[LINK] We live in interesting times.... Or - is the gold standard really extinct.

Birch Jim Jim.Birch at dhhs.tas.gov.au
Tue Oct 21 12:05:31 EST 2008



-----Original Message-----
From: Link On Behalf Of Craig Sanders
Sent: Monday, 20 October 2008 6:32 PM

>humans obviously can't be trusted to run governments or economies or to
look after the planet....

>... sounds insane, right? yeah, it does. until you consider that the
alternative is more of the same, which is even more insane.

The thing that worries me is the way everyone believes that they are
competent to make decisions on stuff that they know nothing - sorry,
very, very little - about.

Everyone has an opinion on whether global warming is occurring but who
is actually qualified to have an opinion?  It's an incredibly complex
system.  The IPCC assembled a couple of hundred trained and respected
scientists
to look at it and cross reviewed each other's work.  But we would
apparently be much better off taking our views from cranky newspaper
columnists who wouldn't know the first law of thermodynamics if it
burned a hole in their  bottoms.  Maybe they consider themselves better
at diagnosing heart problems than their heart specialist too, or maybe
they could they could redesign their car engines to reduce fuel
consumption if they weren't busy this weekend. 

I read this recently:

In a democracy, of course, economic policy is set not by economists but
by the general public. One of my favourite books of recent years is
Bryan Caplan's treatise The Myth of the Rational Voter, subtitled Why
Democracies Choose Bad Policies. The answer Caplan offers is that voters
are worse than ignorant about basic economic principles of good policy.
Ignorance, at least, would have the virtue of being random and so
perhaps would average out to zero in a large population. Instead of
being merely ignorant, voters hold onto systematically mistaken beliefs.
And politicians, whose main job is to get elected, mold those mistaken
beliefs into bad public policy. To quote Caplan, "What happens if fully
rational politicians compete for the support of irrational
voters--specifically, voters with irrational beliefs about the effects
of various policies? It is a recipe for mendacity."

(www.economics.harvard.edu/faculty/mankiw/files/Smart%20Taxes.pdf)

Bring on AI: You a mug if you don't use it.

Jim


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