The importance of context in understanding the accuracy of an argument

An excellent example of how important it is in an argument to both have context and understand the unstated trade-offs.Why has French employment (for some workers) done so well? by Tyler Cowen

Here is the instigating claim from a column by Paul Krugman.

France’s prime-age employment rate overtook America’s early in the Bush administration; at this point the gap in employment rates is bigger than it was in the late 1990s, this time in France’s favor.

Much rides on the chosen measurement - prime-age employment rate. Arguments that ride on narrow definitions are almost always avoid addressing some undesirable trade-off arising from a broader definition which might include total labor force participation rate at all ages.

Cowen has an extensive list of factors which change how one views the validity of Krugman's argument. A few examples from that list.

1. In France the influence of less regulated short-term jobs has been rising in importance. . . . Very few French think their children will be able to enjoy the same standard of living as they have.

2. . . . “The extensive recourse to short term jobs (STJ) is a striking feature of labour markets with stringent employment protection.”

7. The French system has a much poorer record of employment for the young and for the old, so focusing on prime age workers, while valuable, also doesn’t show the whole picture. For instance French seniors participate in the labor force at 42.5% compared to 72.6% for Sweden, a huge gap.

8. French youth unemployment is quite bad, and contrary to what Krugman seems to suggest it is not mainly because the French are all getting so well-educated.

10. The large number of protected jobs in France has come at a significant growth and efficiency cost: “Until the 1990s, France was among Europe’s leading economies in per capita GDP. By 2010, however, the country had dropped to 11th out of the EU-15.”

A simplistic, but not inaccurate, summary of Krugman's real argument is something along the lines of: It is important to have a heavily regulated labor market with significant job protection in order to achieve high rates of prime-age employment. This is worthwhile even though it entails slower economic growth, higher government debt, a less efficient and therefore less competitive economy, higher youth unemployment, higher older worker unemployment and a higher proportion of labor force churn (more short term employment at the expensive of longer term employment).

Krugman may be right that some population of people (presumably prime-age workers) might endorse the trade-off. But likely a significant portion of the population would not.

The important thing is to 1) disambiguate the argument to understand what is being claimed, 2) recognize and acknowledge the trade-offs inherent in any argument, and 3) assess the likely support for an argument based on the real benefits of the argument versus the real costs as perceived by the whole population of affected people.

Krugman's argument also calls attention to the distinction between an argument about fact (is the French prime-age employment rate higher than that of the US) and an argument about relevance (what measurement gives us the best understanding of employment patterns in the two countries?)