If you have to choose between irrationality and reason, it is easy to choose reason. But how do you keep a faith in reason from developing into hubris? How can any economist today argue for say, a stimulus package, with any confidence? Or a further lowering of interest rates by the Fed? I can see making it as a suggestion. But how would you argue for it with passion? Doesn’t the current situation and the inability of macroeconomists to predict it (or to have any certainty about whether we are going to have a mild recession or a serious Depression) suggest some humility?
I’ve been thinking about humility after listening to part of this talk by Harvey Mansfield (where he takes on the nudgers, Sunstein and Thaler) and after hearing Deirdre McCloskey give a talk last night. McCloskey summed up some social engineering scheme as "I’m from the social sciences and I’m here to help you."
Of course some social science is helpful. It is good to be self-aware (psychology) or aware of incentives and markets (economics). 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.
