If You Would Like to Fund an Interesting Study, Call Me!

Thinking about the “fallacy of asymmetric idealization,” it occurred to me that it would be interesting to give personality, IQ, and heuristics and biases tests to high ranking U.S. bureaucrats and, better, Congresspersons. Would we discover that these are people who are especially good at decisions?

Well, no. We wouldn’t. But it would be nice to know that, wouldn’t it? And, anyway, this isn’t the important thing. The important thing is the institutional structure—the incentives. What would be really interesting is a set of experiments that compared extremely intelligent people playing games that mimicked the incentives within bureacracies and in politics, versus below average people playing games that mimicked the incentives of well-designed market mechanisms. I think I know how this would turn out, too. But it would be useful to have experimental confirmation that no matter how smart and well-informed the bureacrats are, the quality of their decisions in the aggregate when acting in reponse to the incentives of political institutions is not in general likely to equal those of much simpler folk acting within good market institutions.

17 Replies to “If You Would Like to Fund an Interesting Study, Call Me!”

  1. Excellent idea.

    I do have one nagging qualm about this general line of argument, however. I think it’s important to distinguish between two sorts of paternalist argument. The first is a general argument, which says roughly:

    (G) People are poor decision-makers, so government should intervene to help them make those decisions better.

    This argument, as you’ve noted previously, pretty clearly falls foul of the nirvana fallacy.*

    There is however, a more specific arugment that is less susceptible to this sort of problem.

    (S) People are poor decision-makers in the following specific way, X, so government should do Y to help them make those decisions better.

    The validity of (S) depends solely on whether Y actually remedies X – not whether bureacrats are comparatively better at making decisions than individuals and markets. (Although this clearly depends on Y being specific enough that it doesn’t leave much to the discretion of bureaucrats.) The quality of governmental decision-making is obviously relevant to whether they’ll actually implement Y (and (S)-type arguments may be dangerous if they tend to lead to counterproductive Y* interventions). However, that seems to me to be a rather separate point. (S) itself doesn’t seem to be directly affected by the nirvana fallacy at all (except perhaps to the extent that our own reasoning about whether Y remedies X is affected by biases).

    * I can’t remember whether you mentioned it, but I believe Harold Demsetz coined the term “nirvana fallacy” in 1969 to refer to what you call the “fallacy of asymmetric idealization”. I just like his term better. 🙂

  2. Excellent idea.

    I do have one nagging qualm about this general line of argument, however. I think it’s important to distinguish between two sorts of paternalist argument. The first is a general argument, which says roughly:

    (G) People are poor decision-makers, so government should intervene to help them make those decisions better.

    This argument, as you’ve noted previously, pretty clearly falls foul of the nirvana fallacy.*

    There is however, a more specific arugment that is less susceptible to this sort of problem.

    (S) People are poor decision-makers in the following specific way, X, so government should do Y to help them make those decisions better.

    The validity of (S) depends solely on whether Y actually remedies X – not whether bureacrats are comparatively better at making decisions than individuals and markets. (Although this clearly depends on Y being specific enough that it doesn’t leave much to the discretion of bureaucrats.) The quality of governmental decision-making is obviously relevant to whether they’ll actually implement Y (and (S)-type arguments may be dangerous if they tend to lead to counterproductive Y* interventions). However, that seems to me to be a rather separate point. (S) itself doesn’t seem to be directly affected by the nirvana fallacy at all (except perhaps to the extent that our own reasoning about whether Y remedies X is affected by biases).

    * I can’t remember whether you mentioned it, but I believe Harold Demsetz coined the term “nirvana fallacy” in 1969 to refer to what you call the “fallacy of asymmetric idealization”. I just like his term better. 🙂

  3. This study seems on point:

    Gode, Dhananjay K
    Sunder, Shyam

    Allocative Efficiency of Markets with Zero-Intelligence Traders: Market as a Partial Substitute for Individual Rationality

    http://ideas.repec.org/a/ucp/jpolec/v101y1993i1p119-37.html

    Abstract:

    This paper reports market experiments in which human traders are replaced by “zero-intelligence” programs that submit random bids and offers. Imposing a budget constraint (i.e., n ot permitting traders to sell below their costs or buy above their valu es) is sufficient to raise the allocative efficiency of these auctions close to 100 percent. Allocative efficiency of a double auction deri ves largely from its structure, independent of traders’ motivation, intelligence, or learning. Adam Smith’s invisible hand may be more powerful than some may have thought; it can generate aggregate rationality not only from individual rationality but also from individual irrationality

  4. Hey Will,

    I’m editing a new book for a Random House imprint entitled:

    The End Of And Death To Libertarianism: The Postmodern Era’s Next Best Relinquishment

    by Farsam

    Preface – “Ego Chamber: Of Commerce and Culture and An Unremarkable Set of Choices”

    There’ll be over fifty essays and I’ll be contributing the forward and one essay per section. The theoretical methodology behind the book is AQAL (which I could teach you). Would you like to contribute an essay? Here are some open essays that no one’s taken yet (we’re set to publish in 2007):

    Boast-Modernism: The Tautological Reification of Every Nothing

    Super-Scientism and the Economic Religionism of Evolutionary Psychologists

    At the Laundromat with No Change: Selling Out The Twentieth -Century – A Critical Examination of the CATO Institute Upon Its 30th Anniversary (A Be All And Tell All)

  5. Hey Will,

    I’m editing a new book for a Random House imprint entitled:

    The End Of And Death To Libertarianism: The Postmodern Era’s Next Best Relinquishment

    by Farsam

    Preface – “Ego Chamber: Of Commerce and Culture and An Unremarkable Set of Choices”

    There’ll be over fifty essays and I’ll be contributing the forward and one essay per section. The theoretical methodology behind the book is AQAL (which I could teach you). Would you like to contribute an essay? Here are some open essays that no one’s taken yet (we’re set to publish in 2007):

    Boast-Modernism: The Tautological Reification of Every Nothing

    Super-Scientism and the Economic Religionism of Evolutionary Psychologists

    At the Laundromat with No Change: Selling Out The Twentieth -Century – A Critical Examination of the CATO Institute Upon Its 30th Anniversary (A Be All And Tell All)

  6. [PART II OF ABOVE] [PART II OF ABOVE] [PART II OF ABOVE]

    At the Laundromat with No Change: Selling Out The Twentieth -Century – A Critical Examination of the CATO Institute Upon Its 30th Anniversary (A Be All And Tell All)

  7. [PART II OF ABOVE] [PART II OF ABOVE] [PART II OF ABOVE]

    At the Laundromat with No Change: Selling Out The Twentieth -Century – A Critical Examination of the CATO Institute Upon Its 30th Anniversary (A Be All And Tell All)

  8. Oh come now, yes you do! It’s okay, I can keep a secret! 😉

    BTW, who or what are you squinting at in your picture?

    Farsam

  9. Oh come now, yes you do! It’s okay, I can keep a secret! 😉

    BTW, who or what are you squinting at in your picture?

    Farsam

  10. Farsam, Are you going by a single name now, like Cher? Madonna?

    I’m squinting at the truth. It’s blinding.

  11. Farsam, Are you going by a single name now, like Cher? Madonna?

    I’m squinting at the truth. It’s blinding.

  12. As human beings, Cher is objectively an under-developed juvenile-bimbo (puella) that’s survived to late-adulthood fame via the less-than-authentic spirit of purely contrived manufacturing of “musical art” for market-manipulable subcultures that cannot differentiate between authenticity/non-authenticity into the higher stages of expression (centauric metaphors, metonomies), culture manipulation and cultural forgery – or in the case of the sensibility-jaded (which is where I’d lovingly put you, no offense meant – i put a lot of people there), they really just don’t care (developmentalist note: this stalled stage of female development is now epidemic and the next big evolutionary ‘washing-out’ will be the genuine breaking through of this collective stall-out – feminine embodiment is quite essential for evolution, and you won’t find a wit of support for this in the liner notes of Cher’s music – yes, ‘I’ve got *you* babe,’ indeed). These subcultures are systematically preyed upon by Big Music and their practices are “intellectualy laundered” by minds such as your own, or, say, a Tyler Cowen – despite your own finer artistic sensibilities that can actually *feel* the differences between schlock but can’t yet articulate why it would matter to fight for this ‘value,’ let alone evolve/involve the institutionality necessary to transfigure such giddily (mindlessly) free corporate manufacturing traditions. So the real sin is not cowardice (which I could get into, but won’t), it’s an undifferentiated, unintegrated philosophical outlook that (now, speaking contemporaneously), reifiies modernity’s conditions for it’s own safe sake (comfort zone’s anyone)! In the existential game of societal-cultural evolutionary-involutionary opportunities, folks such as yourself have been handed the ball (a very fortunate opportunity!), but you summarily drop the ball, too easily distracted by the hot chick in the bleachers showin’ you her silicon breasts while holding up a sign that reads: “Free Markets! Free Milk! Fuggedaboutit!” Madonna *is* an even worse consideration whilst we note that her manufactured persona actually dares to incorporate rebelliousness, independence as virtues, when we all know she’s proven herself by now to be anything but. I realize this is old hat to you, but hey, you did the invoking of the subject matter! 😉 Yet still, in case you query deeper, this *is* precisely the postmodern condition at work: differing narrativities of the good/true/beautiful duking it out (or dukkha-ing it out) rather unproductively – rather wastefully, all for the release – rarely for the integration. And if you can *get* that the criticality is at the reconstructive post-modern narrativity juncture (post-rational, living and operating munificently from being needs vs deficiency needs) and not at the rationalist-conformity wave of development juncture (mythic-membership, concrete-operational) then the “reframing” is profoundly powerful, especially as the “self” “self-deconstructs” – the new open space and renewed innocence marvelousl Now that’s Liberty with a capital L! And the old statist-vs-minarchist jig is quickly up! And therein the real work can begin – and, surprise, it’s fun!

    As far as mono-naming’s go, I’d say I’m more like:

    Osho
    Ghandi
    Penntellerboazthreeways
    Dougbandowscandal
    God

    It’d be so awesome if you simple became “Will”!

  13. As human beings, Cher is objectively an under-developed juvenile-bimbo (puella) that’s survived to late-adulthood fame via the less-than-authentic spirit of purely contrived manufacturing of “musical art” for market-manipulable subcultures that cannot differentiate between authenticity/non-authenticity into the higher stages of expression (centauric metaphors, metonomies), culture manipulation and cultural forgery – or in the case of the sensibility-jaded (which is where I’d lovingly put you, no offense meant – i put a lot of people there), they really just don’t care (developmentalist note: this stalled stage of female development is now epidemic and the next big evolutionary ‘washing-out’ will be the genuine breaking through of this collective stall-out – feminine embodiment is quite essential for evolution, and you won’t find a wit of support for this in the liner notes of Cher’s music – yes, ‘I’ve got *you* babe,’ indeed). These subcultures are systematically preyed upon by Big Music and their practices are “intellectualy laundered” by minds such as your own, or, say, a Tyler Cowen – despite your own finer artistic sensibilities that can actually *feel* the differences between schlock but can’t yet articulate why it would matter to fight for this ‘value,’ let alone evolve/involve the institutionality necessary to transfigure such giddily (mindlessly) free corporate manufacturing traditions. So the real sin is not cowardice (which I could get into, but won’t), it’s an undifferentiated, unintegrated philosophical outlook that (now, speaking contemporaneously), reifiies modernity’s conditions for it’s own safe sake (comfort zone’s anyone)! In the existential game of societal-cultural evolutionary-involutionary opportunities, folks such as yourself have been handed the ball (a very fortunate opportunity!), but you summarily drop the ball, too easily distracted by the hot chick in the bleachers showin’ you her silicon breasts while holding up a sign that reads: “Free Markets! Free Milk! Fuggedaboutit!” Madonna *is* an even worse consideration whilst we note that her manufactured persona actually dares to incorporate rebelliousness, independence as virtues, when we all know she’s proven herself by now to be anything but. I realize this is old hat to you, but hey, you did the invoking of the subject matter! 😉 Yet still, in case you query deeper, this *is* precisely the postmodern condition at work: differing narrativities of the good/true/beautiful duking it out (or dukkha-ing it out) rather unproductively – rather wastefully, all for the release – rarely for the integration. And if you can *get* that the criticality is at the reconstructive post-modern narrativity juncture (post-rational, living and operating munificently from being needs vs deficiency needs) and not at the rationalist-conformity wave of development juncture (mythic-membership, concrete-operational) then the “reframing” is profoundly powerful, especially as the “self” “self-deconstructs” – the new open space and renewed innocence marvelousl Now that’s Liberty with a capital L! And the old statist-vs-minarchist jig is quickly up! And therein the real work can begin – and, surprise, it’s fun!

    As far as mono-naming’s go, I’d say I’m more like:

    Osho
    Ghandi
    Penntellerboazthreeways
    Dougbandowscandal
    God

    It’d be so awesome if you simple became “Will”!

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