- The error of assuming that what is true of a member of a group is true for the group as a whole.
This is close to the Wikipedia example: A sports fan at some crowded stadium is sitting way at the back.
So sometimes he stands up to get a better view.
Of course if everyone stood up, no one would get a better view.
- Another slightly different fallacy of composition involves : Assuming that parts or members of a whole will have the same properties as the whole. This leads to wrong conclusions;
What is true of the different parts is not necessarily true of the whole. - Inferring that something is true of the whole from the fact that it is true of some part of the whole. This is the opposite of the fallacy of division. [... reasoning that draws a conclusion by parting an inseparably unified total.]
Sense & Nonsense
Fallacies of Composition/Combination
This is actually a category of closely related misunderstandings and fallacies which permeate a lot of out social, political and economic discussions and disputes quite widely. It often does this without notice because the difference might be inconsequential. But sometimes the confusion makes a profound difference to the argument and its conclusions. These fallacies come about when groups or collectives are treated jointly as if they were nothing more than a number of individuals. There are a wide range of terms, often with subtle differences, with a specific fallacy, leading to a single false conclusion.
More correctly, this is a category of closely related (and often unrecognised) errors of thinking. They all share an often unnoticed confusion between single instances of an individual nature and those of multiple combinations or groups as a distinct entity.. These fallacies mislead us in a many discussions of economics, and also in wider social and political issues.
Wikipedia has recently upgraded its entry for the Fallacy of Composition. It's well worth a read; but it may result in greater confusion.
The problem here is that often some of these misinterpretations are so inconsequential that the Fallacy slides in under our radar. We don't get the feed-back from serious misinterpretations.
Both the fallacy of division and the fallacy of composition were addressed by Aristotle in Sophistical Refutations. In Roman Times it was assumed that the atoms constituting a substance must themselves have the salient observed properties of that substance. So atoms of water would be wet, atoms of iron would be hard, atoms of wool would be soft, etc.
Definitions
Here are a couple of definitions:
The 'Fallacy' is actually a group of closely related fallacies which all concentrate on explaining why the "particular" case of an individual often gets misconstrued when extended to the "general" case of a "mob", or even of "a nation". Fallacies in thinking are not often talked about in Economic circles, but I think the lack of specificity in discussing these, when related to some fundamentals, are a major source of confusion.
Just to give you a brief taste of the Fallacy of Composition ... the stress is on the fact that the characteristics of the composite is quite different to that of its component individuals:
|
The Bee Hive
Consider the case of bees in your garden, and their bee-hive. We tend to think of the bee-hive as just a conglomeration of a few thousand worker bees, with some specialists including the Queen. The individual workers go off daily to collect the nectar.
From our viewpoint, the hive is just a repository for the honey and an overnight home for the bees. But from an evolutionary point of view, the worker-bee and the hive are quite distinct organisms. They may be inter-related, but the worker can't reproduce ... and so evolutionary selection can't involve the worker bee as an individual. However within the hive, the composite made up of thousands (but with the just one Queen) is a gigantic "bee-generation and nursery machine". The key point: The hive is effectively a natural organism in is own right ... and it is here that Darwinian 'natural selection by survival' must operate. The "bee-isness" of the hive is not just a thousand times the "bee-isness" of each individual worker. It doesn't just differ in amount ... but in function (in its 'role'). |
None of the above give more than a flavour of the real problem in economics.
The Economic Problem
We are use to handling money, and know that it provides us with a mechanism for exchange in the purchase of goods and services. So we assume that governments also will need money in order to build roads, pay pensions, arm the defence forces, etc.
But this is not true ... in the same way as we appreciate that money is essential for our own personal purchases.
Ponzi Schemes and Bit Coin
For instance, a Ponzi scheme works this way: the entrepreneur offers a few potential investors some extraordinary high return for making a short term (say two week) investment in his scheme. Two weeks later he pays all the investors at least what they hoped for. Then he invites them to reinvest in another short-term get-rich-quick investment. Most people will put their winnings back, and tell many of their friends that they should get in on the act. So now the entrepreneur has new investments to pay the bonanza returns if he needs to; generally he doesn't ... everyone reinvests,
A week or two later the entrepreneurs is able to pay all his investors their expected bonanza, and there is yet another opportunity to invest. It is repeated like this with the early 'investors' always seeming to be getting extraordinarily good returns on their money, usually in a very short time period. It only takes a couple of cycles, with more and more people getting drawn in (very few drop out) ... until the big crash and the entrepreneur has disappeared with a few million dollars.
Such schemes are able to develop a following of get-rich-quick 'investors' because the individuals involved only ever see a single aspect of the operation.
Meanwhile the Ponzi entrepreneur is looking at the long-term benefits from having multiple suckers, initially acting as free promoters, and then being caught on the hook by their greed. The fallacy arises because individual losses are usually only ever know to the immediate family. However dramatic profits are celebrated widely among a wide community of acquaintances ... which creates a feed-back amplification circuit where more and more people are persuaded by their friends to get in on the act. The individuals all feel that the collective has the same risks and consequences as themselves ... until the whole collectively suddenly collapses.
Subjective -- Objective
These are often even more insidious examples which are very difficult to identify. When we say we have examined something from a "subjective" position (we mean, without stating the fact) that we have assumed the viewpoint of an individual. Then when we claim to have taken an "objective" viewpoint, we imply that we have looked at the wider societal phenomena from a distance in ab all encompassing way.
The terms appear to be just distinguishing the distance of the two viewpoint, but underneath there is the assumption that the subjective deals specific at the individual level, while the objective is examining the subject with an 'all encompassing' collectivist analysis applying to the class or category as a whole.