Friday, August 25, 2023

Causality is not always bidirectional

Causality is often not bidirectional. In many cases causality runs in one direction only with changes in A leading to changes in B but not vice versa.  China appears to be a case in point.  It has been generally assumed by economists that democratic free market economies function more efficiently and therefore generate more wealth than centralized command and control economies.  In the 1990s that reasoning was turned on its head and many political scientists assumed that the corollary would also hold; that greater economic prosperity and freer markets would lead to an inevitable transition from a centralized political system to a decentralized democratic one.  The quarter century since that view came to prominence has shown that in China at least, market liberalization and greater personal wealth do not lead to democratic reform.  When relationships are not simple and dyadic (A->B, B->A) but are the product of many different mechanisms one cannot assume causality runs both ways.      

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