Two-handed economist: The accidental compliment
As someone with the job title “economist”, a large number of my friends only contact me when they want advice on buying currency or whether to fix their mortgage or buy as asset. After providing my thoughts about why things might happen, and what the risks are, I often get the comment “damned two handed economist, not willing to take a position”.
People think they are insulting me. However, if that is the actual attitude of my friends in this case I’d gladly point out that they are being utter morons. Instead, I take this as a compliment.
If I was going to “take a position”, why would I rattle it off to someone, instead of actually taking on the risk of doing so myself – if I genuinely thought that buying and selling currency offered me a good risk adjusted rate of return at this point in my life, then I’d do that, rather than just suggesting it to people.
When giving advice, I simply want people to be aware of the risk involved in the choices they are making – and the fact that there are reasons why asset prices may move one way or the other (and a good number of unforecastable, or unforeseeable, things that may pop up). To give this advice, I need to to be two-handed. It is my job, as a good friend, to help inform not to tell my mates what to do.
It would be the height of arrogance to pretend that, with my training as an economist, I could instantly turn around and fill the role of a professional risk manager for a certain asset class, or the CEO of a firm for a certain product. Instead, I pull together news, ideas, and a good dollop of statistical analysis to provide information for people that will make decisions – filling a role in the production process, not trying to control it.
So economists, stop being so defensive about being called “two-handed” and stop feeling as if you have to take a specific “position” to have worth. The world is complicated, and your advice (if based on intense questioning and analysis combined with clear communication) is valuable in the way it helps people make choices. Embrace the fact you’re born with two hands and make sure you use both of them!
Attributed to President Harry Truman, the line about ‘bring me a one-handed economist!’
As a journalist who writes about this stuff, I occasionally get the same sort of requests. I take it as an inverse measure of confidence in the economy.
If people are asking a journalist for advice on money, they’ve really lost the plot.
Hehehe. I figure just want someone to blame if their punt doesn’t work out – and are annoyed that economists and journalists aren’t taking responsibility for their choice!
Fair enough as well, what else do we do right 😉
See also the poll reported in today’s press that people want to be forced into KiwiSaver. Is congenital inability to accept responsibility for one’s own decisions recognised in behavioural economics?
Perhaps they want “other people” to be forced as a coordination thing – or because they think other people are stupid. Or perhaps they do want to “commit” to something – that is where having Kiwisaver as opt-out with no subsides would have been a AWESOME natural experiment!
I am not sure how we put “responsibility” or an aversion to it into utility functions – it could well be a driver of framing effects though I guess? Good question 🙂
“I came to you for an answer! All you have done is ask me a bunch of questions!”
That’s right 🙂
Hear, hear. I get the same questions (the latest was whether a friend should invest in silver) and generally provide the same response.
However sometimes after outlining trends, risks, key variables and possible outcomes, I get asked why I may or may not have taken a particular decision in the same circumstances (eg rent vs buy, fix vs float) so it can be necessary to outline potential importance of difference personal circumstances or different appetite for/tolerance to risk.
Agreed – talking about all the risks is a great way of explaining why you made the decision, and also highlighting what you value and care about subjectively.
That is part of what makes economics so much danged fun – the subject doesn’t (or at least shouldn’t) tell you what the answer is, just the process of thinking through it and trying to figure out why. How frikken exciting!