Human Action, Not Human Design

Alternatively titled: The Incredibly Strange Meme Which Stopped Living and Became Mixed-Up Anti-Capitalism.

For those of you not following the Norberg vs. Kuttner debate, it's starting to get downright nasty.

Robert Kuttner is now accusing Johan Norberg of being "utopian and an absolutist," a "dogmatist" who "offer[s] no hypotheses that are falsifiable," and a "devotee of a fundamentalist religion," namely, the cult of free-market capitalism. According to Kuttner, Norberg needs to "get off [his] cloud and study the complexities of actual economic history."

Norberg, on the hand, has been more than cordial, and has successfully avoided ad hominem attacks.

However, this should come as no surprise to those familiar with Kuttner, as Julian Sanchez pointed out in his excellent essay, Economic Gospels:

When you read [Kuttner's] columns, you find that despite his reasonable-sounding insistence that each sector be evaluated on a case by case basis, there's always grounds for intervention, and the government can always be trusted to find the optimal outcome that markets don't quite muster. Who's supposed to be working on blind faith, again?

Julian makes another insightful observation when he remarks that,

Like cavemen hearing about television sets, [market bashers] could only assume that this was some sort of sorcery. How else would you get the little men inside the box? They might understand the claim that in some particular sector, markets required no intervention -- though they'd be skeptical -- but the notion that, on general principle, complex systems ran themselves just fine without benign intervention seemed like it could only be the product of a quasi-religious faith.

Of course, this gets things almost precisely backwards. It is the idea that all order must be explained by a functioning mind at the helm, not its denial, that has the closet affinity to the religious instinct.

This, I think, is why so many people are skeptical of -- and hostile to -- both capitalism and economics in general, as well as the theory of evolution. How can order come from chaos? How can we trust in unguided systems to produce the desired results?

Evolutionary psychologists have noted that humans have an overdeveloped ability to notice patterns where they do not exist. We then attribute these non-patterns to design rather than to randomness. If I flip a coin one million times and, in the process, get ten heads in a row, many will consider this a "hot-streak" and mistakenly believe that on my eleventh flip, I will be more likely than not to get another heads. Similarly, epidemiologists face a selection bias when choosing certain areas with higher than average rates of cancer. Is the high rate of cancer in this small town caused by the evil industrialists polluting our water supply or is it simply an unfortunate coincidence?

We tend to notice coincidental evidence that supports what we are looking for while ignoring uninteresting failures that do not. The "spontaneous order" described by economists from Adam Smith to F. A. Hayek is all the more difficult for us to grasp because of our overdeveloped pattern recognition abilities.

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All of it is human design,

All of it is human design, 6.3 billion individual designs, changed frequently. :-)

Seems like the "libertarian

Seems like the "libertarian religion" meme is replicating. It's well designed, because it's based on reality.

Jews, as a collective

Jews, as a collective entity, are trying to take over the world through control over financial institutions and the media, and by enslaving everyone else through usury. This particular meme is replicating and has been for years. Therefore, it is well designed, because it is based on reality.

Q.E.D.

I sympathize with much of

I sympathize with much of your basic philosophy, but disagree with you completely when it comes to the implication you make with your argument above. While it is true that humans have an overdeveloped sense of pattern recognition, this applies across the board to all of us. You could just as easily argue that capitalists, gun-rights advocates, etc. pick and choose results favorable to their arguments and see patterns that really don't exist. It is simply fallacious to take a characteristic which is common to mankind as a whole and then argue that it only manifests itself in those with whom you disagree.

Didn't you leave out the

Didn't you leave out the premise that all well-developed memes are based on reality? Because if you don't insert that, then your syllogism fails. Memes, having no physical character can probably be both well-designed and not based on reality. (We commonly call this fiction.) However, it does seem that a meme that is 1) well-designed; 2) based on reality; and 3) tested regularly would tend to supplant one that was both well-designed and tested regularly but not based on reality (Marxism would fit here, I think).

You can use the scientific

You can use the scientific method to find which patterns are probably real, and which are just random coincidences. Free market economics has been shown to work, and passes the tests - collectivism has failed miserably ? despite numerous experiments in the past.

I love how Kuttner

I love how Kuttner constantly accuses others of slavishness to orthodoxy and blind trust in theoretical constructs when he won't examine the premises of his own belief that:

market failure -> existence of government solutions.

This, of course, does not follow at all. It's like the man never heard of either Social Choice or Public Choice theories. I once cc:ed him on a letter to the NYTimes editors calling his writing "poorly researched," for exactly the pattern of willful ignorance I just mentioned. He wrote back accusing me of engaging in "puerile insults."

Et tu, Bob?

Or one could have faith and

Or one could have faith and believe that there are no coincidences. There is a reason practice makes perfect.

One concept rarely (if ever)

One concept rarely (if ever) touched upon by Kutternites is 'government failure'.

They're always big on the market failure, fixing this outcome, fixing that outcome, egalite uber alles (forgive the Freutsche), etc.

But nary a peep on what to do when the government fails.

Jack, Excellent point,

Jack,

Excellent point, although I think you may be reading too much into my argument. I didn't mean to imply that I or those who share my political ideology are immune to this phenomenon. We are all guilty of ignoring the weak parts of our own cherished beliefs while only focusing on the good.

Rather, my purpose was to present a possible explanation for why so many people find the theory of evolution and self-regulating free markets so difficult to accept.

It might be less a matter of

It might be less a matter of overdeveloped pattern-recognition ability than two other things:

1) Humans have a propensity for interpreting vague, low-definition scenes as containing those features they want to see in them;
2) To confer knowledge, patterns with causal implications must be testable -- falsifiable. In macroeconomics, they seldom are, if only because the necessary reproducibility and control of variables is usually impossible to achieve. Also, populations dislike to be experimented on.

Just as all ideas have a domain of applicability outside which they must not go, all human talents, including pattern-recognition and inference, have natural bounds, beyond which it's not wise to push them. Learning those bounds is a matter of experience, usually painful experience. Economics, the study of how humans pursue their desires, could well forever be limited in its predictive power and its analytical utility by the considerations above. If so, we might just have to learn to live with that.

But, all of the above having been said, and with due regard for his years of experience in the field, Robert Kuttner is still a flaming statist asshole. There! I feel much better now.

Francis, In macroeconomics,

Francis,

In macroeconomics, they seldom are, if only because the necessary reproducibility and control of variables is usually impossible to achieve. Also, populations dislike to be experimented on.

Economics, the study of how humans pursue their desires, could well forever be limited in its predictive power and its analytical utility by the considerations above. If so, we might just have to learn to live with that.

This is exactly what drew me initially to the Austrian school. Economics can rarely be a controlled science. Thus, it has to be built from the ground up through irrefutable axioms.

In the words of Ludwig von

In the words of Ludwig von Mises; "It is never plan or no plan, but whose plan"

'Animal Spirits' are real -

'Animal Spirits' are real - they are collective humanity, choosing and acting.

The reason futures markets are such good conveyors of information is the participants all have a personal stake at risk for being wrong.

This is far different than the state bureaucrat planning and spending his budget and is the nub of the laizzez faire criticism of socialism.

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