My Absurd Belief

Tyler Cowen asks,

What is your most absurd view? Comments are open. Yes your comment should be crazy but serious too. It should refer to a view which you actually hold, but many other smart people consider untenable and bizarre.

My answer is that, despite my general agreement with Popper, I believe in a weak form of historical determinism, at least in terms of the evolution of ideas and technology. As a perhaps ironic example, even if Marx and Engels (and others) had died as babies, the ideas of socialism would have regardless materialized. The tragedy of communism was an inevitability the world simply had to get through sooner or later.

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I think we can reconcile

I think we can reconcile that with Popper's criticisms. An old debate within evolutionary theory is the extent to which the phenotype space is canalized, i.e. if you were to rewind the process with very slightly different initial conditions, how similar would the outcomes be? Those on the Gouldian side stress radical contingency, those on the Dawkinsian side stress inevitability. To some extent this is a hills vs mountains dispute, but it does seem obvious from evidence that there are many evolutionary pathways that could be called "inevitable" both because they make good engineering sense and because they've evolved independently numerous times.

This can apply just as easily to ideas (e.g. socialism), taking an "ecological memetics" view, where the fitness landscape for ideas is shaped by the architecture of the human brain. It seems clear that there are cognitive biases in humans which make it easy for socialism to flourish. So if I went back and time and shot Plato before he wrote The Republic, would totalitarianism have ever cropped up? Undoubtedly, for the same reasons eyes would still have evolved if I went back in time and killed the first creature that developed photosensitive spots.

However, this isn't the sort of historical determinsim that Popper (and Hayek) critiqued, because we still can't predict these things in advance. The best we can do is look backward and realize in hindsight how events conspired to bring about event X. It may look obvious in retrospect, but before the fact you chances of predicting it correctly were effectively zero. If we're lucky we can make a few very general short-term predictions (e.g. so-and-so will win the election next week), rather like weather forecasting, but the further into the future you try to go the exponentially worse your chances of guessing correctly will be.

I'll close with a quote from Hayek's Nobel lecture:

As we advance we find more and more frequently that we can in fact ascertain only some but not all the particular circumstances which determine the outcome of a given process; and in consequence we are able to predict only some but not all the properties of the result we have to expect. Often all that we shall be able to predict will be some abstract characteristic of the pattern that will appear - relations between kinds of elements about which individually we know very little.

"Weak determinism"??? Me,

"Weak determinism"???
Me, thinking to oneself: "This could reallycome in handy!"
Pulls out a little notebook titled "Easy cop-outs for philosophical discusssions."; writes it down.

Yeah, your historical

Yeah, your historical determinism idea is whack. :grin: As Hayek said, nothing is inevitable but thinking makes it so.

For me, the idea that gets the glazed looks and eye-rolls is pretty simple: the Federal Reserve ought to be abolished. That it's nothing but an instrument of constant inflation and hidden taxes and ludicrous government spending. It's a device for stealing from productive people (and to make the lives of bankers easier). It is the biggest daytime robbery in American history.

Or that we were better off under the Articles of Confederation.

Or the idea that casual charitable giving causes as many problems as it purports to solve. If you don't address the economic conditions that led to the need for the charity request in the first place, the problem will recur indefinitely. To change economic conditions, one must change one's economic behavior. For some reason, expecting people to actually make these behavioral-economic changes is considered to be beyond the pale.

George,I don't think we need

George,I don't think we need to abolish the federal reserve; we just need private currencies to compete with it and keep it disciplined.

That's a very Hayekian view.

That's a very Hayekian view. I disagree with it. There's not much of his I do disagree with, but that's one bit.

If we were to allow completely free competition with, for example, the Post Office, not abolishing it but allowing private mail service to compete with it, the subsidized, government-backed market competitor would end up, in some way, displacing some form of private economic activity. Maybe the only difference would be that the government-enterprise would have the potential for a tax-supported bail-out; even if it never actually used the subsidy, merely having the potential for one would enable more risky business decisions. Those activities would change the way that the private competitors do business; they would have to in order to compete.

If the enterprise were totally private, functionally identical to private enterprises in the market, then why would the government-sponsored version need to exist in the first place?

The only reason that any government-sponsored enterprise exists is so that it doesn't act as a private entity in at least one respect.

Whatever that non-private behavior is, it creates sub-optimal economic results in the entire market. It necessarily displaces some form of beneficial private economic activity.

George, I didn't mean to

George, I didn't mean to suggest I wouldn't like it if the Fed were abolished, just that it's not a necessity. Eventually once a couple of stable private currencies were established and in use, I'd be happy to call for the Fed's privatization along with the post office. :)

Anyway my weird beliefs are here.

I see what you are saying,

I see what you are saying, as a matter of procedure more than theory. But in any event, having "stable" currency doesn't mean much to me. Stability is overrated.

Or, more accurately, instability is a critical feature of free markets. In a decentralized economic system, a lack of equilibrium (in and of itself) is not only beneficial but impossible to remedy. It is harmful to even try. Independent actors will do different things to deal with the flux. Their speculation about the future performs the critical function of testing economic conditions. Without that testing (which will lead some speculators to succeed and some to fail), we have no way of knowing what those economic conditions really are, or to what extent they are relevant.

Instability of prices (and monetary value) was one of the primary bogeymen used to deceive people into believing that nationalized currency was a good idea. Statists typically exploit the fear of fluctuating prices, and use it to drive the propaganda for increased state control.

Besides, you can never eliminate, or even reduce, volatility, not in the global sense. You merely displace it to some other area. Call it Gaskell's Law of Conservation of Volatility. :lol: