Getting Everything Wrong in as Many Ways as Possible
Greetings, and thanks to the Ricochet editors for this opportunity to participate.
By way of introduction, I'll share a few links and ideas that all relate to the closest thing I have to a political program; I'm convinced that idiosyncrasy and complexity are worthwhile things in their own right and are essential to large numbers of people getting along together. Centralization, whether political or economic, promises efficiency and cohesion, but we pay a heavy price in the brittle institutions that result. Banks aren't the only institutions that get too big to fail.
But size isn't the only problem. It's uniformity of thought and preference that hollows out institutions, as Michael J. Mauboussin explains in this passage from More than You Know: Finding Financial Wisdom in Unconventional Places (cited at the Macroresilience weblog):
"Here's my main point: markets can still be rational when investors are individually irrational. Sufficient investor diversity is the essential feature in efficient price formation. Provided the decision rules of investors are diverse — even if they are suboptimal — errors tend to cancel out and markets arrive at appropriate prices. Similarly, if these decision rules lose diversity, markets become fragile and susceptible to inefficiency. So the issue is not whether individuals are irrational (they are) but whether they are irrational in the same way at the same time." (Google Books)
I don't mean to propose a squishy relativism here: everyone's not right about everything. Rather, if you assume that everyone's going to be wrong sometimes, it's best they not all be wrong in the same way. People are deeply fallible — fallen, even — but as long as we keep making different mistakes for different reasons, we can muddle through.
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Comments :
May '10
Re: Getting Everything Wrong in as Many Ways as Possible
Welcome, Mr. Frost. You're just in time to weigh in on the great mattress debate.
To your points, what you're describing is both highly individualistic and organic (in the self-organizing sense). Seems to be how modern liberalism likes to think of itself, when in fact it's quite the opposite.
May '10
Re: Getting Everything Wrong in as Many Ways as Possible
That's exactly what I thought while reading this.
Ottoman Umpire:
To your points, what you're describing is both highly individualistic and organic (in the self-organizing sense). Seems to be how modern liberalism likes to think of itself, when in fact it's quite the opposite. · Jul 7 at 11:49pm
Jun '10
Re: Getting Everything Wrong in as Many Ways as Possible
Brought to mind, the value of having one hundred different inventors, or teams of inventors, independently working on a similar product, or idea. They may not even know they have that much competition. Sometimes, one revolutionary idea--the integrated circuit for example--makes a thousand other things possible overnight. And overnight, a hundred new products bloom--95 that are flawed, and 5 that are works of genius. Genius that someday we'll wonder how we got along without.
May '10
Re: Getting Everything Wrong in as Many Ways as Possible
Welcome. Not a Warren Buffett fan, I presume?
May '10
Re: Getting Everything Wrong in as Many Ways as Possible
Too complicated for my feeble mind. I hope you don't talk this way at home, Matt.....
Re: Getting Everything Wrong in as Many Ways as Possible
Meanwhile, the other guys really do think that efficiency and cohesion result from perfecting arbitrary regulation. Regulation 1 might not be terribly inefficient or even incoherent -- Gavin Newsom and company can tell an inspiring story about how bad soft drinks are for the kids who drink them by the gallon every day -- but it's never just about Regulation 1. There's never simply a Regulation 1. There's a progressive sequence of regs, just as prone to proliferate as those new products you get in an individualistic, organic environment. Only, here, as the incoherent inefficiencies pile up, the 95% flawed rate makes everyone worse off.
May '10
Re: Getting Everything Wrong in as Many Ways as Possible
Matt, politicians should learn to talk like that. Liberals would hear "strength through diversity" while conservatives hear "diversity of thought", and everyone would be happy.
Re: Getting Everything Wrong in as Many Ways as Possible
My mind control secrets, REVEALED!
Re: Getting Everything Wrong in as Many Ways as Possible
Well, that's sort of the hard, irreducible kernel of conservative economics, right? That one million people spending one thousand dollars apiece, any way they like, is exponentially more efficient and beneficial than one government spending the same amount all at once.
Re: Getting Everything Wrong in as Many Ways as Possible
Rob,
I'd agree that it is the core of classically liberal (conservative) economics. But sometimes it's in tension with efficiency in the short run, so there are inevitable tradeoffs.
May '10
Re: Getting Everything Wrong in as Many Ways as Possible
Matt, what are the sources of your awareness that people are fallible and yes, fallen? How refreshing to read someone who proceeds from truthful anthropological ground. Most of the idiots we're surrounded by think that people are basically good.
Re: Getting Everything Wrong in as Many Ways as Possible
David:
For starters, I had to watch that movie about the Stanley Milgram study in high school. Then I went to a college where the predominant aesthetic was so idiotic, and so uniformly observed, that I found a crowd of cool friends and became an unapologetic misanthrope. I subsequently became an observant and semi-reflective Christian, which has, oddly, led me to the conviction that people are -- how did you put it? -- basically good.
Of course, it depends on what you mean by "basically." People make terrible choices. We subjugate and brutalize one another, and we squander our talents and resources with pathetic abandon, but we're all bearers of a divine image, and are all worthy of God's love and sacrifice. That's what I mean by "basically."
Thanks for asking.
May '10
Re: Getting Everything Wrong in as Many Ways as Possible
Yup.