Thursday, February 13

A reminder that we're not omniscient

Austan Goolsbee's article today for the New York Times up-ends the widely accepted explanation as to why so many malls in the USA are closing for lack of business. His analysis, titled Never Mind the Internet. Here's What's Killing Malls, is absolutely stunning, the more so because it's not grounded in math or arcane economic theories. It relies on common sense and close study of factors other than e-commerce that got short attention for years because 'everyone,' including this writer, had accepted the explanation that e-commerce was chiefly responsible for the large number of mall retailers going out of business.

His analysis is also a humbling lesson. Omniscience is not given to humans, but we constantly overlook this in our determination to identify a new situation as quickly as we can.

Goolsbee is a professor of economics at the University of Chicago’s Booth School of Business, so I think this is an instance where an economist is really earning his salary. 


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