Flat Earth Economics

    Say you're trying to navigate around your neighbourhood and you want to keep the total distance travelled to minimum. Let's pretend you're not limited to roads, and can always travel in a straight line to any particular destination. You go 4 km to your first destination, and then turn 90 degrees to your left to go 3 km to the next destination, and then you can go home. By the Pythagorean Theorem, the straight-line distance to get home is the square root of (3 squared + 4 squared), or 5 km.

    That's the correct answer, or close enough for any practical purpose. In reality the world is not a flat surface, but the curvature is so big that for distances of only a few kilometres we can just treat it as flat without any significant error in calculation. Or, to put it another way, the 40,000 km circumference of the Earth is so big compared to 5 km that we might as well treat it as infinite, which is what it would be if the Earth were in fact a truly flat surface.

    Of course, the math breaks down when you start dealing with bigger portions of the whole planet. If you go 10,000 km on a flat surface, turn right and go another 10,000 km, you'll be about 14,000 km from your starting point, but on the Earth you'll still only be 10,000 km away. And if you travel 20,000 km from your starting point, the next step you take, in any direction, will take you closer to your starting point. The farthest you can possibly be from any other point on the planet is 20,000 km. (I am assuming all distances are measured along the surface, rather than taking a shortcut through the mantle...)

    Scale makes a difference. It's fine to approximate small portions of the planet's surface as flat, but it's a mistake to apply those assumptions to the whole. And the same principle applies to economies.

    When I sit down to balance my household budget, the total number of dollars I have anything to do with is a negligible fraction of all the Canadian dollars circulating around out there. For my purposes, I might as well treat the dollars that aren't mine as infinite in quantity. If I spend $100, it'll take me $100 of income to get back where I started. Simple, straight, flat-plane geometry. 

    And that's more or less true for most businesses and even local municipal governments or individual government agencies. If you spend X dollars, you generally need at least X dollars in revenue to cover it. 

    But that's when the dollars you have anything to do with are a negligible fraction of the sea of dollars sloshing around out there. At the level of a national government with a sovereign currency, that's no longer the case. The federal government of Canada has something to do with literally every Canadian dollar in circulation anywhere, because every Canadian dollar is a creation of the Bank of Canada. To continue with our analogy, the Canadian government operates at a scale that encompasses the entire globe of the Canadian economy. 

    There's a lot more to this than I've described here, and I don't mean to suggest that national governments are completely immune to the sorts of considerations that apply to private individuals and corporations. Nor am I making specific claims here about the mathematics of government debt and deficits and how much spending and taxation is appropriate. All I'm saying at this point, in this post, is that the common rhetoric about government spending is based on an inappropriate comparison. Yes, it's completely reasonable to worry about revenue and expenditures at the scale of the individual household or business, just as it's completely reasonable to use Pythagorean calculations while navigating around your neighbourhood. It's just that the math is different when you get to global scales; you have to take into account curvature if you don't want to get lost.

Rhetorical Heavy Lifting

      I get into a fair number of arguments, and I daresay I'm reasonably good at it. I tend to "win" more often than I lose, if you define it in terms of persuading people that you're more likely to be right. (I actually think it's counterproductive to think of argument that way, as I elaborate on here.) I prefer to think of it as a process leading to greater understanding of the issue by all parties, a discussion rather than a debate, but there is usually some adversarial element, and I can usually hold my own pretty well when that's the case.

    So one thing that sometimes happens when I appear to be "winning" a debate is this: my opponent expresses some frustration that I'm only winning because I happen to be skilled at rhetoric, and if only they were better able to express their ideas more clearly, they'd be able to convince me. And that's certainly a possibility; there are many subtle concepts that are very difficult to express clearly but which turn out to be true (or at least, to have great explanatory/predictive power). But often difficulty in communicating an idea isn't so much due to a lack of rhetorical ability as it is due to the idea itself just not being as well-formed and coherent as it feels. That is, the feeling of being right or of knowing something to be so isn't identical with actually being right. (Like when I dreamed I came up with a mathematical proof of the immortality of the soul.) Goshdarnit, I know I'm right, but I just can't put it into words!

    A metaphor I've found useful for the way debates like that go is that it's like a rock-lifting contest. I choose a rock and you choose a rock, and the winner is the one who can lift their rock the highest. Now, you might think that what you need to win such a contest is to be very strong, but in fact, most often the winner is the person who is able to choose the lightest rock. 

    Now, skill at rhetoric is like being very strong in that it allows you to lift bigger argumentative rocks higher than you would otherwise be able to lift them. But the bigger impact is that it makes you a better judge of the weight of rocks. So much of the time, when someone tells me they'd be winning this argument if only they were better at rhetoric, I want to say hey, don't feel bad. I couldn't lift that rock, either.

    And to do that, I have to make a good faith effort to try to lift their rock.