Lesson 1 of 8
A theory without its critics
What this course is for, the standard it holds itself to, and the four rules that decide whether an objection has been stated fairly or quietly weakened.
By Javier Sanz
Founder of ValueScreener. Built Ninety Nine, a securities services provider, and sold it to a tier-one global bank; ran operations and internationalization at Alpaca, the brokerage API.
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In one minute
- A criticism has been stated fairly when a person who holds it would sign the summary. Anything short of that is a rehearsal, not a course.
- The order matters: the objection first and in full, then the reply, then who is left holding what. Answering as you go lets the reader forget what was asked.
- Where a source could not be obtained, this course names the objection and says the citation is missing, rather than describing a paper nobody here read.
Most presentations of a heterodox theory include a critics section. Most of them are a list of weak versions of real arguments, each followed immediately by a rebuttal. That is the format this course is trying not to be, so it starts by writing down the standard.
Two ways to present an objection
How a defender writes it
- The weakest version of the objection.
- Answered inside the same sentence.
- The critic's own evidence is not shown.
- No mention of what the reply leaves unresolved.
How this course writes it
- The strongest published version, with the author named.
- The reply comes after, separately, and is attributed.
- The critic's numbers and cases are reported.
- Where the reply is partial, the lesson says which part it misses.
The test is whether the critic would sign your summary of the criticism.
Four rules this course follows
First, the objection is stated before any answer. If an objection cannot be stated for a paragraph without a defence attached, the writer does not understand it yet.
Second, the source is named to the chapter or the section, with the year of the edition used. Nothing here is quoted, and no page numbers are invented.
Third, where a paper could not be obtained, the objection is still taught and the lesson says the citation is missing. Two lessons in this course say exactly that, and both say it in their own limits block rather than at the end of the course where nobody would see it.
Fourth, the replies are attributed to the people who made them, and the lesson says what the reply leaves standing. Several of these objections have partial answers. One or two have none that this course could find.
What counts as a criticism worth teaching
Not everything published against a theory is worth a lesson. The filter used here has three parts.
The objection has to bite on something the theory needs, rather than on a popular summary of it. It has to be published somewhere a reader can go and check. And it has to be the kind of claim that could in principle be wrong, which rules out the complaint that a theory is politically inconvenient.
That filter keeps out a large amount of noise in both directions. It also explains why the course spends a whole lesson on the plucking model, which is an argument about the shape of a data series, and no lessons at all on whether the theory is fashionable.
What a reader should be able to do afterwards
Argue the other side. Not caricature it, and not summarise it: state the objection, name who made it, say what evidence was offered, and say what the best reply is and what it does not cover.
A reader who can do that for six objections has something more useful than a verdict. They can tell the difference between a theory that has survived criticism and a theory whose critics were never read.
Check yourself
What is the test of whether an objection has been stated fairly?
- That it is longer than the reply
- That someone who holds the objection would sign the summary of it
- That it appears before the theory is taught
Show the answer
Answer: B.
The rule is about the critic's assent, not about length or placement. A summary the critic would reject is a straw version however carefully it is written.What does this course do when a cited paper could not be obtained?
- Drops the objection
- Teaches the objection and says in that lesson that the citation is missing
- Paraphrases the paper from secondary accounts without saying so
Show the answer
Answer: B.
The reader needs the criticism more than the reference, and the honest way to give one without the other is to say which is missing.Which objection would this course exclude?
- That the mechanism implies an asymmetry the data do not show
- That the theory needs errors to cluster and expectations argue against it
- That the theory is associated with an unpopular political position
Show the answer
Answer: C.
An objection has to bite on something the theory needs and has to be capable of being wrong. Political association is neither.Sources
- Caplan, 'Why I Am Not an Austrian Economist', an essay published on the author's university page at George Mason University, section 3.4, for the distinction between the parts of the cycle theory that are widely accepted and the parts that are contested, which is the model for how this course splits an argument.
- Tullock, 'Why the Austrians Are Wrong About Depressions', Review of Austrian Economics, volume two, 1987, and Salerno's comment in volume three of the same journal, together with Tullock's reply, as a worked example of a published exchange where each side says what the other missed.
What this leaves out
- This is a heterodox tradition. The mainstream account of the same phenomenon differs, and nothing here is a forecast or a view on any security.
- This lesson is about method, not about the cycle. It contains no claim about how an economy works.
- The course covers the objections it could obtain and read. It is not a survey of the literature, and the absence of an objection here is not evidence that none exists.