Posted by: erichosemann | September 18, 2009

Ceteris Paribus is Universal

I’m taking a principles of microeconomics class at the local community college, and a few classes ago we learned about the law of demand:

“Quantity demanded is inversely proportional to price, ceteris paribus.”

Ceteris paribus means, according to the concise OED, “other things being equal.”

So the law of demand really states that quantity demanded is inversely proportional to price, if every other factor that could be related–even remotely–to price and quantity is held constant.  Ceteris paribus is like epistemic insurance; in two words it says:  All I want to do is make a statement about two things I know about, like price and quantity, and that statement is conditional upon every other factor I know of, and even every factor I don’t know of, staying the same; so if you want to argue, don’t get fancy and clutter up my statement by dragging in factors that might be important at some point but don’t help me now.  Donald Rumsfeld might have saved some time and confusion, and spooked the press corps, by invoking ceteris paribus in his “known unknowns” monologue.

Ceteris paribus is quite useful.  It separates the wheat from the chaff; it knocks the weeds down and clears the path for you so you don’t get confused.  Ceteris paribus helps progress by allowing us to focus on two variables at a time, even though progress in describing real-world relationships almost certainly means relying on it again and again.

Ceteris paribus might sound like a fancy term, but it is implied in almost every statement made by every person.  Farmers have a built in ceteris paribus organ somewhere in their brains.  Sure–they”ll be making hay tomorrow, if they don’t get sick, if it doesn’t rain, if the barn doesn’t burn down, if the tractor fires up, if Curly returns the haybine in one piece, if the cows don’t push down the fence in the back pasture, etc., etc. Productive farmers are good at separating the variables most likely to affect their work from those least likely to do so.  But there are always plenty of them there.

Works of fiction ignore or deny outright the necessity of ceteris paribus.  I would even go as far as saying ignorance of ceteris paribus is the bread and butter of any kind of fiction, period.  Imagine the length of your favorite novel if its author had to parse out every little variable necessary to build his imaginary world, and every statement describing that world was followed by “As long as all other things are equal.”

The media are largely uninterested in ceteris paribus.  They build stories with winners and losers, and where neither winner nor loser be, they stitch them up out of whole cloth, snubbing ceteris paribus and warming our hearts, pulling our heart strings and jerking our tears all at the same time.

All advertising statements are made with a wink and a nod to ceteris paribus, with fingers crossed behind the back.  How well would Oxy-Clean work if you used marsh water to launder your whites?  Just how good are those masceras that add “25%” more length to your eyelashes?  In a rainstorm?  How would that play out?   Sure, Lunchables are good, but will your kid’s IQ and GI tract suffer if he eats Lunchables three times a day, everyday?  Yes, Coke Zero tastes just like real Coke, as long as there aren’t any cigarette butts in it.  How would anything get sold if ceteris paribus were invoked on every label?

Consumer safety campaigns are efforts to do just that, to make ceteris paribus work harder than it can.  If you drive a certain way, you will keep your SUV from tipping over.  But what about in an earthquake?  Or during a flood?  Or while evading penguins?  We shouldn’t eat so many trans fats, but what if we give up trans fat heavy foods and eat licorice all day?  Quit smoking and you’ll live longer, as long as you don’t take up skydiving and photographing great white sharks.  In their native habitats.  Surrounded by chum.  Mastery of what variables will keep us safe?

Politics and ceteris paribus do not mix.   Every politician wrestles with fear of and hatred for ceteris paribus.  When faced with ceteris paribus they turn into a cross between a simpering Pee Wee Herman and an impotent Incredible Hulk.  There is no other concept on earth more dangerous to political aspirations than  ceteris paribus.  When invoked it burns away illusions.  Dreams of urban renewal crumble; tax revenue from massive sports arenas dries up; green economies wilt, wither and rot; housing bubbles burst.

Ceteris paribus is everywhere.  It is a faithful helpmate to some and a hound of hell to others.  It helps those who wish to understand the things they know and seek out the things they don’t know.  It even helps those who don’t know it on a first name basis.  Decisions are made, conclusions are drawn, however tentatively, with the caveat that all other things are indeed equal.  Progress happens and the store of knowledge gradually increases.

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