When Federal Reserve Chief Ben Bernanke appeared on the TV news show 60 Minutes to persuade us to bail out the banking system, he didn't bother with charts, figures or lengthy argument. Instead, he used something far more powerful: Analogy and metaphor.
Imagine, he explained, that you have an irresponsible neighbor who smokes in bed, and sets fire to his house. Should you call the fire department, or should you simply walk away and let him face the consequences of his actions? What if your house -- indeed all the houses in the entire neighborhood -- are also made of wood? We all agree, he argued, that under those circumstances, we should focus on putting out the fire first. Then we can turn to the issues of assigning blame or punishment, re-writing the fire code and putting fail-safes in place.
This was a powerful analogy. It communicated the clear and present danger to the economy and the urgency of implementing his proposed solution. Why did we find this type of argument so persuasive? Because, as cognitive scientists Keith Holyoak and Paul Thagard claim, the "analogical mind is simply the mind of a normal human being." Or as fellow cognitive scientist and Pulitzer Prize winner Douglas Hofstadter put it, analogy is the core of cognition. We can't help noticing that "this is like that," and arguments that exploit this natural tendency tend to hold sway. This article is not about the bailout and its merits or failures. It is about the reasoning that underlay it.
Bernanke's analogy was persuasive -- not because a burning house has anything physically in common with a failing bank -- but because, at a deeper level of analysis, they describe similar relations: A burning house is in danger of physical collapse. A failing bank is in danger of financial collapse. More importantly, both require intervention if the collapse is to be prevented. The next step was then simple: If the two problems are so similar, then the solutions should be similar as well: The solution to the burning house scenario is pouring water onto the fire. So, by analogical transfer, the solution to the failing bank scenario is pouring money into the banking industry. The water stops the fire, and the bailout money stops the asset accounts from losing value.
While debates continue as to whether the bailout was the right thing to do, skeptics were quick to skewer Bernanke's reasoning by making use of analogy and metaphor themselves: While Bernanke argued that "this is like that," critics argued that "this" was a lot more like something else. For example, Michael Hudson of the Centre for Research on Globalization argued that a crucial relational component that, once eliminated, made this argument collapse like a house of cards. The financiers were not our neighbors, he argued. Instead, they were "the castle on the hill, lording it over the town below."
Analogies and metaphors are powerfully persuasive, but they can also be misleading. In courts of law, decisions frequently depend on which analog best matches the undecided case. This is your best strategy for evaluating or responding to arguments based on metaphors or analogies: Generate alternative analogies, and choose the best match.
A previous version of this article originally appeared in Psychology Today on Oct 3, 2013.