Expressing Economic Ideas
By Arnold Kling
One question that Tyler addresses is, “Why economics?” Why doesn’t blogging take place so much in other academic disciplines?
There probably are many answers. I would frame my answer in terms of supply and demand.
There is an audience demand for clear writing about intellectual developments in many fields. In the natural sciences, however, my guess is that the cost of providing this sort of writing tends to be quite high. Only some extremely talented individuals are up to it. For now, their most remunerative outlets are books and other traditional publications, but perhaps some day an educational foundation will provide support for science blogging.
Another question Tyler poses is whether blogging leads to a “dumbing down” of economics. For now, my answer would be that on the contrary, the social utility of the papers that get play on blogs is higher than that of papers that go into journals but are ignored on blogs. So I think that blogging could be a force for positive change.
I can think of only one economic idea that I have never been able to express satisfactorily in non-mathematical terms. That is the Portfolio Separation Theorem, which says that the optimal market portfolio does not depend on individual risk preferences. When I discussed CAPM, I talked around that theorem. I still cannot come up with a good way to explain it. (The conditions under which the theorem holds may or may not apply in practice. That is not the issue here. My point is that I cannot convey the intuition behind the theorem.)
In general, results in economics fall into three categories:
a. Results that I am not aware of or have made no effort to understand.
b. Results that I do not think are important.
c. Results that I can explain without resorting to math.
The Portfolio Separation Theorem is the one result that I can think of that falls outside of those categories.