Why do we trust physicists more than we trust economists?
Both are dependent upon complex math and reach abstruse, counterintuitive conclusions. Both use technical jargon and deal with important public policy questions. And both deal with fantastically complex questions about which there is often considerable controversy. So why do we look at the complex stuff we own, like iPads, heart stents, or web-based home offices and say, “Wow, the physics of that is awesome,” but when we see a global banking system with near-instantaneous payments or a cap-and-trade air pollution regime that has reduced acid rain or global trade that delivers higher quality goods at lower real prices, we don’t credit the economists that make these things possible?
One reason is politics. While politics colors both disciplines, it is more directly tied in with economic assumptions. Democrats tend to favor more government intervention; Republicans seem to prefer market-based solutions. These are foundational matters in economics, so economists often speak directly to our basic political assumptions. A right-leaning citizen is naturally skeptical of Paul Krugman, who, as a Keynesian, argues that government spending should increase by trillions; a left-leaning voter will naturally challenge the arguments of Russ Roberts who believes that public schools have largely failed, and that government should get out of education.
Since many of us have core beliefs (and personal economic interests) in government spending or in various educational approaches, we question these economists more than we do the physicists involved in controversies over string theory or neutrino mass. Those issues—while important—don’t appear to directly influence what we do every day, the same way that our property taxes affect the local elementary school.
But both fields are populated by “experts,” and so both deserve our skepticism. Experts have a way of popping off on subjects they really know nothing about, like Linus Pauling advocating for Vitamin C or Steven Hawking on whether God exists. We shouldn’t trust specialists just because of their credentials: results are what matters. And when anyone trades on a Ph.D. to get you to buy something or vote a certain way, it’s best to grab hold of your wallet.
Douglas R. Tengdin, CFA
Chief Investment Officer
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