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“Possibility” is a very weak standard. To describe something as “possible” is to say little. The reason is that the set of things that are possible is surprisingly vast. It is so vast that almost everything that is possible will never actually occur.
I’m much impressed by an account I once read (I think in Richard Dawkins’s The Blind Watchmaker [2]) that it is possible for the atoms in the outstretched arm of a marble statue to arrange themselves such that the arm of the statue waves in the same way that a live human being can wave his or her arm. It’s possible. And it took a clever person to determine that such a thing is possible.
A wise person who sees the arm of a statue wave will understand immediately that the statue is a hoax – not really of marble, but instead that it’s a costumed live person or a mechanical device.
I frequently think of the vastness of the set of possibilities when I encounter arguments such as the one that a reader of Café Hayek sent in recently on conscription. This person rightly and very cleverly described a situation that is possible and that, should it arise, would render conscription economically justified. I’ve read similar reports of “possibilities” on many other fronts, especially (lately) on international trade. I admit it: a set of circumstances is possible under which trade restrictions generate net material-welfare gains to domestic citizens.
Such possibilities are far too remote to justify any actual policy of conscription or trade restraints.
Another point that has long impressed me is the one made by Rutledge Vining in his book On Apprasing the Performance of an Economic System [3], and emphasized by Jim Buchanan [4]: sound policy is always a choice of rules, never of specific outcomes.
Sound rules are necessary. To abandon a sound rule just because a clever person describes a possibility that is inconsistent with this rule is unwise – possible, but unwise.