My Sunday Washington Post Business column is out. This morning, we look at the pernicious staying power of bad ideas.
Here’s an excerpt from the column:
“This time of year is filled with retrospectives and “best of” lists. I’d prefer a more enlightened discussion about bad ideas. Or rather, zombie ideas: the memes, theories and policies that refuse to die, despite their obvious failings.
Why do we embrace the terrible, fall in love with the wrong, bet money on the fictitious? Nowhere is this truer than in the fields of economics and investing. Together they have produced a long list of thoroughly debunked ideas.
Despite this, many of these zombie ideas still have a vice grip on amateurs and professionals alike. What is it about us and this intellectual voodoo? We keep repeating the same mistakes over and over. It is maddening. Let’s count the ways…”
I really like what the Post did in the dead tree version of the paper — the above paragraph is in huge type, with the bad ideas (below) mostly on the left side of the page and the explanations on the opposite other. I’ll see if I can get a good snap of it (the eReader the Post uses produces terrible graphics).
The bad ideas discussed include:
1 Shareholder value
2 Homo economicus
3 Economics as a science
5 Tax cuts pay for themselves (supply-side economics)
6 The efficient-market hypothesis
7 Markets can self-regulate
8 Gurus, shamans and prognosticators
And the general explanations for our all too human failings include:
• Fooled by randomness (a.k.a. luck)
• Greed and sloth
• Institutional mandates
• Status quo
• Narratives persuade more than data
• Darwinism works slowly
Why don’t bad ideas ever die?
Washington Post, December 16 2012