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A little bit of knowledge is a dangerous thing

Summary:
Generally speaking, there’s an advantage to being better-educated. But is this always true? There are actually quite a few cases where education leads people astray. Thus it is often better educated people who say silly things like “IQ doesn’t measure anything important”. Occasionally, being somewhat well educated leads one astray, whereas being highly educated leads one back to the truth. Consider this question: Would our economy benefit if Americans were to save more? An uneducated person might say yes, recalling that ever since they were a child they had been told that saving is virtuous. A penny saved is a penny earned. That doesn’t mean that the less educated save a lot of money, just that they believe it is virtuous. A college grad might recall learning in

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Generally speaking, there’s an advantage to being better-educated. But is this always true? There are actually quite a few cases where education leads people astray. Thus it is often better educated people who say silly things like “IQ doesn’t measure anything important”.

Occasionally, being somewhat well educated leads one astray, whereas being highly educated leads one back to the truth. Consider this question: Would our economy benefit if Americans were to save more?

An uneducated person might say yes, recalling that ever since they were a child they had been told that saving is virtuous. A penny saved is a penny earned. That doesn’t mean that the less educated save a lot of money, just that they believe it is virtuous.

A college grad might recall learning in economics that an increase in saving can reduce aggregate demand, pushing the economy into recession.

Someone with a PhD in economics from Chicago (or a reader of this blog) might understand that saving is virtuous because it leads to more investment, and the Fed will offset any decline in AD due to an increased propensity to save.

I thought of this when reading a NY Review of Books article about vaccinations:

Some of the other factors she mentions are ones I recognize from my own clinics and consultations in Scotland: the steadily widening disparity between the age of first-time mothers at the top and the bottom of society (mothers who have chosen to delay childbearing generally have higher levels of education and are more likely to reject vaccination, considering themselves “experts on their own children”), overconfidence in the power of children to fight off infectious disease thanks to the phenomenal success of vaccination, and the rise among elite groups of “healthism”—the belief that healthy eating and exercise can protect against infectious diseases that, through virtually the whole of human history, have imperiled our lives.

This reminds me of the saving question, with three levels of understanding:

An uneducated mother is likely to trust the doctor who tells her that vaccinations protect the child from disease.

A more educated mother may understand that vaccines impose an external benefit, and then try to free ride off the vaccination of other children in the belief that vaccines are risky.

A mom who is a highly educated medical doctor may understand the external benefit argument, but also understand that there is a lot of misinformation about the risks of vaccines and that even though many of the benefits are external, even the private benefits exceeds the cost.

Conclusion:  I little bit of knowledge can be a dangerous thing, but a lot of knowledge is generally helpful.

Scott Sumner
Scott B. Sumner is Research Fellow at the Independent Institute, the Director of the Program on Monetary Policy at the Mercatus Center at George Mason University and an economist who teaches at Bentley University in Waltham, Massachusetts. His economics blog, The Money Illusion, popularized the idea of nominal GDP targeting, which says that the Fed should target nominal GDP—i.e., real GDP growth plus the rate of inflation—to better "induce the correct level of business investment". In May 2012, Chicago Fed President Charles L. Evans became the first sitting member of the Federal Open Market Committee (FOMC) to endorse the idea.

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