The Guide to Critical Thinking in Economics Richard

The Guide to Critical Thinking in Economics Richard L. Epstein Carolyn Kernberger Advanced Reasoning Forum Copyright © 2005 by South-Western, a division of Thomson Learning. All rights reserved.

Claims A Claim is a declarative sentence used in such a way that it is either true or false (but not both) A Claim is subjective if whether it is true or false depends on what someone (or something or some group) thinks, believes, or feels. A subjective claim invokes personal standards. Claims that are not subjective are objective, and those use impersonal standards.

Are the following claims objective or subjective? Socialism is the most efficient way to ensure that all members of a society are fed and clothed. Subjectivist Objective: There’s fallacy: a lot It’sofa disagreement mistake to argue about thatthis. But it’s still because thereobjective, is a lot ofassuming disagreement “efficient” about has whether abeen claim clearly is true, defined. it’s therefore subjective. Investors in 1997 overwhelmingly preferred noload mutual funds. This is a subjective claim: whether it is true or false depends on what a group of people thought.

Definition A Definition is an explanation or stipulation of how to use a word or phrase. A definition is not true or false, but good or bad, apt or wrong. Definitions tell us what we’re talking about. Claims are what we use to make assertions about that subject. A Definition is not a Claim.

Steps in making a good definition 1. Show the need for the definition. 2. State the definition. 3. Make sure the words make sense. 4. Give examples where the definition applies. 5. Give examples where the definition does not apply. 6. If necessary, contrast it with other likely definitions. 7. Possibly revise your definition.

Does this fulfill the 7 steps listed for a good definition? In the broadest sense, production is the act of increasing one’s utility. Exchange of existing goods is productive because, as we have seen, it increases one’s utility. Production also can occur when the physical attributes of resources—including their time of availability, place, or form—are changed. We shall bow to convention and restrict the label “production” to the changing or creating of goods and services—that is, wealth. Analysis: This is an example of a carefully made and explained definition.

Slanter: A slanter is any choice of words that attempts to convince by concealing a dubious claim • Euphemism-temporarily misplaced inventory: instead of stolen. • Dyphemism- “Freedom fighters”—the guerillas are good people fighting to liberate their country, versus “Terrorists”—the guerillas are bad people, inflicting violence on civilians for their own partisan ends without popular support. • Weaseler: I am truly sorry that it has taken so long for you to understand what I have been saying. For what The speaker did the speaker just apologized apologize? that the audience wasn’t smart enough to understand.

Arguments An Argument is an attempt to convince someone (possibly yourself) that a particular claim, called the conclusion, is true. The rest of the argument is a collection of claims called the premises, which are given as the reasons for believing the conclusion is true. The conclusion is sometimes called the issue that is being debated.

What are the claims in this argument? The Standard and Poor’s index rose 4% today. Dick has $2, 000 in an S&P index mutual fund. So Dick’s mutual fund account went up $80 today. Premise 1: The S&P index rose 4% today Premise 2: Dick has $2, 000 in an S&P index mutual fund Conclusion: Dick’s mutual fund account went up $80 today Is. Analysis: this a valid argument? This is a valid: It’s impossible for its premises to be true and conclusion false. Whether it is good depends on whether its premises are true.

What are the claims in this argument? Señora Vez is an economics professor. All economics professors are socialists. So Señora Vez is a socialist. Premise 1: Señora Vez is an economics professor Premise 2: All economics professors are socialists Conclusion: Señora Vez is a socialist Is. Analysis: this a valid argument? This is a valid argument: It is impossible for the premises to be true and the conclusion to be false. But it’s a bad argument because the second premise is false.

The Guide to Repairing Arguments Given an (implicit) argument that is apparently defective, we are justified in adding a premise or conclusion if it satisfies the following three conditions: • The argument becomes stronger or valid • The premise is plausible and would seem plausible to the other person • The premise is more plausible than the conclusion If the argument is then valid or strong, yet one of the original premises is false or dubious, we may delete that premise if the argument remains valid or strong.

Can this argument be repaired? It is only for the sake of profit that any man employs capital in the support of industry; and he will always, therefore, endeavor to employ it in the support of that industry of which the produce is likely to be of greatest value, or to exchange for the greatest quantity either of money or of other goods. Analysis: argument. This argument is valid, but its This is a cause/effect single premise is false: Lots of other Premise 1: Profit alone drives manwhere to employ capital in considerations about to invest their the support ofcapital industry matter to many people: Conclusion: Capital will always used to maximize convenience, social be responsibility…So profit there’s no way to repair it, and it’s bad.

Unrepairable Arguments We can’t repair an argument if any one of the following hold: • There’s no argument here • The argument is so lacking in coherence that there’s nothing obvious to add. • The premises it uses are false or dubious and cannot be deleted. • The obvious premise to add would make the argument weak. • The obvious premise to add to make the argument strong or valid is false. • The conclusion is clearly false.

Here a few more examples. Try to analyze them on your own before clicking to see the author’s analysis.

Identify slanters & evaluate argument. Fair-employment laws impose burdens on some employees. If a class of people want to work together, they are forbidden to do so by the fair-employment laws. If Armenians prefer to work with Armenians, or Catholics with Catholics, or a Negro with Negroes, or a Mormon with Mormons, these laws make that illegal, for the employer would be susceptible to legal prosecution for “discrimination. ” Analysis: This is not an argument, though it What does may placing discrimination seem like one. It isinan explanation of the quotation marks tell you. It about the to recognize when first claim. is important author’s position? someone is asking you to accept claims without proof, which is common in textbooks.

What type of reasoning is this? What is prudence in the conduct of every private family, can scarce be folly in that of a great kingdom. If a foreign country can supply us with a commodity cheaper than we ourselves make it, better buy it of them with some part of the produce of our own industry, employed in a way in which we have some advantage. Analysis: by A analogy: country is. Countries not like an individual: It may be Reasoning are like families Is it a sound argument? difficult for an individual to learn how to produce a commodity more cheaply, but it might be easy for an industry within a country to become much more efficient with government protection. This does not show that Smith’s conclusion is false, but that his analogy shouldn’t convince you its true.

How many claims are present? All criminals should be locked up forever, or we should put more money into rehabilitating criminals, or we should accept that our streets will never be safe, or we should have a system for monitoring ex-convicts. We can’t lock up all criminals forever, because it would be too expensive. We definitely won’t accept that our streets will never be safe. So either we should put more money into rehabilitating criminals, or we should have some system for monitoring ex-convicts. Analysis: The first sentence is all one claim; it has the form A or B or C or D. So the argument as whole is valid: A or B or C or D; not A; not C; therefore B or D. Whether its good or not depends on whether the premises are plausible.

What is the author’s view on rent control? Almost all economists believe that rent control adversely affects the availability and quality of housing and is very costly way of helping the most needy members of society. Nonetheless, many city governments choose to ignore the advice of economists and place ceilings on the rents that landlords may charge their tenants. Analysis: That “nonetheless”slips in a value judgment that citythe governments shouldn’t adopt a What word most reflects author’s view? policy that adversely affects availability and quality of housing and is a costly way of helping the most needy members of society. You may agree, but you need to be aware that in doing so you’re accepting a normative standard.

Is this a valid argument? It’s real clear looking at the booms and busts in our economy that they’re what swing elections. From 1983 to 1984 real GDP grew by nearly 7%, and that helped ensure Ronald Reagan’s re-election. But from 1990 to 1991, real GDP fell by 1%, which helped Bill Clinton defeat George Bush. Analysis: The first sentence here is a general causal “The be growth (decrease) of GDP is a How could thisclaim argument refuted? Unless “swings” means no more thata that the causal factor in electing (defeating) presidential purported can be a slight claims causal (helps=is factor, wea candidate. ”cause The two particular can actually theevidence causal claim by noting causal factor)refute are no for that, only that the incumbentsince Al Gore, didnonot soundly defeat illustrations, there’s reason to think George W. Bush 2000 when real GDP growth they’re more thaninpost hoc reasoning. was very high.