Norms of Reason and the Prospects for Technologies and Policies of Debiasing

clipped from www.overcomingbias.com
I have so far found most discussions and debates about the correction of
cognitive “biases” very confusing, including most of the posts on this blog.
Why? Because I find the very idea of a cognitive bias confusing any time I
really start to think about it. A bias is a bias only relative to some standard.
The cognitive shortcuts and blind spots identified in the heuristics and biases
literature may look like “failure” when laid against some idealized conception
of rationality, but why should we care about such conceptions of rationality
anyway? A hip hop dancer is making constant “mistakes” from the perspective of
the formal norms of ballet, but why on Earth would you judge hip hop from the
perspective of ballet?  You wouldn't. I'm making a “mistake,” in some
sense, by failing to have abs
like a Spartan in 300
.
But so what?
I've got a new post up over at Overcoming Bias…
  • I think your analysis is spot on, although it could seriously do with a mention of Robert Higgs’ phenomenon of Regime Uncertainty, which he convincingly argues exacerbated the Great Depression, here: http://www.independent.org/pdf/tir/tir_01_4_higgs.pdf

    Unfortunately, it looks as though the US is following the same route all over again. It’s going to be a long 10 years.

  • hp

    It seems to me that once you get past the basics (police, roads, schools, etc.) the only thing that really matters to your standard of living is increasing productivity. Everything else is just fiddling at the margins. I find it impossible to understand why we spend most of our time debating the irrelevant or counterproductive (e.g., income inequality or fiscal stimulus) and almost no time discussing what really matters: INVENTING NEW THINGS.

  • Paul Zrimsek

    Prescott told me that he considers economic theory that treats the economy like a machine attached to policy levers that can be pulled to achieve the intended outcomes to be pseudoscience.

    When I asked what he would have advised, Prescott said he wished Obama had used his considerable political capital to form some kind of task force to very deliberatively restructure the tax system, the entitlement system, the financial system, etc., instead of pushing for a stimulus.

    Do these two Prescotts know about each other?

  • Nate

    Thanks for doing this bit of reporting on Prescott’s view. Any chance you could get him on Bloggingheads for an extended discussion.?

  • libfree

    The economy is more like a biological organism than a machine. In either case though, you do better with general maintenance than waiting to fix problems when they occur.

  • Arne

    +1 on getting prescott on bloggingheads

  • Isn’t the stimulus passed and gone?

    If it is passed, and perhaps you and I would be happy with re-legislation that shaved it back a bit, I still think the best path forward is to assert confidence.

    This is about the narrative and the animal spirits.

    Maybe I’m getting a little Realpolitik here, or perhaps even Machiavellian, but I think we’re all better off if you pretend to like the stimulus, and the debt reduction plan, and then work to go further.

    There is momentum involved, and conservatives or libertarians who dig in their heels for a train that left yesterday … not so effective.

  • Ms. Spelling

    “…we’d do better to concetrate on setting in place a sound structure of stable rules.”

    The word is spelled “concentrate”.

    • Norma Stits

      I’m Bubba.

  • Paul G. Brown

    Where is the difficulty in doing both?

    Yes. We need medium to long term restructuring of many areas of US capitalism. Perhaps not “restructuring” so much as “reconstruction”. The end of cheap oil, and the onrushing threat of global climate change mean energy policy, and the way we shelter ourselves, will be rebuilt. Information technology changes mean that banking regulations from the 1930s and manufacturing policy from the 1950s are a long ways from useful today. Our WWII vintage health care system is in the process of collapse. Helluva mess, Bushie. All of these institutions will be reshaped. The only question is how.

    But in the short term, we got issues! The argument being made isn’t that short term stimulus is going to solve all our problems; although there are areas of synergy. The argument is that the alternative to appropriately sized counter-cyclical fiscal policy and some pretty radical re-plumbing in the financial system is pretty damn bleak. Lots of real people actually suffering a lot, as opposed to relatively few people suffering barely at all.

    • Norma Stits

      I’m Paul G. Brown.

      • Paul G. Brown

        I’m Spartacus.

        • Norma Stits

          I don’t trust you Paul G. Brown.

    • Jer

      “The argument is that the alternative to appropriately sized counter-cyclical fiscal policy and some pretty radical re-plumbing in the financial system is pretty damn bleak.”

      Is that the argument, Paul? A few might say that the massive influx of liquidity has begun to do the trick (yeah, chicago! boo, everyone else!) and we should consider getting ready to stop future “stimulative” expenditures.

      Inflation is a somewhat regressive taxation, no?

  • E. Norma Stits

    Propagandist fear mongering mularky…

  • Jer

    To a degree, this is why I’m curious as all fuck about liberalterianismestablishment-tarianism. This word, it just rolls off the tongue.

    In my balls, I feel like I’m all for it. Because, well, in the son of the enlightenment sense, I”m a liberal. In the other sense – I just barely made it through econometrics for dummies – I’m a libertarian.

    But, Inflation is a regressive tax. Sin taxes are regressive taxes. (Etc., Etc., Etc.,) Square these circles and I’m on board. Shit, personally? I’m conflicted.

  • Jer

    One day I will be able to reply to a previous comment rather than create a new one. Apparently that day is very far off.

  • I’m sorry I had to see who Will Wilkison was and now I know. A laissez faire Repubican dolt. Let’s see, the economy sucks real bad and needs something to be done, so let’s tackle rewriting all of the regulation, tax policy, etc, to fix the economic woes – that get’s people back to work, creates job, extends unemployment benefits….are you for real? It would take congress years to finally fix all of the regulatory and tax problems. By then, even more jobs would be loss, people’s unemployment would be run dry, and we’d be in a long-term recession. Spending money is the fastest, most effective way to stimulate the economy.

  • luke

    i wonder if you were singing this tune when it came to the Bush tax cuts. Stable medium term policy indeed.

    • Imminent repeal an excellent illustration of time inconsistency problems!

  • musa

    Jeffy Sachs? Oh dear, that’s the same guy who ruined both the Russian and Bolivian economies right?

    • At least you don’t think it was Milton Friedman! I’m pretty sure these economies were pre-ruined. But yes, his privatization plans were ill-conceived basically because they didn’t take Hayek seriously enough.

      Anyway, are you able to follow and evaluate an argument or do you just have a good guys/bad guys switch that determines what utterances you thoughtlessly accept and reject?

  • musa

    Actually, its more of a filter than a switch.

    Sachs’ thesis that policy shifts produce bubbles, which in turn cause larger economic pain down the road is interesting, but his argument is mostly grounded in: 1) conflating monetary policy with spending poilcy and 2) a bunch of assertions that aren’t backed by any real evidence (to be fair, it is a short piece). Given #2, all I’m really left with is Jeffrey Sach’s good name that what he’s asserting is reliable. His role in taking “pre-ruined” economies and re-ruining them in all sorts of new and interesting ways, and his generally dreadful book “The End of Poverty” (sorry, not enough time today to get into why this re-packaging of failed 1950s development ideas is so bad – oh wait I guess that’s enough) all I’m really left with is his name and my so-called “switch”. He’s not a bad man, just not someone who, after producing a piece like this, should be taken seriously.

    • Jer

      “conflating monetary policy with spending poilcy”

      That’s kind of funny. Some people call “spending policy” fiscal policy. “Spending policy”, how very, very apt for the times.