My friend (whom I have never met), the economist John Murphy, recently commented on co-blogger Pierre Lemieux: Recent Posts:
If you have two options that take you away from your desired path, choosing the option that takes you a little slower and a little further away isn’t actually going to do you any good.
I challenged John by writing:
Yes, that’s right. Give yourself some time to think about it.
John is very good at thinking about limitations. I thought he would agree. But he didn’t. Instead he wrote:
Yes, David, my point is that both of the options presented would take me further from my goal, so it’s time to either find some space or do nothing.
Commenter Vivian Darkbloom agreed with me on this issue, writing:
Being on the 30 yard line is not the same as being on the 10 yard line.
John replied:
I agree, but if my goal is to get into the end zone, a play that sets me back 40 yards and a play that sets me back 50 yards are both counterproductive.
Yes, both are counterproductive, but in economics we often compare two bad options and choose the lesser of them. Thinking about limits is useful here too: 40 is closer than 50.
Now, if John were arguing that there was no difference between the two options, that would be a good thing, but he made it clear that that is not what he was arguing.
Note: Pierre raised another issue in the comments, and this is a good point he made, but it’s not relevant to my response to Jon.
