Thursday, January 26, 2012

Humility is Arrogance

One of the trademarks of Austrian Economics is that it argued that the economy is too complex to fully comprehend. The conclusion, therefore, is that we should approach understanding it with humility, and we should beware of anyone who says they know how to make it behave as they would wish it to behave. This is always my argument against those who think they know how the economy will or ought to behave, those who believe this or that regulation will have this or that definite outcome -- interventionists and socialists of all stripes. My argument is always that we cannot know what the outcome will be, that the system is too complex to fully comprehend -- particularly since we are elements within that system, meaning the economic system is more complex than we are. I argue that we are necessarily ignorant of what we can do to make the economy behave exactly as we want it to behave -- even as we can understand how people will typically behave given the right conditions, the right incentives, etc. We can make pattern predictions, but not outcome predictions.

I preach humility-- that we have to be honest about our ignorance. Yet when I do, I get accused of arrogance. How is it that the one who argues for humility in the face of our necessary ignorance is the one who is arrogant, while those who argue that we can in fact know everything such that we can plan the economy or, at least, knowingly regulate it, are not? By definition, it is the latter who are arrogant. Basically, I love that the one who says we should have humility when it comes to the economy because it is too complex to control is called arrogant by those so arrogant they think they can understand and control things more complex than they are.

It is amazing how much of a NewSpeak world we live in:

Humility is arrogance; arrogance is humility.

Wisdom is Foolishness

Ignorance is Knowledge.

War is Peace

More Regulation is Deregulation

Corporatism (fascism) is Free Markets

Power is Virtue

Hate is Love

"We are only threatening to kill you for your own good."

The solution to the problems created by power is more power.
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