Why I Love Scott Sumner

I love his long post on my paper. But much more than that, I love that he's willing to write a post denying scientific realism by way of arguing for abolishing the concept of price inflation.

That said, I wish Scott would give up in his Rortyian antirealism, which is false. It may also help to point out that, however entertaining and stimulating Rorty is to read (I am a fan in this regard), he is among the worst possible guides to questions about realism, truth, and knowledge.  As an alternative pragmatism, I would recommend Susan Haack's. I'd espcially recommend to Scott chapter nine of her Evidence and Inquiry, “Vulgar Pragmatism: An Unedifying Prospect,” which gives it to Rorty good and hard. I'd also recommend Michael Devitt's Realism and Truth or his review essay on “Scientific Realism” from the Oxford Handbook of Contemporary Philosophy, embedded below.

That said, I think Scott is largely right that the usefulness of a deflator is a function of what you want to use it for. But it's wrong to say there's no fact of the matter about the average rate of price inflation, though it may be true that is not a very useful fact. I think the fact of “neurodiversity,” as Tyler Cowen calls it in his delightful book, pushes us toward the conclusion that each person faces her own personal rate of inflation. Perhaps increasingly so. One implication is that a single rate calculated on price changes in a single “typical” consumption bundle isn't very informative. This necessarily overlooks the very real distributive consequences of new products or quality improvements which affects some people immensely while affecting others not at all. (For a stark intuition-priming case, think of the value to Alf of a new medical innovation that saves his life but was unavailable a month prior at any pirce. Now think of the value of the same innovation to Betty who suddenly dies when a safe lands on her head.) There are CPI-(U-RS, etc.) “real wages” and then there are really real wages, which rise fastest for people who get the most out of new products and quality improvements, or from new innovations in retail that push down prices (Wal-Mart) or that reduce the costs of matching buyers and sellers in secondary markets (Craiglist's or Ebay). Calculating the average change in really real wages for a group of individuals may be intractable in principle or (as I suspect) it may be a mere technological problem. In any case, the more diverse the preferences and consumption patterns of the group one is averaging over, the less meaningful the application of a single deflator.

I'd like to see more interest in exploring personal inflation rates and individual level changes in really, real wages. It seems to me that a combination of credit and debit cards records together with consumption-focused experience sampling ought to be able to make a good start.

Michael Devitt. Scientific Realism