Reason and hubris

Some people think they can design outcomes in hyper-complex systems. I suspect their first error is in not realizing the extent of complexity. Not being aware of it, they assume they can manage it.

When have "rocket scientists" ever been humble.

Is there evidence that social engineering works worse than doing nothing?

Isn't the ability to enforce contracts a critical part of wealth creation? Where do you draw the line at stopping social engineerinng? Do you also wish to remove contract enforcement from the social engineer's agenda?

In short, is it also possible to be too humble?

Do you also wish to remove contract enforcement from the social engineer's agenda?

Are you implying that contracts originated from social engineers?

Is there evidence that social engineering works worse than doing nothing?

I've anticipated and replied to that flip-side point here. My argument is analogical and so may not be persuasive as it stands. Nevertheless, I think the point is correct: if you do not understand what you are tinkering with, then you will (on average) do harm.

"But our ability to socially engineer this outcome or that and our ability to anticipate the consequences is pretty lousy. We (social scientists) could use more humility and less hubris."

I just don't see this as true. The countries with the best and most efficient governments have the best and most efficient economies. And more freedom as well. None of the anarchies are doing so well nor the communist regimes. Planning how ever imperfect is the key to personal and societal success. When I play darts the area that is the bullseye is the most likely area for the dart to fall even though it rarely lands there. Trying...planning societies works better then randomness.

I'd argue hubris lies with those convinced they have the answer that doing nothing is better. Where is the evidence for doing nothing as opposed to using a stimulus?

Alot of focus has been put on the actions of FDR's doing little but they compare much more favorably to Hoover who did nothing and saw far worse trends to which FDR was heir of. And if Hoover intervened why was his intervention massively worse then FDR's?

The evidence supports doing something more so then not IMO. And 4-8 years from now we'll have even more data points in support of the same.

Hoover who did nothing

Not true. There has been plenty of discussion about this in recent months, so it would be redundant for me to fill you in here.

planning societies works better then randomness.

The market isn't "randomness". There has been plenty of discussion of this point since before Adam Smith, so it would be redundant to fill you in...

The comment I'm replying to seems to belong in the intellectual environment of Moscow in the 1930s, so I'm wondering if I haven't bit bait left by a troll.

Good thing you are not in a business school and teaching corporate strategy.

The comment I'm replying to seems to belong in the intellectual environment of Moscow in the 1930s, so I'm wondering if I haven't bit bait left by a troll.

Posted by: Constant

Baloney! It's the intellectual environment of the present. There are plenty of experts in economics and some with Nobel prizes as well who support doing something and almost none that are publicly connected to the current administration or the incoming administration who would argue for doing nothing. None of them are communist with 1930's Moscow resumes. That's only you making straw men. The burden of proof is on you dissenters who claim to have the answers to dealing with the economies "unpredictability". NEVER..NEVER do you offer evidence for your positions just statements, hand waving and proclamations that all the rest are supposed to accept as facts and self-evident. Again history will be unkind to YOUR hubris and lack of reason.

The countries with the best and most efficient governments have the best and most efficient economies.

Citation needed. Which countries?

More efficient than...what?

Something that is 10% efficient is obviously better than something that is 5% efficient, but what does that prove?

Russ, you asked:

But how do you keep a faith in \reason from developing into hubris?

Keep reminding everyone of how little we all know. Most importantly - Keep reminding everyone how, when you know little, doing nothing is far more advantageous than doing much.

You and others have done some of this already when you argue that “bold, persistent experimentation” by a central government freezes the plans of private actors. If the market drops and firms fail, entrepreneurs may hesitate engaging in future plans until the dust clears. If the market drops and firms fail and the government makes many varying and unconneced (frenetic?) moves to fix things then entrepreneurs will definitely wait to see how those "fixes" impact them before they act. As this story illustrates, waiting may even impact them positively....so better to wait. This of course makes things collectively worse and more fixes are proposed....and more waiting.

In Jonah Goldbergs recent column he states:

On Sunday night, President-elect Barack Obama told CBS' "60 Minutes" that Franklin D. Roosevelt would be a model of sorts for him. "What you see in FDR that I hope my team can emulate is not always getting it right, but projecting a sense of confidence, and a willingness to try things. And experiment in order to get people working again."

FDR came into office promising “bold, persistent experimentation” — and delivered. Raymond Moley, an early member of FDR’s “brain trust,” saw the New Deal for what it was. “To look upon these programs as the result of a unified plan was to believe that the accumulation of stuffed snakes, baseball pictures, school flags, old tennis shoes, carpenter’s tools, geometry books and chemistry sets in a boy’s bedroom could have been put there by an interior decorator,” Moley wrote later."

What a great mental picture....

Lastly, some great quotes on the need for humility:

"The recognition of the insuperable limits to his knowledge ought indeed to teach the student of society a lesson of humility which should guard him against becoming an accomplice in men's fatal striving to control society."
-- F.A. Hayek

"Now the fact is, of course, that we owe the growth of civilisation, most of our successes, to a very large extent to the institutions and practices and habits which nobody has ever invented and which nobody understands how they work. All our morals, all our conventions, many of our institutions, owe their origin not to design but to a gradual evolution and to the survival of what, since Darwin, we call the more fit against the less fit. These products of a long process of evolution still serve us without our understanding how they function and what we owe to them."
-- F.A. Hayek

"As a circle of light increases, so does the circumference of darkness around it."
-- Albert Einstein

muirge:

The burden of proof is on you dissenters who claim to have the answers to dealing with the economies "unpredictability".


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After the crash of almost all asset markets, you are still denying the existence of "unexpected" events in the economy and our lack of ability to deal with it.

It seems very difficult for you to accept that even the government has only limited knowledge.

Though I am fairly new here, I would humbly present the following points:

"The countries with the best and most efficient governments have the best and most efficient economies."

- I am seriously questioning whether you can demonstrate causality with this, and with a qualifier such as "best"

At the end of the day, it seems to me that if we focus on the role of the market to correctly value "stuff", then we are simply left with the question of how much we wish to pay (in dollar terms, or economic growth terms) to artificially increase the value of the current market. Perhaps this is irrelevant, and I'm open to the reasons why...

"I'd argue hubris lies with those convinced they have the answer that doing nothing is better. Where is the evidence for doing nothing as opposed to using a stimulus?"

- I don't think that that's the argument that's being made. I think that the argument at stake is that the stimulus is a net negative, and shouldn't be done. Using the auto example, you might question whether it's valuable to move money from the economy at large into the automotive companies, and what efficiency you attain in that conversion. At the end of the day, is it better to pay people to make those cars, and then buy the cars, or is it more efficient if we just cut a $50,000 cheque to the workers and let them buy Toyotas? I think those are the questions that everyone's afraid to ask, because the answer might be a tad depressing.

That said, nice post Russ... It would be interesting to see how actions would change if decisions were made based on "knowing what we don't know" versus "knowing what we know"

Muirgeo, you are confusing the many plans made by many individuals with "randomness." Just because there is not some committee of 3-300 guys sitting around planning out how things will work does not mean there will simply be a cosmic roll of the dice to find a solution. The reason the smaller scale, individual plans work better is because, while each individual probably knows less than an individual comittee member, each knows more about their personal situation, and en masse the individuals possess a vast amount more information than the comittee ever could harness.

It is also worth pointing out that the strongest economies have often had governments that did less planning over all compared to their contemporaries. See pre-1990's Hong Kong, for instance. And efficient goverment is better than an inefficient one just as an efficient car is better than a less efficient one. However, when that car is in the process of rolling over you, you probably don't care much one way or the other.

Ok, that muirIDIOT said "Hoover did nothing" is proof enough of his idiocy, ignorance and/or troll-status. Why does anyone respond to it?

It seems very difficult for you to accept that even the government has only limited knowledge.

He does not really care about the knowledge, it's the mystical power of government that can accomplish one's fondest desires.

The range from humble to hubris is huge. Why not settle for approaching social science like scientists? I don't see putting forth hypotheses and evaluating them on their relative merits (evidentiary and otherwise) as an exercise in either humility or hubris. For example, to call the negative relationship between price and quantity purchased the "law" of demand seems entirely acceptable in a scientific sense given the evidentiary basis that exists for it.

The comment I'm replying to seems to belong in the intellectual environment of Moscow in the 1930s, so I'm wondering if I haven't bit bait left by a troll.

Baloney! It's the intellectual environment of the present.

Sadly, both comments are true.

Although, Constant, I'm not sure how much that was the intellectual environment in Moscow of the 1930's versus the intellectual environment in the West regarding Moscow of the 1930's. It's hard to say about Moscow because anyone who disagreed with the state appointed intellectual environment didn't live very long.

"...so I'm wondering if I haven't bit bait left by a troll." - Constant

Oh you're spot on about that, Constant. But don't feel bad. Most of us here have fed that muirdiotic troll more than once. Heck, I just got done feeding him on the "Reliance" thread!

Quote from muirgeo: "NEVER..NEVER do you offer evidence for your positions just statements, hand waving and proclamations that all the rest are supposed to accept as facts and self-evident."

Quote from Crusader: "Ok, that muir***** said "Hoover did nothing" is proof enough of his idiocy, ignorance and/or troll-status. Why does anyone respond to it?"

I think responding with the expectation that you're actually going to convince muirgeo of anything that doesn't fit his faith is a waste of time. However, there might be others that can be convinced of the irrationality of his position. I like to remind myself that "All that is necessary for the triumph of evil is that good men do nothing".

A true process of reason, based on an honest search for and examination of all relevant data will also expose the data which is relevant but unavailable, incomplete, unreliable.

That should not only provide conclusions about courses of action but also conclusions about confidence levels.

In most cases the conclusion will be "don't be so confident, there is as much you don't know as there is that you do".

Hubris in such circumstances is not reason. Being certain when the evidence tells you there is not basis for certainty is by definition irrational, not reasonable.

The arrogance of the idiot savant "rocket scientists" is well illustrated by Krugman's pick for the caption contest winner giving the caption for his picture with the President:

>>“So then I said to Cheney, ‘Duh! Piecewise continuous functions are always Riemann integrable, so just invert the matrix and use a polynomial distributed lag to eliminate the heteroskedasticity!’ What a lightweight!”<<

Get it. The President is stupid, if he weren't stupid -- if he was intelligent like Krugman -- he'd have easy fluency in this specialized branch of math.

The whole self image of economists like Krugman is dependent on the image of themselves as "scientists" and as "smart" -- which derives almost entirely from skill at mathematics, and not from demonstrated understanding of anything else or from any other ability (e.g. such an an ability to predict events or provide advice that isn't repeatedly contradicted by empirical experience.)

Is Krugman even competent when it comes to the history of economic thought, and the theoretical richness of his own discipline? No.

Does this matter to a "rocket scientist"? No.