Hedgehogs thrive in New Zealand, more so than in Eurasia where they come from. Any foxes are in zoos.

The archaic Greek poet Archilochus (680-645BCE?) wrote ‘a fox knows many things, but a hedgehog knows one important thing’ which is, presumably, why they survive.

In 1953 the Oxford philosopher Isaiah Berlin used the insight to divide writers and thinkers into two categories: hedgehogs, who view the world through the lens of a single defining idea, and foxes for whom the world cannot be boiled down to a single idea. (Berlin was a fox.)

Suppose you are a journalist wanting an expert on a particular topic. You will choose a hedgehog. You know where he or she is coming from and the presentation to your audience will be straight forward without any ifs or buts or real surprises. Many of the audience will like the expert; others will hate what he or she has to say. But they will know exactly where the expert stands – on the one big thing which the hedgehog knows.

Choosing a fox will result in an interchange in which the complexities and caveats of the topic are exposed. The journalist will not be quite sure what is going on and neither will the audience. All of them will dislike the expert because they want simple answers to the (presumably important and assuredly complicated) topic.

The issue is particularly acute in economics. Sure, public comment is littered with hedgehogs. But economics is really a subject for foxes.

I recall a conversation with a Minister of Health during the health system redisorganisation of the early 1990s. I remarked that competition does not always generate efficiency gains. Any fox-economist knows the caveats. They often apply particularly for health care. (Note how there are two caveats in the previous sentence.) The minister – remember he was in charge of  changing  the health system and was presumably being briefed (apparently by hedgehogs) – stopped in his tracks, his mouth fell open, his eyes expressed disbelief, and rather than questioning the assertion he moved on.

If we are trying to understand what is going on and what will go on in the economy is it better to listen to foxes or hedgehogs? I know of no empirical work that tells you (botheration, another caveat), although there is plenty of anecdote to show that, say, the fox-economists got the run-up to the Global Financial Crisis broadly correct, even if they did not get the exact timing right.

But there is a hint from a fascinating study by American psychologist Philip Tetlock, who monitored 284 experts in political studies for twenty years on ten separate issues. That gave 28,000 predictions on such things as the future of the Soviet Union, the war in Iraq, what was happening to established political parties and whether nation-states would disintegrate. Dividing the experts into foxes and hedgehogs, Tetlock found that the foxes had superior prediction records. (Of course the hedgehogs had some successful predictions: even a bad dart player will hit the board on occasions.)

Is this true among economists? We do not have similar research so we cannot be sure. But it seems likely. There is quite a lot of psychological evidence about how people – even experts – can lock onto one fact and ignore any others which contradict their one big idea. You will recall that having failed to monitor or predict the GFC, the hedgehogs responded to the call of journalists to explain exactly what happened. Foxes remain puzzled about some aspects of it, especially which of the multitude of channels was critical.

Paul Samuelson, one of the great fox-economists of the twentieth century, reminds us that hedgehogs predicted eleven of the last seven downturns.

Hedgehogs thrive in New Zealand; there aren’t many foxes.

 

This column expresses no view on whether hedgehogs should be eradicated as a part of New Zealand’s pest-free program.

 

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