There is a danger that anything a Christian writes about Christmas for an economics blog will be a heresy or will be perceived as moving the focus away from where it belongs and towards the material aspects of life. They would be fair points. But perhaps Christmas is a good time to reflect on the abundance of the world and not be more gloomy than is justified. In turn, we can think about how this relates to some aspects of psychology and virtue ethics.
If you were to ask a group of people the following question: “by what percentage do you believe that the world’s forest cover falls each year?” I wonder if 50 per cent would estimate too high and 50 per cent too low. The correct answer is that forest cover is falling by 0.08 per cent per year and in most countries it is increasing. There is little doubt that the overwhelming majority of people would overestimate the decline.
Similarly, if you were to ask “is income inequality in the world, increasing, staying about the same or decreasing?” how many people would correctly identify that, for the first time in two centuries, income inequality has been decreasing on a sustained basis? Very few I should imagine – certainly that is my experience from asking that question at the beginning of lectures to church groups and schools.
Indeed, opinion polls suggest that the view that our world is going to hell in a handcart is widespread. When opinion polls are conducted on almost anything from world poverty rates, literacy rates amongst girls in poor countries to life expectancy in poor countries, answers are given that are miles away from the truth and always in the direction of greater pessimism.
In a recent Ipsos-Mori poll, 94 per cent of British respondents under-estimated the proportion of girls finishing school in low-income countries and 91 per cent believed that the proportion of people living in absolute poverty had increased or remained about the same in recent decades when that proportion has simply collapsed from about 40 per cent to under 10 per cent. Interestingly, if you ask graduates the same questions, the answers are even further from reality.
Why is this and does it matter?
I would like to suggest three reasons why we are so pessimistic. The first is that the news we hear is invariably bad news. Normality is just not interesting. The fact that more people will have lunch today than at any time in the world’s history is not newsworthy. The 49 days out of 50 when my trains run more or less on time make really boring news stories. On the other hand, a trackside fire at Clapham bringing total chaos to the South East of England is both interesting and newsworthy. Normality is boring.
The second reason probably arises from how academics act. Academics get rewarded both financially and in terms of prestige for solving problems. So they have a strong incentive to identify problems (which is fine) and to exaggerate problems (which is not fine) in order to attract funds.
The third reason is what the philosopher Stephen Pinker called the “psychology of moralisation”. This is the tendency of academics, intellectuals, people in civil society such as religious leaders and politicians, and so on, to want to focus on problems in the world to make them look morally concerned. People who focus on problems are perceived to be morally engaged. People who say the world is okay are often regarded as apathetic and people look down on them.
Does this matter? Yes it does. If we don’t understand the facts we will create a distorted discourse about policy in the public square and we will get bad policy. If the pursuit of a set of policies over the last 30 years is assumed to have produced outcomes that are different from the reality, in the future we might choose the wrong policies and actually make things worse.
We can relate this to what theologians and philosophers call virtue ethics. The virtue of prudence is defined as: “the virtue that disposes practical reason to discern our true good in every circumstance and to choose the right means of achieving it.” In other words, we should consider things carefully; we should look before we leap.
The virtue of prudence tells us that we can learn from observing and understanding the good things that are going on in the world as well as focusing on the problems. Why do some countries destroy forests and others not (forest conservation seems strongly related to property rights and prosperity)? Why do some countries prosper and others not? And so on.
So, in 2019, let’s have a bit more prudence! Good economic policy is a matter of life and death for poor people. Good economic policy makes the difference between forests being destroyed and forests being nurtured. The development of good policy demands not just that we are grateful for the good things of the world but that we understand how they come about.
This blog post is an adaptation of a talk given to the Ideas Exchange, at St. Mary’s University, Twickenham. It was originally published by the Institute of Economic Affairs and is reprinted with permission.
(Photo credit: Kevin Gill. This photo has been cropped. CC BY 2.0.)