Economic Ideas Not Well Popularized
By Arnold Kling
Tyler Cowen asks which economic ideas are most difficult to popularize. This could mean (a) that there is nowhere to go to read a definitive popular version or (b) that people can read a definitive popular treatment and yet walk away either unconvinced or with a distorted view of the theory.
For (a), my personal vote would be the Arrow impossibility theorem. I have not found a convincing explanation, although there are many attempts. I spent a lot of time with it many years ago, and I still do not think I get it. I vaguely suspect that the “nondictatorship principle” is a swindle in the way it enters the argument.
For (b), I do not think that Markowitz and Sharpe portfolio theory is well popularized, again despite many attempts. Most people think that diversification lowers risk and return. They do not get the concept of an efficient portfolio.