The Most Effective Economics Exam

Jun 16, 19

Robin Hanson's latest blog entry is his response to Glen Weyl. My comment…

If I am standing quietly, without making any movement, then (according to the physiologists) my muscles are constantly at work, contracting and relaxing in an almost random fashion, but controlled, without my being aware of it, by error-elimination so that every little deviation from my posture is almost at once corrected. So I am kept standing, quietly, by more or less the same method by which an automatic pilot keeps an aircraft steadily on its course.— Karl Popper, Of Clouds and Clocks

I really like the idea of efficiently eradicating errors. In the case of Weyl, he essentially took an exam about your views. You graded his exam and gave him a… D+? Here you are endeavoring to eradicate his errors. Obviously your blog entry isn't an email, it is perfectly public, so everybody can benefit from the education that it offers.

Now I'll give both you and Weyl an exam. The Libertarian Party (LP) is currently giving donors the opportunity to use their donations to rank potential convention themes. Would the themes be better ranked by quadratic voting (QV)?

QV arbitrarily reduces the influence of wealthy people, which is something that Alexandria Ocasio-Cortez thinks is inherently beneficial. Obviously Weyl agrees with her. Are they correct? It would behoove us to find out sooner rather than later.

What Weyl really doesn't seem to appreciate is how relatively easy it would be to conduct a simple test to determine just how differently themes or books or music or dogs or countless other things are ranked by QV and donations. Or, to be less charitable, perhaps he does appreciate this, but he predicts that, if he was proved wrong, then his status would plummet. Ego is an obstacle to education.

On Twitter I offered to bet Bryan Caplan $100 that, within 5 years, democratic social websites (ie Twitter) will be, or will not be, replaced by market social websites (ie Honest Cash). I'm fine making the bet either way because I'm very interested to see whether Caplan will bet on, or against, monetary feedback.

This is essentially an economics exam… and it's more less the same exam that I'm giving to you and Weyl.

Society's resources are limited, which is why it is necessary to rank/prioritize things. The primary mission of economists should be to figure out which ranking system is the best. Fortunately, this isn't that difficult or expensive. It's not like you need to build a particle accelerator. Have your students use voting and spending to rank papers or books or blogs or economists or movies or anything else and then compare the results. If you want to be fancy, you can also have students vote for a student or small group of students to rank the things. You can also throw QV into the mix.

The fact of the matter is, no two ranking systems are equally effective at error elimination. Which ranking system is the most educational?

It is thus that the private interests and passions of individuals naturally dispose them to turn their stocks towards the employments which in ordinary cases are most advantageous to the society. But if from this natural preference they should turn too much of it towards those employments, the fall of profit in them and the rise of it in all others immediately dispose them to alter this faulty distribution. Without any intervention of law, therefore, the private interests and passions of men naturally lead them to divide and distribute the stock of every society among all the different employments carried on in it as nearly as possible in the proportion which is most agreeable to the interest of the whole society. — Adam Smith, Wealth of Nations

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