Noah Smith on phlogistonomics:
This clearly illustrates the perils of engaging in what I like to call “phlogistonomics” (a term coined by Matt Yglesias). The method goes like this:
Step 1: Take some hard-to-understand phenomenon, like economic growth. Explain the parts you can explain with standard economics (capital, labor, prices, etc.). What’s left – the part that really drives the model – is the phlogiston.
Step 2: Label the phlogiston. Make sure you choose a name that refers to something people in general already believe in. “Culture” is great. “Confidence” works too, as do “institutions”, “technology”, “power”,”the true desires of the Fed”, and of course, “irrational expectations” (the favorite of us behavioral finance types, hehe).
Step 3: Act like you know exactly how the phlogiston behaves. Predict its effects based on commonly held national/ethnic/gender stereotypes (“Greece is in trouble because Greeks are lazy!”), or your political beliefs (“Obama the Kenyan Muslim socialist is killing business confidence!”), or any plausible-sounding story that plays to popular prejudices, preconceptions, fears, or hopes.
You really should read this whole post; at the very least, so you can avoid making phlogistonomic-based arguments. Specifically so you can avoid making a similarly poor “culture”-based argument on China as David Altman did.
However, should you find yourself in a situation where you must make a phlogistonomic argument, please, please make sure its a correct one.