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Donald Boudreaux

Simple vs. simplistic

| Tuesday, July 25, 2017, 9:00 p.m.
Deb Bonneau of Verona collected bottled water and other supplies for victims of 2016's Hurricane Matthew in North Carolina. People often accept a simplistic but implausible explanation for rising prices of such items in the wake of such natural disasters. (Submitted photo)
Deb Bonneau of Verona collected bottled water and other supplies for victims of 2016's Hurricane Matthew in North Carolina. People often accept a simplistic but implausible explanation for rising prices of such items in the wake of such natural disasters. (Submitted photo)

The Franciscan friar William of Occam (c. 1287-1347) is best known for his “razor.” Occam's razor is a scientific rule that says that, between two different explanations of some phenomenon, the simpler of the two explanations is preferred to the more elaborate one.

If your alarm clock failed to go off at 6 a.m., it might be that your cat pawed it during the night and accidentally turned it off. But the better explanation is the simpler one: You forgot to set it.

Occam's razor offers solid guidance for our thinking. Yet many people commit a different error than the one William warned against. They latch onto the simplest explanation even when it's implausible.

A good example is when the prices of bottled water and other staple goods rise immediately after natural disasters.

Many people explain these price hikes by exclaiming “greed!” Yet a better explanation is that natural disasters both reduce the supplies of these goods and increase the demand for them.

This “supply-and-demand” explanation isn't as simple as “greed,” but it's much more plausible.

Those who explain the price hikes simply as the result of greed can't answer key questions, such as: Why does greed only intensify when natural disasters strike? Why didn't sellers get greedier, say, two weeks earlier? And what explains the fact that prices fall back to their previous levels as time passes? Are these price cuts caused by sellers' increasing altruism?

Another example of latching on to an explanation because it's the simplest one available is the commonplace habit of blaming political disagreements on other people's bad motives.

If Jones, who opposes school choice, encounters Smith's argument in favor of school choice, it's very simple for Jones to dismiss Smith's argument by accusing Smith of being a racist, or of being an enemy of the poor, or of having some other unsavory motive.

For Jones to take Smith's argument seriously requires that Jones spend some time and effort to better understand that argument. It's far easier for Jones simply to conclude from the start that Smith is evil and leave it at that.

Or consider Duke University historian Nancy MacLean's thesis in her new book, “Democracy in Chains.” MacLean argues that Nobel laureate economist James Buchanan (1919-2013) was secretly a racist enemy of the people and friend of rich oligarchs.

Her evidence? None, really — except that Buchanan eloquently and often argued that democracy works only if it is properly restrained by constitutional rules. Because Buchanan's assessment of the workings of majoritarian democracy was less rosy than is MacLean's, MacLean simplistically concludes that Buchanan sought to silence voters so that oligarchs may run roughshod over them.

Those of us who are deeply familiar with Buchanan's work (I was for several years his colleague at George Mason University) know that MacLean's simplistic conclusion is preposterous. She seems not to have exerted the effort to study Buchanan's works carefully.

Donald J. Boudreaux is a professor of economics and Getchell Chair at George Mason University in Fairfax, Va. His column appears twice monthly.

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