As always, Monday mornings with Stephen Hall. Thank you Stephen.
Pronounced (kā-tər-əs-ˈpa-rə-bəs), “if all other relevant things, factors, or elements remain unaltered”, or better “all else being equal”. It is the same word “cetera” which makes its way into the language more commonly in the phrase “et cetera”, abbreviated “etc.” or “&”, or literally “and else”.
It is a phrase used pervasively in the field of economics as a means of examining the effects of certain proposed changes. The idea being that if you can change one, and only one, thing, then all of the effects you observe will be assignable to that one variable you changed.
In their mathematical formula, through calculus using differentiation and integration, economists examine minutia and instantaneous rates of change around the market price of one or more commodities and holding all else equal theorize about the relationships of various factors.
To gain a little perspective, as we are talking about economics, I had occasion in a graduate school marketing project to sample the prices around town of a simple commodity, in this case razor blades.
The price, or market price, we are told it where the supply curve intersects with the demand curve.
But there is no market price of razor blades. Rather what we call a “price” on a single commodity, in one town, at one moment is time, is really twenty different prices slightly varying across a range. Single points such as a price are at best a weighted average of the data distribution at but an instant in time.
So the notion of a curve or function which consists of various points of the dependent variable as you change or vary the independent variable only really works if you have actual discrete variables and not the fuzzy, nebulous approximate averages which really exist.
So, how does one calculate how an economic formula reacts to an instant change over differentiation when the formula itself is but an approximation of reactions along points which themselves are approximations of a fixed quantity?
All of this is not to say the economic formula are meaningless, but that the formulas themselves are merely illustrations of ideas, and to place too great a strain on the precision of an illustration is an exercise in hubris and ultimately futile.
How does this relate to our normal political discourse, I hear you ask? Don’t pretend that you weren’t thinking it. It is through the concept of ceteris peribus, as it is so very often abused when discussing not only economic but political issues.
American socialists will often point to European nations as examples to be followed in pushing for greater government involvement and control of the economy such as “universal” or “single payer” health care, or some other euphemism for government or public nationalization of the health industry.
But, one question should immediately come to mind when any such example is presented, and that of ceteris paribus, or just how much of those societies are similar that such a comparison could begin to be viewed as appropriate or meaningful.
Health care outcomes are usually measured in terms of life expectancies. Traditionally nordic societies like Norway, Sweden, and Denmark are overwhelmingly white nations, whereas America, while being predominantly white has from its inception been about one eighth black.
The life expectancies of black people and white people are different due to patterns of health often related to genetic factors such as predispositions to high blood pressure and other factors. That is not the only ethnic group in the mix in America, but it does make an excellent example because of its relatively large size of the population and the dramatic differences in the numbers.
The same thing occurs if you were to compare black people in America to various black populations in Africa. The black population in America has a large admixture of European ancestry, even before you start factoring in cultural and technological differences.
So, how can one truly compare the medical outcomes of nations with such variant populations of patients? It fails the economic criteria of ceteris paribus, or in more scientific circles, it lacks a control group.
The same is true when people wish to advocate for the introduction of European style gun control laws in America comparing the gun homicide rates of European countries to America. These variables within a culture or society are not independent as they want to treat them, and such nations are not comparable in such a direct fashion.
Even states and regions in America are not so homogeneous as to allow for strict scientific scrutiny of a single political policy and the effects upon the populous. One of the greatest factors in gun violence is not the presence or absence of guns, but the population density of the city or town in question.
Other factors vary wildly from one city or region to another. It is clear that the leading indicator of poverty is single parenthood, the out of wedlock birth rate. This factor has a cascading effect across many aspect of a society, and is itself impacted by many social, economic, and political factors.
Socialists like Bernie Sanders and his ilk like to cite those nordic countries as examples of their socialist utopian dream societies. Recently, I was told how much more successful such societies were at implementing “universal healthcare” because their wealth and income distributions were more egalitarian than here in America.
So I took a couple minutes on the interwebs to look up their wealth distributions and easily discovered that they pretty much resemble the income and wealth distribution here in America.
Being cited so often as one of the socialist dream states by the Bernie Robots, the Prime Minister of Denmark recently has taken to refuting this slander against their nation. http://www.investors.com/politics/commentary/denmark-tells-bernie-sanders-to-stop-calling-it-socialist/ Denmark remains a capitalist nation, but with a more socialized healthcare system.
So all else being equal, it is virtually impossible to find situations where all things else are even remotely close to equal.
The media and the politicians constantly compare this state to that state, this nation to that nation in an effort to push their political preferences on the basis that their ideas work over there so they will work here.
However, very often those ideas don’t work over there the way that they pretend, and they are only reciting partial data which backs up their claim while omitting data which contradicts it. Or, as is often the case, they are citing a nation which has adopted their preferred policies as an example to be followed even though enough time has not elapsed to even begin to see the full effects of the policy they want.
Societies change slowly. To see the full effect of a single policy change may take decades. Nations don’t merely make a single change then wait decades to see the effects. In effect, there is never a good example of one change or one difference with everything else being held the same.
In real life politics and economics, there is never a ceteris paribus. This is why one should always discuss the principles of any economic or political policy, and never cite this nation or that state as an example. Arguing by example will only work . . . ceteris paribus.
