Product Quality, Invention, Innovation, Economics, and Outsourcing.

  There were a couple of provocative articles in the last issue of The Economist.  The first and lead article is here.  It has to do with the present swell of interest in ideas, creativity, innovation, and such things.  I had  two reactions to it.  First, I certainly agree that such things are essential to us.  But there seems to be a feeling nowadays that lots of ideas are magic that can result in gloriously successful startups that then result in our fantasy of full employment, rapidly growing GDP, etc. etc. etc.  As mathematicians might say, ideas are necessary but not sufficient.  Linus Pauling, my beloved freshman chemistry teacher, used to say that the key to creativity is to have lots of ideas and throw away the bad ones.  When this appears as a quote, somehow the last part of the sentence is often omitted.

 The second gives a bit of insight into our national policy vagueness on manufacturing.   It is here.  It discusses the field of economics, the extent at which economists agree with each other, and the extent that the public agrees with the economists.  It includes the figure shown below.

 Each week since Sept 1911, the University of Chicago has asked a group  of economists associated with leading schools whether they agree or disagree on certain statements.  The figure, taken from an article entitled “Economic Experts vs. Average Americans”, written by Paula Sapienz and Luigi Zingales, also of the University of Chicago, compares these responses with  those of a group of non-economists, who seem to be "comparable" to the economists in most respects.  One might expect the non-economists to have  somewhat similar responses to those of the economists, since we are, after all, intelligent and well informed and the economists are highly trained  professionals in topics having to do with money. The economists generally agree with each other reasonably well, despite their tendency to attack each other in the media.  But the non-economists do not seem to agree with them.

With regard to manufacturing, look at the difference in response to the bottom statement —The “Buy American” policy is good for manufacturing employment”.  A mere ten percent of the economists agree with that.  A resounding 75 percent  of the non-economists do.  The public in a democracy such as ours is assumed to be reasonably intelligent.  So are specialists such as economists.  Does this explain Washington to some extent?  And us?  All of the economists seem to agree that “It is hard to predict stock prices”.  Only half of the non-economists seem to agree. And how about the one on the cost of methods to cut emissions?