In defence of endogenous growth theory


Much jargon is designed to conceal vacuity of thought. But technical terms have their place.

Professor Richard Gregory, FRS, is an angry man. He has recently been awarded a golden bull for gobbledegook by the Plain English Campaign. What Professor Gregory (or actually one of his contributors) wrote, in the Oxford Companion to the Mind, was that ‘novel peptides from the brain with actions related to functions such as pain, analgesia, sleep etc. are being discovered at an increasing rate’ and he went on to explain that the importance of peptides in brain function was based on the ability to relay messages selectively. Got that?

Professor Gregory has a point. There is an important distinction to be drawn between jargon which is a shorthand which professionals use to communicate with each other, and jargon which charlatans use to disguise the vacuity of what they are saying from the wider public. Unfortunately, Professor Gregory immediately shot himself in the foot by explaining that such statements were necessary ‘for the purposes of interfacing with the wider literature’ I think what he meant was that they would help you read other books.

Every serious subject has its jargon. Economists need to know about heteroscedasticity. I take this example because it is virtually impossible to pronounce, and impossible to use the word in front of a class without everyone bursting out into laughter. Indeed, most spell-check programmes reject it, and offer improbable or embarrassing alternatives.

Yet heteroscedasticity is an important concept. When we measure things, we make mistakes. A measurement process is heteroscedastic when the mistakes are related to the size of the thing you measure. When you try to measure a distance by eye, the process you use is heterosedastic. A metre is a big error if you are estimating the size of your living room for the carpet fitter, but if you were only a metre out in guessing the length of your street, you would think you had done pretty well. But measuring with a rod is probably homocedastic. Your measurements will still be slightly inaccurate but the inaccuracy will not be much larger in judging large distances than small. That is why it makes sense to judge small distances for yourself but to rely on the Ordnance Survey if you want to know the length of the journey from London to Birmingham.

So when economists use data, it is often important to know whether or not the process by which they were complied is heteroscedastic. This term has the characteristics of necessary jargon. Economists, who are in the business of collecting unreliable data, need to worry about whether their sources are heteroscedastic: most ordinary people do not. And the term heteroscedasticity, although unfortunate, conveys an immediate meaning to those who have been educated in econometrics more concisely than the elaborate, but still imperfect, explanation I have given above.

People who disparage this sort of jargon simply betray their own ignorance, and it is sad that the Plain English Campaign, which serves a good cause, has fallen into this trap. They display the philistinism of those who think that what they do not understand is not worth knowing. When critics laughed at Gordon Brown for talking about endogenous neo-classical growth theory, the laugh was on them. Endogenous means, roughly, that growth was generated by internal rather than external factors: neo-classical, roughly, that the use of resources corresponded to what would have happened in competitive markets. It really is quite important to know the extent to which the growth of the Asian tiger economies was or was not explained by endogenous neo-classical growth theory, and an answer might well help one understand what is likely to happen in these economies now. While one would probably not want to use this language when delivering an inspirational message to a constituency Labour party, we ought to be glad that we have a Chancellor who understands these terms instead of one who finds matchsticks a useful way of keeping accounts.

The problem is that because all sciences and professions have their own jargon, for good reasons, people are inclined to think that they can create a science by inventing jargon. Much bad sociology or philosophy has this character; those who write it think that by inventing new terms to describe old concepts, or simply by inventing new terms, they add to the profundity, rather than simply the obscurity, of what they write. Useful jargon is shorthand shared among professionals. It is the immediate clarity of meaning to other insiders which legitimises the use of heteroscedastic or endogenous, hypertension or contingent liability, neutrino or ex parte injunction. It doesn’t matter that most people don’t understand these terms. All of them have precise meanings which are familiar to those with appropriate training.

There is an obvious difference between these phrases and terms like shoddipush or horse blanket – to take two prize examples from the FT’s business jargon competition – whose meaning is known only to those who have just made them up, and not necessarily to them. Even more preposterous is the attempt by some consultants to claim copyright for their manufactured terminology. Since the law refuses to allow copyright in an idea, if there was anything worthwhile in their analysis others can pinch it with impunity: the only thing these people can protect is their verbiage.

At best, this spurious jargon leads to the convoluted expression of ideas which could be simply conveyed in everyday language – as in “interfacing with the wider literature.” At worst, it conceals an essential confusion or vacuity of thought. But, in seeing through this kind of pretension, we should not forget that jargon sometimes has its place.

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