Posts tagged markets

Ignorance and Markets

This is an unsigned editorial from the January 2009 issue of Philosophy (vol. 84, no. 327). Submitted for comment, without much commentary from my end. (Yet.)

Editorial: Ignorance and Markets

It may not be true that no one predicted the recent crash in the financial world. But it is certainly true that most well-informed observers and participants, including most importantly those who believed they were actually running things, were caught unawares. If they had been aware, they would have been able to avoid the worst consequences, at least for themselves, and even profit from the situation.

The 2008 financial crash has been compared to the fall of the Berlin Wall, in that just as the one signalled the end of an uncritical belief in socialism, at least of a centralised sort, the other signals the end to an uncritical belief in markets.

Let us leave aside the point that the markets of 2008 were actually heavily regulated in all sorts of ways, and so hardly unfettered. There is in fact an interesting parallel between 1989 and 2008 in one significant respect. Both events were largely unforeseen.

In one sense this is encouraging. For all our knowledge and technology there is much, even in human affairs, which is unpredictable and uncontrollable. This is, in a sense, judgment on hubris. It can also be liberating, particularly for those who do not see themselves as masters of the universe.

But should 2008 be seen as a decisive moment as far as belief in markets is concerned? Much will depend on what is meant by a market, no easy question when, as already mentioned, no markets to-day are unfettered, and are not likely to be in the foreseeable future.

We should, though, not forget that for followers of Adam Smith, such as Hayek, one of the main philosophical arguments in favour of markets was precisely the unpredictability of human action and of events more generally. From this perspective markets are not seen as perfect predictors, which there cannot be. But in situations of uncertainty they are seen as the most efficient and least hazardous way of disseminating information in a society and of responding to what cannot be predicted. It would be somewhat paradoxical if a failure of prediction was in itself taken to be an argument against a system which takes unpredictability as its starting point.

— Philosophy 84 (2009), 1. Cambridge University Press.


Monday Lazy Linking

Monday Lazy Linking

Monday Lazy Linking

  • Fall Right, Swing Left. Roderick, Austro-Athenian Empire (2010-05-15). “I don’t try to make you believe something you don’t believe, but to make you do something you won’t do.” — Ludwig Wittgenstein “Over and over, you’re falling, and then catching yourself from falling. And this is how you can be walking and falling at the same time.” — Laurie... (Linked Saturday 2010-05-15.)

  • Stress, Labor & Play. rechelon, Human Iterations (2010-05-14). There’s a lot of talk in anarchist circles about abolishing work.  Some of it in line with the dream of a high-technology path to post-scarcity.  But a lot of it takes an alternative route and settles for simply building a ludic society — that is to say a culture that... (Linked Saturday 2010-05-15.)

  • Heartwarming marsupial of the week. Jill, I Blame The Patriarchy (2010-05-14). What a darling fellow! This gentle furry woodland creature comes around every night at 8 o’clock to frolic amid the rotting kitchen waste in my compost bin, at which point our nightly staring contest commences. He growls at me, inch-long fangs dripping with disease, for as long as I care... (Linked Saturday 2010-05-15.)

  • You're not giving me that option. An Act of State is an Act of War (2010-04-24). In matters of state, when an agreement cannot be reached, often the other person will say, “lets agree to disagree”. This is impossible. If the person you are talking to is in the same state as you (Phillipines, United States, etc.), and that person supports the state, then he is... (Linked Saturday 2010-05-15.)

  • Ambivalent Sexism. (2010-05-15). This is useful: "Ambivalent Sexism Theory, as articulated by Peter Glick and Susan Fisk, suggests that while sexism is a form of prejudice it is marked by a deep ambivalence. That is, sexism is a unique and particular sort of prejudice. Generally, we think of prejudice as being characterized by strong negative feelings (and stereotypes) directed at a despised group. And, of course, many attitudes toward women are overtly derogatory. Glick and Fisk call this hostile sexism." Which they distinguish from paternalistic or "benevolent" [sic] sexism. I'd just add that these are really two sides of the same coin, practiced by the same men towards different women, or the same woman in different contexts. The point is that the pedestal is always conditional, and the social carrot is very easily replaced with a social stick when a woman steps outside of the narrow requirements of the pedestalized role. (Linked Saturday 2010-05-15.)

  • INSTEAD OF A POST ABOUT EPISTEMIC CLOSURE: If I were ever to. Jesse, The Perpetual Three-Dot Column (2010-05-07). INSTEAD OF A POST ABOUT EPISTEMIC CLOSURE: If I were ever to join the big epistemic closure debate, the points I'd want to make would be:1. Ideological in-groups have always been able to construct cocoons in which their own favorite sources take precedence over the mainstream media. The Internet may... (Linked Saturday 2010-05-15.)

  • The Myth of the Menacing Militias. Jesse Walker, Jesse Walker: Reason Magazine articles and blog posts. (2010-05-05). Flash back to the end of March, when the authorities hauled in nine members of the Hutaree, a Christian paramilitary group, and charged them with plotting a mass assassination of police officers. The media quickly added the arrests to the ongoing narrative of "rising right-wing violence," with the Michigan-based militants... (Linked Saturday 2010-05-15.)

  • On Enewetak (from The Distributive Passions) Shawn P. Wilbur, Out of the Libertarian Labyrinth (2010-05-15). [This immediately follows the section I posted May 2. It originally appeared on the defunct Distributive Passions blog. Bradford Peck was the author of The World A Department Store, and prime mover, along with the Vroomans, in the cooperative movement in New England. Much of this has already taken another... (Linked Saturday 2010-05-15.)

  • Amant ou mari? Shawn P. Wilbur, Out of the Libertarian Labyrinth (2010-04-24). Proudhon (in)famously wrote, in What is Property?:On distingue dans la propriété : 1° la propriété pure et simple, le droit dominal, seigneurial sur la chose, ou, comme l'on dit, la nue propriété ; 2° la possession. « La possession, dit Duranton, est une chose de fait, et non de droit.... (Linked Sunday 2010-05-16.)