Friday, 2 May 2014

Can the Simpsons Really Teach Economics?

Homer Economicus is the title of a new book edited by Professor Joshua Hall of West Virginia University. Its subtitle, 'The Simpsons and Economics', reveals its purpose of teaching lessons in economic science with the help of the hilarious TV family. I haven't read this one yet, but books like it are, in my experience, generally quite nice.

There are several books of its ilk in sociology (e.g. Seinfeld) and philosophy (House M.D.) and probably in other disciplines, too. Now books such as these sometimes give erroneous treatments of episodes, and are sometimes forced to stretch themes of a show to rather a tenuous point in order to be able to talk about their science. But seen as a fun way of reading about the basics of economics, sociology or philosophy, they usually work (I hasten to add that proper textbooks are fun, too!).
The Simpsons is a show profoundly deficient in economics, however. The authors of Homer Economicus surely had their work cut out for them to try to make sense of very many bits. I hope the book will not create the impression that the Simpsons is a good show for learning economics but rather that viewers, having read the book, will be more wary of the many mistakes that the show contains. A few examples of poor economics in the Simpsons:
In the third-season episode 'When Flanders Failed', the family's God-fearing neighbour decides to open a shop selling only left-handed products. Ned Flanders calls it the Leftorium and it has a hard time trying to take off. Homer thinks its failure is his fault due to some silly but very funny superstition and, in a fit of bad conscience, eventually calls everyone he knows to tell them to go to Flanders' Leftorium. So in the end, Flanders succeeds. The problem is that consumers are not so fickle (at least not in economics) that, having shunned a shop completely, they suddenly flock there when told to by a buffoon. So how is this an economics lesson? Maybe it is about the importance of informing consumers of one's existence, but that is a cheap lesson. Perhaps Flanders is too unassuming to advertise his business, but the main impression from this episode is that consumers have so little backbone that the decisiveness of even a deeply stupid man (Homer) can sway them to the extent that a business in dire straits can blossom. Funny episode, but not a good economics lesson.
Elsewhere in the third season ('Burns Verkaufen Der Kraftwerk'), Mr. Burns sells his nuclear power plant to a group of German investors for $100,000,000. It soon becomes clear that it is not worth anything near that sum. Now some might say this illustrates some lesson in information economics, but who would pay to hire the instructor of that lesson? Everyone already knows that $100,000,000 is a lot of money and that one should closely examine beforehand whatever one intends to purchase with so large a sum. The same may be said for Homer's rarely-seen half-brother Herb Powell betting his fortune on Homer's valorous but idiotic design of Powell Cars' new vehicle, in the second season's 'Oh Brother Where Art Thou?'.
What else is there? In a paper related to the book, Hall notes the appearance of Peltzman's famous 1975 article on car safety regulation in a second-season tale of how Homer and Marge first met in High School called 'The Way We Was'. Here, Homer joins the High School debating team because Marge is in it, and argues against a 55 mph speed limit on the grounds that, while it will save a few lives, "millions will be late". Peltzman's paper, of course, provides a fascinating case for why Homer's secondary effect may actually outweigh the gain from the first effect (it almost has to at some point), but this lesson is apt to be lost on the viewers, since it is given by America's foremost buffoon Homer Simpson.

Economics is in very large part about individually rational behaviour and the above instances can hardly be called rational. A show like the aforementioned Seinfeld or House M.D. would probably lend itself more naturally to economic analysis. The latter is obviously based on rationality and the former showcases some highly unusual but carefully maximized preferences (Jerry's fear of germs comes to mind). Still, I would expect the amusement I noted of this genre in general, and the talent of the authors, to make Homer Economics a very good read, indeed. I am looking forward to it.

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