. Seriously. You don't.... No, you don't. Stop arguing with me.

There are three camps of people. One of them already understands they don't know much (or enough) about macroeconomics. This isn't for you guys. The other two are the people who have strong opinions on topics like the minimum wage's effect on inflation. 99.9997% of those who remain have absolutely no idea what they are talking about and who are absolutely certain they are well-read on the subject. The last 0.0003% actually do know what they are talking about but are impossible to discern from the rest. Since their occurrence rate is so far below the noise threshold, it's safe to assume they don't really exist.

To those of you who think you are part of that fraction of a percent: No you aren't! I told you to stop arguing with me!

Ignorance and Competence

The more interesting aspect is absolute certainty that nerds talk about things like the Federal Reserve. It's not like other topics. In, for example, discussions about finer points of the x86 architecture, you'll find a bunch of nerds happily discussing what they know and happily learning from others. But in a discussion of economics? Oh, no.Every, single, person in the discussion is an expert. Except, of course, they aren't. None of them are.

I've done a fair bit of reading on topics like the Federal Reserve and money creation, like any good amateur, and the only thing I know for certain is that it's insanely complex. Now, I know what you are thinking, you've done the research. You know what you are talking about. You've read Ayn Rand. You've watched dozens of YouTube videos! Dozens! The rest of those simpletons don't know what they are talking about, but you do. I'm not not trying to be a dick here, but, well... you don't. That's just basic probability. Still think you do? You know that the the more ignorant you are on a topic, the more sure you are of your own competence? Still confident? Did you know 80% of people think they are above average drivers?

Ugh. Amateurs!

Why?

The more interesting question is why? Why the false expertise? Why the air of authority? Why the certainty? The conversations tend to be extremely emotional and defensive. This doesn't happen in other fields. Programmers love to talk about quantum physics, the speed of light, and black holes. But you won't find geeks getting all authoritative on the finer points of the event horizon? Why? Because that shit is complicated, beyond their knowledge, and they know it. This doesn't happen with macroeconomics. Don't kid yourself. It's complicated, too. And it's beyond your knowledge. So what's the difference?

Here's my theory. Macro-economics is:

Easy to grasp (the basic principles, anyway)

Experiments are pretty much impossible (making being disproven relatively rare)

The first makes you think you are an expert, and the second removes any fear you have of being wrong. The theory of evolution, by the way, has very similar properties. Physics, on the other hand, is terrifyingly complex. It's obvious to an amateur that they are an amateur. And if you try talking out your wazoo, someone might come along who can literally disprove you. This is why creationists have chosen evolution and geeks have chosen macroeconomics. They are tricked into a false sense of expertise.

Unlike the evolutionists, though, economists don't have a mini-community of people making youtube videos and evangelizing their points of view to the general public. It's hard to find solid argument from real experts debunking various crackpot internet theories (mostly from youtube videos). That's probably because they don't have a "real" threat from the crackpots like the scientists do. The net effect, however, is that youtube is filled with trashy amateur pseudo-economics videos (I take no responsibility for any brain melting that occurs) that get spread around this huge internet sub-culture of people that range from the rational to the conspiratorial.

In Summary

Fiat currency is superior to the gold standard. Bankers are not evil. The Federal Reserve does a half decent job. Money is not debt. Debt isn't even bad -- the vast majority of it can be healthy. If you disagree with me, you are wrong, and a nutjob.

note for those who skipped to the summary: this paragraph is an imitation of the exact behavior I'm criticizing. I don't necessarily hold any of these opinions (except the one about you being a nutjob).