Our nation has a major reading problem. Books in particular seem to have suffered. Even less can I have conversations with people about great literature. I don’t regard myself as among the most literate, to be sure, but even basic talk about the staples of a good education seems ever less possible. This seems to be getting worse in the generation that missed two years of school.
I have an interesting theory as to why. First I need to tell a joke from economics to set the stage.
Two economists are walking along. One says to the other that there is a $20 bill on the sidewalk. The other responds that this is not true. If there were a $20 bill there, someone would have already picked it up.
If you don’t think that’s funny, it’s because you have not been exposed to a high-level theory in economics called Rational Expectations or RatEx. The theory (associated with John Muth, Robert Lucas, and Thomas Sargent) holds that agents form expectations using all available information optimally and do not make systematic (persistent, forecastable) errors. As for economic systems, they root out system-wide error and reveal only persistently rational decision-making.
All prices today are what they are supposed to be based on existing knowledge. Behaviors and institutions are the same. They reflect the balance of interests extending from self-interest. All that is known is embedded already. There are no persistent mistakes at all. All observed change is a result of differences in values, data, resources, or technology.
There is a further implication. There is no real reason for deep investigation or discovery errors or misallocations because the market itself weeds those out. It is not for us to research and know because the market process already researches and knows. Our job is simply to go along.
There are particular applications of RatEx theory, among which is the Efficient Market Hypothesis. This is the claim that there is no way to beat market averages. You might win sometimes with speculation but you will lose an equal amount. Your best strategy is to hold a balanced index of everything to hedge your risk and completely forget about it. In the long run, this is the way to win.
These theories are all derived from what is among the first economic insights of the 18th century, that of observing how the division of labor and specialization work. The worker doesn’t need to know how to make a car. He only needs to know how to turn a screw, weld a piece of metal, or polish a fender. Each person does his thing and is thereby relieved of the burden of knowing the rest.
This observation has practicality in our own lives. We don’t need to know how an iPhone works, much less how to make one. We only need to apply it happily in order to maximize the use of our own particular talents whatever they are. Same with baking bread. No need for those skills. We just hop over to the store.
In this way, the market is truly brilliant. It allows specialization. We can economize on the use of our mental bandwidth and only know what we need to know.
All of this is fine when it comes to technical know-how. I would not know how to wire up a house for electricity or blow glass for a light bulb. I don’t need such knowledge. I can depend on others for that. Nor do I need to know how to raise a cow to get milk. The details of chicken coops are lost on me but I can still get eggs. I’m not a cabinet maker but I still have a house full of great furniture.
But all good theories have their limits. Rational Expectations and the Efficient Market Hypothesis are fine for most things and tasks in life. They are mostly true so far as stuff is concerned. They are far less true—and can even become dangerous—when it comes to literary knowledge and education in general.
My distinct impression is that we have an entire generation that believes that if something is worth knowing, it is already known. We absorb it through osmosis. Our own job is to scroll through social media apps and listen to podcasts. The truth is in the firmament. Someone will find it and it will rise to the top. Then I will know it too, without really trying.
I noticed this with the Fauci Diaries that took me fully a week to read and digest. Indeed, I am going through them again. However, I noticed most reports on them revealed no evidence that the author had spent more than a few minutes with them. Many people were relying on summaries from artificial intelligence or what other people were saying online. They were missing all the good stuff.
This is what we might call Rational Expectations theory of culture. If there is something worth knowing, I would already know it. There is nothing to discover in any literature. It’s like the joke that began this article. If there were a $20 bill on the sidewalk someone would have already picked it up. If there were anything new or interesting in the Fauci Diaries, I would already know it.
There is grave danger here. The thinking is that if Victorian-era Gothic literature had anything to teach us, I would already know it. There is nothing in Dante or Shakespeare that is meaningful or operational that is not already part of the cultural firmament in which I live. I already get the summaries of Jesus’s teachings—I listened to Sunday sermons as a kid—so I don’t need to read the Bible.
And so on it goes. We are so surrounded by examples of the successes of markets and the division of labor that we have been misled to believe that passivity is what serves us best. Just as we are better off not watching the ups and downs of our financial portfolio but rather just the indexes to balance risk, so too we do not need to bother with great literature. We surely have better things to do.
Economic logic works for many things but markets are not a good adjudicator of beauty and truth. Those are left to be discerned by the individual mind, one person at a time. There is no shortcut. No AI summary can do that hard work of deep learning or generating genuine understanding.
There are other reasons people have stopped reading. Sloth figures in here, as does the need for instant gratification (so many other options) and the fear of being alone that comes with true study. There is also the bias against anything old including literature: surely we’ve moved beyond whatever lessons it has to teach.
All that said, I suspect that commercialization and ensuing disempowerment is the real factor here. We walk around assuming that if something is worth knowing, we would already know it. This is particularly true for hot news surrounding something that takes time and work to digest. Why bother when we have information systems that tell us what we need to know?
This is surely a major factor—if not the dominant one—for why people these days lack the drive to read, learn, and do the mental work necessary to understand. We’ve outsourced our understanding to institutions. This is a gigantic error that serves not the cause of truth, nor is this good for our mental and intellectual acuity.
Mankind is blessed with the capacity to reason and hence move beyond instinct as the basis for decision-making. But that capacity has to be deployed and that takes time and work. Markets are wonderful things but we cannot expect them to sort through a thicket of errors to reveal what is true.
Notice that I said the word error, that very thing that RatEx theorists say doesn’t exist. I’m here to proclaim that errors do exist and they are systematic. It’s our job to find them and call them out, contributing to the cultural firmament in whatever way is within our power.
