When Do Hypotheticals Cover Their Cost? By Bryan Caplan

Suppose I asked, “Where would you buy steaks if you only shopped at stores starting with the letter Q?” A few people would wrack their brains for an answer. But most would dismiss the question: “That will never happen, so who cares?!”

Economically speaking, the popular reaction seems perfectly sensible. The cost of devising a contingency plan has little to do with the probability of the contingency. The expected benefits of devising a contingency plan, in contrast, heavily depend on the probability of the contingency. So when someone confronts you with an extremely unlikely hypothetical, spurning the question is usually the prudent course.

This seems like an awkward conclusion for me. I habitually propose remote hypotheticals. If you could save either one American or x foreigners, how big would x have to be before you’d save the foreigners? If a million farmers were stuck in Antarctica, would allowing them to

migrate to a more favorable climate enrich non-Antarcticans? If six trillion Nazis were sadistically savoring the Holocaust on interstellar television, would the Holocaust still be wrong?

When thinkers refuse to engage such hypotheticals, I tend to see them as evasive or anti-intellectual. But couldn’t they just as easily be prudent people who value their time too much to devise contingency plans for these extraordinarily remote contingencies?

No. Hypotheticals serve two radically different functions. Devising practical contingency plans is one such function. The other function, however, is to achieve intellectual clarity in a complex world. Pondering a hypothetical is fruitful as long as it serves one of these two functions.

“Where would you buy steaks if you only shopped at stores starting with the letter Q?” is indeed a useless hypothetical.* The scenario will never occur, and it fails to illuminate any broader issue.

My other hypotheticals are even less likely to occur. But each shines a spotlight on a big question.

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“If you could save either one American or x foreigners, how

big would x have to be before you’d save the foreigners?” provides a clean measure of the respondent’s nationalism. “If a million

farmers were stuck in Antarctica, would allowing them to migrate to a more

favorable climate enrich non-Antarcticans?” shows how immigration can enrich non-immigrants. “If six trillion Nazis were sadistically favoring the Holocaust on interstellar television, would the Holocaust still be wrong?” exposes the moral absurdity of Kaldor-Hicks efficiency maximization.

Each of these topics is important. Why not stay close to the real world when we analyze them? We typically do. Unfortunately, the real world is so complicated that thinkers who stay close to the real world keep getting bogged down in side issues. Quality hypotheticals push the debate forward by stripping side issues away and getting to the heart of the matter. As my favorite philosopher Mike Huemer patiently explains:

Some will still want to know, reasonably enough, why

thought experiments are useful… Why can we not learn at least as well through the

consideration of actual or at least realistic examples? Briefly,

the reason is that hypothetical thought experiments provide a means

for conceptual

controls that often cannot be reproduced in reality. Or,

in other words, they provide a way of mentally isolating

a causal, explanatory, or logical factor for examination on its own

which normally, in the real world, cannot be isolated, and to do so

while still discussing a concrete situation.

Five-year-olds have been known to barrage their parents with tiresome hypotheticals. “Where will my birthday party be if there’s a fire at Pump It Up?” “Then we’ll do laser tag.” “What if the laser tag place burns down too?” And so on. The lesson to draw is not that hypotheticals are immature, but that five-years-olds pose immature hypotheticals. Instead of teaching kids to make all their questions realistic, we should teach them to make their fantastic questions insightful. Yes, some hypothetical questions fail to cover their costs. But unless you entertain hypothetical questions, you can’t even enter the idea business in the first place.

* Except in this post, where it’s a useful example of a useless hypothetical.