Tuesday, May 20, 2008

A fun Causality mistake...

Lew Rockwell writes
A recent study claimed that labor unions increase the productivity of firms. How did the researchers discern this? They found that unionized companies tend to be larger with more overall output than non-unionized companies
Hard to believe the relationship is causal:

In fact, what we have here is a simple mix up of cause and effect. Bigger companies tend to be more likely to attract a kind of unpreventable unionization than smaller ones. The unions target them, with federal aid. It is no more or less complicated than that. It is for the same reason that developed economies have larger welfare states. The parasites prefer bigger hosts, that's all. We would be making a big mistake to assume that the welfare state causes the developed economy. That would be as much a fallacy as to believe that wearing $2,000 suits causes people to become rich.


At 7:24 PM , Blogger James Sposto said...

Dress for the job you want, I always say - and having "rich" accouterments DOES open doors. So I can't agree completely with your last statement.

The rest is AOK.


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