March 21, 2008

Knowledge and Economics

Chris highlights a rather interesting fact- that consumer spending continued to grow over February despite the banking crisis and the panic in the City of London. Its not a fact that's been reported- and it could indicate that the economic situation is not quite as dire as it appears from reading the newspapers (it could not as well)- but there has been no discussion of it. There has been no analysis even of why it doesn't affect the underlying reality of impending doom. Its interesting for me at least to think about why. There are many possible causes- one of which being that those who write the newspaper articles are all of one mind and dismiss this fact as incidental for some reason and not reflective of underlying realities.

It isn't likely though that every journalist and economist working on these issues has actually made a conscious decision that these figures are to ignored. Rather I suspect they don't know about them. What this feeds into is an important intellectual concept about the gathering of knowledge and how it works. Since Thomas Kuhn philosophers have been interested in paradigms- insights that become the basis for everyone else's work. So for example scientists today will work with Einstein's theory of relativity seeking to extend it and allow for complications within it, they won't all go back and challenge it. Well something similar, but at a very greater speed, happens in journalism and on blogs. Everyone finds a story, they all agree that the story is crucial- say its the unpopularity of a government, the inability of a minister- and then they go and find evidence for it.

The process of journalism and of blogging is not as rational as it seems- we find the evidence which supports our conjectures about the world and we ignore the evidence which doesn't. The good bloggers or journalists go out and try and find evidence which contradicts their world view so that they have to think and be challenged- but there aren't many rewards for that. The rewards are there for people who carry on with the same world view (the Simon Heffers of this world) and who can fit any fact into it. With the economic crisis, there would be few rewards for saying that such a thing is not happening- the rewards come for stating with any ammount of economic literacy that it is and that its going to be awful, the next great depression etc etc. Afterall if it doesn't happen, the journalist will only be exposed in Private Eye but will be able to keep their job through the next paradigm.