On the externalities example I have also worried that conventional economic treatments also completely ignore corruption. In real life I think you have to assume that the government does not always act like an angel, and therefore there is an additional cost to allowing governments to correct externalities at all. And this cost will not just be limited to the example itself (where the government introduces a sub-par solution to the specific externality in question as the result of corruption), but instead applicable to broad swathes of economic interactions where, once allowed the power to correct externalities, governments may corruptly "correct" situations where no externality truly exists.
It has crossed my mind that Bayesian thinking is especially susceptible to rationalization since, when applied to real world problems prior probabilities are usually very difficult to establish and very easy to rationalize. I am concerned that this may represent a sufficiently severe flaw in "Bayesianism" that it invalidates the entire concept.
I wonder how many readers and commenters here have changed truly deeply held and emotional (e.g. political) views as a result of a process of rational thinking. And if this has not happened, is it evidence of anything interesting?
In reading this it has occurred to me that a good response to someone asking for an "honest" answer might be to ask in return "Why do you want an honest answer?". The response might provide a guide as to whether or not the questioner really does want an honest answer, and whether or not it is a good idea to supply one.
“Yes, sulfuric acid is a horrible painful death, and no, that mother of five children didn’t deserve it, but we’re going to keep the shops open anyway because we did this cost-benefit calculation.” Can you imagine a politician saying that? Neither can I. But insofar as economists have the power to influence policy, it might help if they could think it privately—maybe even say it in journal articles, suitably dressed up in polysyllabismic obfuscationalization so the media can’t quote it.
This speaks to a very significant issue we face today. Vast sw...
Your overall argument is well made.
However I think choosing to use an economic example as your theme may be problematic. Economic studies are basically impossible to conduct rigorously. There can be no controlled, double blind, repeatable experiments. In addition, given the fundamental inteconnectedness of all things (Douglas Adams was a greater man than many people realize), it is extremely difficult to predict what the effects of a change actually are, and therefore what effects need to be measured (at least in order for any results to be usable for p...
I don't think you need to subscribe to a "Great Men" theory to achieve the same result. All you need to assume is that the number of technological discoveries (or the rate of technological advance) is proportional to the size of the population. This would validate the notion whether 1 in a million is making a discovery or whether everyone makes a discovery.
My own instant reaction, admittedly based entirely on subjective experience, is that the premise of the article is not true. If I and my circle of acquaintances are a representative part of "most people" then "most people" are perfectly happy with the concept of relying on facts to inform and guide decisions.
The problem that complicates my life is attempting to determine what the facts actually are. This has never been easy, but the relatively recent proliferation of human knowledge (i.e. the total number of facts that humans collecti...
Well that works if you wait until you get an answer and then make adjustments. But I think most people (hopefully at least) manage to avoid that degree of bias. But there's still the issue of how you determine the prior probabilities in the first place - after all it's not like you can't make a good estimate of what sort of numbers are likely to produce the result you want before you ever do any calculations at all.