Water over the bridge

I almost entitled this post, “What is with commentary on the back-page of The Age?” I had issues with this last week. Today, Kenneth Davidson writes an article that contains so many inaccuracies that I have no time here to go through them all. His target is Ken Henry’s suggestion of a water market. Basically, he takes issue with Ken Henry’s suggestion that if such a market were put in place, the price would go up and down depending on the balance of demand and supply. Davidson appears to be arguing that in such a market prices will always rise! He then launches into an attack on investments to increase water supply and restrictions on competition when I thought that the whole point of a water market was to put competitive pressure on those investments. I had trouble following the article from that point on.

However, misconceptions about demand and supply are one thing, because, in a parting shot, Davidson then turned his attack towards economics as a whole:

But there are no economic laws in the way that there are laws of physics and chemistry, which are subject to scientific proof because the experiments on which they are based can be replicated. Economics is an art, involving judgement, and it owes more to the techniques of the historian than the mathematician. Because economics looks through time, there are no experiments that can be replicated and no theories capable of being falsified, as is the case of physics and chemistry.

No theories capable of being falsified? How about the one where if we expand supply, prices fall? That’s a theory. And if you don’t want to read the economic journals to find out how those are tested might I suggest a few readily available books by Steve Levitt, Tim Harford and Ian Ayres to get you started on how economic theories can be tested. But I must admit, it will require looking to facts which is sometimes hard for commentators to do.

4 thoughts on “Water over the bridge”

  1. Kenneth Davidson has also been pushing the idea that, rather than building a desalination plant, Victoria should pipe fresh water from Tasmania to address water shortages. He’s a funny dude.

    Generally, the back page of the Age is a toilet. You get Davidson wanting train lines from every suburb to every other suburb. You get Ross Gittins’ latest Google-based tax-and-spend nonsense. And, best of all, you can guarantee that every couple of weeks Martin Feil will write some garbage about ‘industry plans’ for the car industry. The letters are sometimes good, although they are only published once or twice a week. I read it for the same reason I read blogs – because uninformed opinion is funny (present company excluded from that, of course).

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  2. “it will require looking to facts which is sometimes hard for commentators to do” – people who live in glass houses ? You offer an abstract of an article about a plastic bag levy in Ireland as if that provided all the facts anyone would need.
    Maybe you should look for more facts – try the current issue of Australasian Science (article by Simon Grose) and an article by Sarah Wilks in AQ July 2006.

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  3. Russell, I never claimed that it didn’t apply to me. These blog thoughts are thoughts and not research. If I write a paper, it is a different matter. But I did offer the abstract and a link to the article which is available in most University libraries. And there is some legitimate dispute about what it means. My point was that the Irish experiment could inform us. That still stands.

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  4. And right on queue, Martin Feil has an article on the back page of the business section of the Age on industry plans. And the promise that we will get a full series on his enlightening thoughts. Bonus.

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