in any reference book on logical thought and writing, and you'll
usually find a list of logical fallacies -- common mistakes which
should be avoided, if one is attempting to support or refute an
I think I've discovered a logical fallacy that isn't on anybody's
official list. I call it the snapshot fallacy. Take a snapshot,
examine it for things one likes or doesn't like, then draw conclusions
about what should be different to make things better. The fallacy
is this: A snapshot is a poor substitute for a movie. Life, history,
the economy, the ecology, politics, warfare, invention, innovation,
experimentation, and even the weather are much more easily understood
in movies rather than snapshots.
snapshot fallacy can blind us to important cause-effect relationships.
In economics, for example, the process of wealth creation is one
of the most important determinants of economic and social welfare.
But it's a process that, in my experience, is usually missed completely
by those who are committing the snapshot fallacy.
Here's an example.
John Maynard Keynes, the brilliant and famous economist of the
early 1900's, was a demand-sider, whose theory analyzed the demand
for, and supply of, goods and services of his day. One of his
conclusions, still debated vigorously to this day, was this: Demand
is king; demand drives the economy; demand swings cause boom and
bust. A population with sufficient buying power drives the economy
from the demand side, so the objective is to ensure that the population
has a steady, sufficient amount of buying power. If the nation
could control demand swings via government intervention on behalf
of the demand side, the boom/bust cycles could be dampened if
Another of Keynes'
and this could be his biggest mistake) was
this: Demand would eventually be satiated. In other words, consumers
would eventually acquire all they wanted or needed. They'd all
have enough iceboxes, sulfa drugs, cloth diapers, steel roller
skates, Victrolas, Morse-code telegraphs, mechanical adding machines,
Pullman dining cars, fireside chats, macadam roads, M1 rifles,
carburetors, vacuum tubes, outhouses, carbon paper, crank-driven
telephones, Studebakers, Radio Flyers, big band music, ticker-tape
machines, white-wall tires, coal-fired home furnaces, pier-and-beam
houses, newsreels, monocles, filling stations, fountain pens,
tin cans, Sears catalogs, x-ray machines, family-owned grocery
stores, beat-the-heat electric fans, Amos 'n Andy radio shows,
Monopoly board games, lead-pipe plumbing, Baby Ruth candy bars,
daytime baseball games, and coast-to-coast transportation that
only took three days. What more could anybody possibly want or
need? Keynes was concerned about this, and concluded that, after
demand was satiated, government policies of massive income redistribution
would have to be adopted to maintain full employment -- i.e.,
to ensure that the demand side had buying power.
Keynes was wrong, because he committed the snapshot fallacy. That
is what I consider to be Keynes' biggest mistake.
snapshot fallacy misses the important -- possibly all-important
-- dynamics of the supply side. Creative individuals with sufficient
financial power change the way the world works. They direct movies.
Japanese entrepreneur Soichiro Honda said, "We do not make
something because the demand, the market is there. With our technology,
we can create demand, we can create the market." Honda's
phenomenal supply-side success story is now a Legend -- pun intended
-- in the automobile industry.
Moreover, the Honda
success story has to be highly embarrassing for Keynesian demand-siders
such as John Kenneth Galbraith, who chose the same automobile
industry as the paragon of an impenetrable, competition-proof
oligopoly, deserving of government control to protect those of
us on the demand side. Soichiro Honda has demonstrated, not theorized,
the power of the supply side -- the power not only to bust up
oligopolies through higher-quality, lower-priced new products
(thereby protecting consumers), but also to bust up snapshot-fallacy
demand side theories. (By the way: Thanks, but no thanks, Mr.
Galbraith, for the theory that I need to be "protected"
from those "greedy" corporations. I side with Henry
David Thoreau, who said, " If I knew for a certainty that
a man was coming to my house with the conscious design of doing
me good, I should run for my life.")
Change can only be
observed and analyzed over time. Change is a movie, not a snapshot.
Keynes saw the snapshot, but he missed the movie. Too bad; the
economic growth movie is by far the best movie I've ever seen.
(You missed a good one, Keynes. You, too, Galbraith.)
yield a much better understanding of life than snapshots, don't
perpetual error of demand economics [is] the vision of
human beings essentially as mouths, not minds - as 'consumers'
of goods and services, but not producers of them, as users
of jobs but not as creators of new work."
primary economic conflict, I think, is between people
whose interests are with already well-established economic
activities, and those whose interests are with the emergence
of new economic activities. This is a conflict that can
never be put to rest except by economic stagnation."