Bryan Caplan joined me on the livestream today to discuss my recent article, “Economists Should Do More to Fight Misinformation.” We begin by splitting some hairs about whether the misinformation label misleads us about the ultimate origins of false beliefs, and also the difference between something being emotionally unappealing and intuitively incorrect.
"Yeah, yeah. You know, I do think economics is in a sense a science. Like somebody was saying in my comments, like, oh, it's not a science because like, you know, you could have built more housing, for example, and prices might not go down because of it. Well, it's like gravity. It's like you could throw something in the air and it might not come down because the wind might blow on it or somebody might grab it or something like that. But gravity is still a thing. And I think the laws of supply and demand are similarly a thing. I think it's, you know, as good as we get."
You seem to be referring to me. I was replying to your remark:
"A recent poll showed that only 24% of Americans believed that building more housing in their communities would reduce prices, while 44% thought it would raise them. This is plain flat earthism."
But it isn't at all analogous to flat earthism, or disbelieving the laws of gravity. Sometimes people understand intuitively that housing markets are complicated, and the laws of supply and demand are not easy to apply.
Take Williamsburg, Brooklyn. They've added tens of thousands of new units in one small neighborhood, and prices have gone up astronomically anyway. If it was still filled with nothing but shabby, vinyl-sided three-story rowhouses, would housing prices be lower? I think the answer is clearly yes.
The commodity in this case that is subject to supply and demand in this case is a neighborhood more than it is individual units of housing. It was impossible to add supply without changing the commodity itself, which induced even more demand.
I'm not saying that new housing should not have been built. I think it is good that it was. But people are not wrong to sense that increased supply of housing units led to higher rents in Williamsburg.
"Yeah, yeah. You know, I do think economics is in a sense a science. Like somebody was saying in my comments, like, oh, it's not a science because like, you know, you could have built more housing, for example, and prices might not go down because of it. Well, it's like gravity. It's like you could throw something in the air and it might not come down because the wind might blow on it or somebody might grab it or something like that. But gravity is still a thing. And I think the laws of supply and demand are similarly a thing. I think it's, you know, as good as we get."
You seem to be referring to me. I was replying to your remark:
"A recent poll showed that only 24% of Americans believed that building more housing in their communities would reduce prices, while 44% thought it would raise them. This is plain flat earthism."
But it isn't at all analogous to flat earthism, or disbelieving the laws of gravity. Sometimes people understand intuitively that housing markets are complicated, and the laws of supply and demand are not easy to apply.
Take Williamsburg, Brooklyn. They've added tens of thousands of new units in one small neighborhood, and prices have gone up astronomically anyway. If it was still filled with nothing but shabby, vinyl-sided three-story rowhouses, would housing prices be lower? I think the answer is clearly yes.
The commodity in this case that is subject to supply and demand in this case is a neighborhood more than it is individual units of housing. It was impossible to add supply without changing the commodity itself, which induced even more demand.
I'm not saying that new housing should not have been built. I think it is good that it was. But people are not wrong to sense that increased supply of housing units led to higher rents in Williamsburg.