Co-blogger David Henderson recently posted about how political partisanship makes people more disposed to ignore or deny basic facts in a way that sports partisanship does not. I agree completely with what he says. In fact, I would say what he describes shows how many – perhaps most – people talk about politics in a way I will describe as political noncognitivism. To unpack what I mean by that, indulge me for a moment with a digression into metaethics.
In metaethics, noncognitivism is a metaethical theory that differs from realism, antirealism, and subjectivism. Moral realists believe that moral statements assert propositions, and these propositions can be objectively true or false – that is, true or false independent of the attitudes of any subject. Moral subjectivists believe moral statements assert propositions that are subjectively true or false – that is, the truth or falsity of the statement depends on the attitudes of a subject. Moral antirealists believe ethical statements assert propositions, but those propositions are always objectively false, because there are no moral facts or moral properties. Noncognitivists argue that moral statements are neither true nor false, because moral statements don’t have any propositional content. Noncognitivism generally comes in two flavors – expressivism, and prescriptivism. The former says that what seem like propositional statements about morality really just express attitudes. To the expressivist, when someone says “It’s wrong to murder” what they are really saying is “Boo for murder!”, which does not assert a proposition, and is neither true nor false. Prescriptivists says that what seem like moral propositions are actually just commands, so when you say “it’s wrong to murder” what you’re actually saying is “Don’t murder!”, which is also neither true nor false and does not assert a proposition.
That said, let’s start with something readers of this blog likely already know – the general public is wildly misinformed about issues of basic economics. And as Bryan Caplan has pointed out, the errors the public makes in their economic beliefs are not random, but systemic – they tend to lean in a very anti-market direction. A recent paper examining the phenomenon of “lay economic reasoning” points out one striking example of the gap between what is commonly believed and reality – “The general public believed the average profit margin made by American corporations to be 46.7%, while the actual average that year was just 3%.” That is, a typical member of the public believes that profit margins for corporations are over fifteen times higher than they actually are. This is not a small error.
Over the years, I’ve encountered mistakes like this in conversations about economics many times. And I’ve noticed a consistent pattern in how people respond to the information. They might say “Corporations are making too much in profits!” Then, you ask them what they think corporate profit margins are, and what they should be. They respond by saying that corporations are making over 40% profit margins, and they think that a “fair profit margin” would be 5%. Now, suppose they discover profit margins are in fact 3%. What response would you expect?
One response is to deny the basic facts, as David Henderson correctly points out. But that’s not the only response I’ve seen. Some people, when shown the data, will in fact admit they were wrong and that corporate profits are nowhere near as high as they initially believed. Now, if a person’s political views were meant to describe what they believed the facts were, the response consistent with their stated beliefs and the facts should be to decide that corporate profits are actually too low. After all, corporate profits, it turns out, are 40% lower than what they just declared was a fair rate! Yet I’ve seen this happen precisely zero times in my life.
It’s a similar story with taxes. Often I’ve heard people say something like “The top 1% doesn’t pay their fair share of income taxes!” Ask them what percentage of income taxes are paid by the top 1% and what percentage they think it should be, and they might say something like “the top 1% only pays 10% of income taxes and they should pay 25%.” And if you point out to them that actually, the top 1% pays over 40% of total income taxes, significantly higher than the amount they just said it should be, you see the same pattern. There is a zero point nothing percent chance they will say this means they top 1% are actually overtaxed, because it turns out the top 1% are paying significantly more in taxes than what they had just declared would be the “fair” rate. They will still go on insisting that the amount paid by the top 1% should be higher.
I think this shows that a lot of people are political noncognitivists. People will say “corporate profits are too high” or “the top 1% doesn’t pay their fair share” without any reference to what those numbers actually are or even what they themselves think those number should be. When sports fans talk about how a game went down, they are asserting propositions, which makes what they say responsive to facts. But when political partisans say “corporate profits are too high” they aren’t really trying to assert specific propositions about the current state of the world and some alternate state they think would be better. This is why if it turns out the actual state of the world is superior to their stated goal by their own standards, they don’t cheer with victory – they simply move the goalpost while sticking with the original slogan. All the slogan was really meant to communicate is “hooray for the Blue Tribe!”
I pointed to a similar way this thinking can manifest in a previous post where I was critiquing Yoram Hazony’s book on conservatism. Hazony claimed that free trade has reduced America’s manufacturing capabilities – and I pointed out that while America’s manufacturing employment has fallen, America’s manufacturing capabilities have risen, in the same way and for the same reasons that American agricultural capacity has risen even though agricultural employment has fallen. In both cases, technological improvements allow for much greater output to be produced with fewer workers. As I said in that post, “If the loss of manufacturing employment is truly Hazony’s concern, he’s unduly focused on what amounts to a trivial factor in that regard – he should be spending far more time attempting to put an end to technological progress itself. If, however, Hazony is concerned with manufacturing capabilities, as he says, then he has one less thing to worry about – America’s manufacturing capabilities have only been increasing.” Yet, the people who think American manufacturing is dying will often continue to say so even when they become aware that American manufacturing capacity is greater than ever. Claims about what manufacturing is currently like or how it should be are not what is actually meant by many people who express this concern – what they really mean to say is “hooray for the Red Tribe!”
As a metaethical theory, noncognitivism is hopelessly muddled (and thankfully, not taken seriously by most moral philosophers these days), but I think there is a significant element of noncognitivism in most people’s political speech. People rarely update their stated political beliefs in light of new facts because their stated political beliefs were never meant to express propositional beliefs about the state of the world. They are simply a form of political, expressive noncognitivism – a declaration of attitude and alignment to a tribe.
READER COMMENTS
SteveM
Feb 14 2024 at 1:44pm
While I agree with your points, I suspect your corporate profit and top 1% examples mostly demonstrate that people are not pedantic/specific in their communication.
When one tells people the actual average corporate profit margin, people don’t bother to state that they really think something like “No company should have a 40% profit margin”. The average corporate profit(including losers) necessarily address that belief.
Similarly, people generally are thinking/talking about effective personal tax rate rather than % of total taxes.
Say someone is thinking that nobody should commit a mass murder. Telling them that the average american murders 0.000078 people doesn’t really address their thought.
You can say that they should pay more attention to the question and to their reply but I think that is a bit different than noncognitivism.
David Seltzer
Feb 14 2024 at 1:45pm
Kevin, noncognitivism is rooted in ignorance. The historical average GROSS MARGIN for the S&P 500 companies is about 41%. The historical NET PROFIT margin is about 5.6%. Revenue +( – CGOS-Expenses-Interest – taxes). The difference between gross and net, paid human and physical capital as well as transfers able bodied workers. BTW. In 2018, the top 50 percent of all taxpayers paid 97.1 percent of all individual income taxes, while the bottom 50 percent paid the remaining 2.9 percent.
Federal Income Tax Data, 2021 Update | Tax Foundation
taxfoundation.org/data/all/federal/federal-income-tax-data-2021/. It seems about half were free riders.
David Seltzer
Feb 14 2024 at 2:03pm
Meant to able bodied workers !
Andrew_FL
Feb 14 2024 at 4:22pm
Have you tried repeating this exercise on the same individuals? I suspect what’s really going on is that they hear you give the correct information, nod along and say “Oh, okay” but actually reject what you say as truth, instead privately concluding that numbers are all fake, perhaps a conspiracy.
Dylan
Feb 14 2024 at 7:59pm
I don’t put much stock in the profit margin quote, mostly because I find that very few people even understand the difference between revenue and profit in the first place. Let alone the difference between gross margins, operating margins, and net margins. I gave a talk to business owners today where there was some confusion about the issue, and that’s an audience that should really know!
Jim Glass
Feb 15 2024 at 1:55am
Well, I think he gave an inappropriate example…
No, it is A LOT tougher to find data you don’t understand, judge it in a context you don’t know, and weigh it against all the contrary presentations listed on Google. I worked with this very data professionally for decades, and it would take me a while to find the current number right now. For one thing you’d have to tell me which measure of taxes to use, there are several. But while I wait, I’ve already seem that TD pass 20 times.
Exactly like sports fans stick to believing totally false, long debunked fallacies: great teams win close games, “clutch play” by great players, “hot” NBA shooters and MLB hitters, when a MLB defense leads the league in double plays that’s a good thing … the list is endless.
Why don’t sports fans just Google up their beliefs to learn they are false? Because that is more difficult than just watching a game. After all, if Prof Henderson had checked his own belief by quickly Googling, say, “Cognitive Biases in Sports“, etc., he’d have seen that sports fans (and professionals too) deny all kinds of long-known true facts, and often do so on a very team-partisan and/or issue-tribal basis.
Methinks the problem here is that economists grossly undervalue one of their own best insights: rational ignorance. Yes, many people think the corporate profit rate is 40%, inflation is 20% and we’re in a recession, and always do, I’ve seen such numbers all my life. But it’s not just econ (or politics), it’s universal: sports fans, college students (!) being asked what’s bigger, a moon or star or galaxy?, or how many states are there? (How many World Wars have their been? etc. etc.) Now think how many issues are really much more immediately important that millions are truly ignorant about: vaccines for their kids and themselves, investing, their own tax returns, their kids’ schools, the names of their elected representatives from town council on up … I could make a list down the page.
Add all these things up, it’s not only irrational but impossible for people to be really informed, or trouble to find out, about more than a tiny bit. So we “satisfice” by learning what we need to know to get through our jobs and daily lives, and for the rest we use shortcuts like going along with our friends, or whatever makes us feel good about ourselves, or believing our own lying eyes (“clutch play”) — and politically, joining our favorite tribes just the same way. (On the list of “the rest”, hard sports realities and tax incidence are way down at the list bottom for near all.)
As Kahneman said (my emphasis): “Everybody is ignorant about near everything, but we all have opinions about everything. That’s not the problem — the problem is we fight about them”. (He also says we smartest and best educated are the worst offenders, for obvious reasons.) Yet as ignorant as we are, everybody hates being shown up as wrong, having our values debunked, so when our beliefs are challenged we fight — via emotionally motivated reasoning, armed by confirmation bias. Often tribally.
It’s the entirely rational thing to expect, if one takes “rational ignorance” seriously, and accepts that everybody really is massively ignorant, across the board.
“Our comforting conviction that the world makes sense rests on a secure foundation: our almost unlimited ability to ignore our ignorance.” ― Daniel Kahneman
“Democracy is the second-worst form of government.” — Plato.
MarkW
Feb 15 2024 at 5:38am
People discovering the actual numbers for profit margins and taxes paid by rich people have no effect on the most people because their political beliefs don’t derive from numbers (accurate or erroneous). They really don’t have any good idea of how businesses work or even tax brackets. Their initial estimates of profit margins and taxes derive from (and express) their general disdain of rich people and big corporations. They see how rich people and corporate titans behave (mostly on TV shows) and conclude that it’s not fair and that they don’t deserve having so much more luxury than people like themselves and that the government should do something to reduce the inequities. They may then go on to bolster these positions with some factiods (‘Did you know Warren Buffet’s secretary pays more taxes than he did! And Amazon doesn’t pay ANY taxes!’), but those factoids can always be replaced, as necessary, with fresh ones. Having them debunked won’t change their views.
Rex Hughes
Feb 18 2024 at 10:06pm
What I often hear is either:
“I can’t recall the supporting facts but they’re there — I wouldn’t make that kind of thing up,” or
“You read more than I do, so you have more information for making your case; if I read as much as you do, I would have as much information for making my case.”
The first I find very suspicious while the second seems to me yet another version of “your truth v. my truth.”
Mr. Econotarian
Feb 20 2024 at 4:29pm
Imagine what happens when I tell people there is no legal path to immigration for most Latin Americans without immediate family legally living in the US. There is no “line to wait in”.
john hare
Feb 20 2024 at 6:38pm
I don’t have to imagine as i deal with it all the time. Most of the Hispanics I know, including my wife, came here illegally as there wasn’t a known method for them to get here legally. I constantly hear people say (I’m Caucasian) that they only want people that come here legally. They don’t want to hear it to the point of denying the problem exists. A lot of manual labor wouldn’t get done without them. Construction, agriculture, housekeeping, and likely many things I am unaware of depend on the foreign labor..
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