Debates That Ought Not to Be

Every so often (ok, at least once a day) I encounter seemingly intelligent, rational, and educated people debating a black-and-white point of contention. The topic under debate is no mere opinion, but a matter of fact. Yet despite this—or perhaps because of this—the contention is irresolvable, and the debate bitter.

For example, ever discuss the probability of a flipped coin coming up heads? Many adults still cling to the belief that if you got tails four times in a row that means heads is now due.



I know an engineer who works at a large corporation. Many engineers and managers there don’t understand how to design experiments. He told me about an hour-long facepalm moment. A manager was trying to order some engineers to do the absurd. Based on his misunderstanding of statistics, he wanted them to achieve a higher confidence interval. This does not mean to become more confident. It basically means to increase the size of the data set—i.e. waste more time and money collecting unnecessary data.

There is only one thing worse than when someone doesn’t know something. It is when what he knows just isn’t so (with due respect to Will Rogers and Ronald Reagan). It’s much easier to teach than to persuade someone to unlearn that which is false.

I see the same kind of error all the time in entrepreneurial circles. Clayton Christiansen defined the term disruptive innovation very precisely. Yet despite this, many entrepreneurs and business managers use the word disruptive merely to mean big, or perhaps competitive. Existing customers of incumbent businesses don’t particularly want the disruptive product. However, it has the potential to slowly eat the market from the low-margin soft underbelly up to the high-margin top end.

The transistor radio is a textbook example. In 1954 when Sony released the first transistor radio, were the existing makers of tube hi-fi equipment thinking to replace their good-sounding sets with tinny transistors? Within a few short decades, transistors took over the market.

Another error, closer to home, is when people think they can raise the wage by raising the minimum wage. Marginal productivity, like confidence interval or disruptive innovation, sounds like something it is not. Who would object to raising productivity?

But that is not what marginal productivity means. If you raise marginal productivity—for example by raising the legally mandated wage—you increase the bar. This is the hurdle all workers must get over, or else be rendered submarginal. Submarginal means unemployable.

When you find yourself in such a debate, be aware of what you’re up against.

The above examples are fictional, and purely for entertainment purposes. Any resemblance to actual errors made in monetary economics is purely coincidental.

1 thought on “Debates That Ought Not to Be

  1. Tom Warner

    Good one Doc.
    This problem is all to common. Being aware of it doesn’t necessarily mean that one can avoid the mistake with perfect consistency, although I enjoy it when I catch myself doing it. It’s nice to self correct, otherwise I suffer all that shame and guilt when caught in the act by someone who I’m at odds with on one topic or another. I don’t like those “duh” moments. .
    tw 😉


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