Our weekly explainer on economics using lessons from popular culture. In Installment 9, Ajit commits the Fallacy of Composition.
“Raabert, is haraami ko Liquid Oxygen mein daal do. Liquid ise jeene nahin dega; Oxygen ise marne nahin dega!” — Ajit.
In my favourite Ajit dialogue of all time, Ajit instructs his henchman Raabert to put an unnamed scoundrel in Liquid Oxygen. “The Liquid won’t let him live; the Oxygen won’t let him die.” You’ll never guess what happened next, mainly because nothing happened next: this interaction did not take place in a movie, but was made up by some genius as a standalone joke. (Most Ajit dialogues are apocryphal, so don’t don’t try searching for them on YouTube.) This is a perfect example, though, of what economists call the Fallacy of Composition.
A is part of B.
A has property X.
Therefore, B has property X.
Some typical examples: If one person at a cricket match can see better if he stands up, everyone will see better if they all stand up. Your brain consists of molecules, and because a molecule does not have consciousness, the brain can’t be responsible for consciousness. Sodium and Chlorine can both kill you, so salt is poison.
The Condorcet Paradox is an example of this fallacy from voting theory, and the Paradox of Thrift is an example from economics. Another example came to my mind recently when some friends of mine estimated the amount of money that would be raised if all unused property owned by the government of India was sold. One can arrive at this figure by estimating the market value of the land, but there is one issue here. While selling one government property would fetch the current market price, selling all of them at the same time would not, because the market price would crash due to the huge increase in supply. (That said, real estate prices work in strange ways; listen to this.)
Economists are not concerned with just economics, of course. This is the stuff of life, and we all commit the Fallacy of Composition at some time or the other. We commit it in the ways we think about religious communities and ethnic groups. We commit it when we rush to judgement about other people. (If you think vegetarianism is a virtue, is that a reason to admire Hitler, who was vegetarian?) Government commit it when they ban entire domains because they find one particular page objectionable. Journalists commit it when they go to celebrities for quotes in a field in which they have no expertise. And so on.
It is true that the world is complex, and we must use mental shortcuts to simplify it if we are to get by. But we open ourselves up to all kinds of fallacies when we do that. That said, don’t commit the Fallacy of Composition and conclude that just because one mental shortcut can lead you astray, all mental shortcuts are bad.
I wonder sometimes if the Fallacy of Composition pops up in another famous Ajit dialogue. He once famously said, “Saara shahar mujhe Loin ke naam se jaanta hai.” (“This town knows me by the name of Loin.”) It is usually assumed that he meant ‘Lion’ and not ‘Loin’ — but who knows?