Whatever conservatism is, it must surely be at heart a world view that is founded on a perception of the stupefying complexity of life. In the article I highlight here, James Quinn takes a close look at what happens when people in a simple system attempt to regulate something complex like the U.S. or even the world economy. He's right on the money when he outlines what the inputs for the simple political system are. Suffice it to say they are not inputs that have much to do with the communication of useful data about the economy to the ears and eyes of politicians:
Much more . . . .“The law of unintended consequences is what happens when a simple system tries to regulate a complex system. The political system is simple. It operates with limited information (rational ignorance), short time horizons, low feedback, and poor and misaligned incentives. Society in contrast is a complex, evolving, high-feedback, incentive-driven system. When a simple system tries to regulate a complex system you often get unintended consequences.” Andrew GelmanAndrew Gelman is dead on. He states that the political system is simple. I'd go a step further and say that lifetime politicians and entrenched government bureaucrats are simple. They show no indication of knowledge or expertise in American history or rational financial theory. The President, Congress, Federal Reserve, and Treasury try mightily to direct our economy. It is an impossible task. With a GDP of $14 trillion, there are thousands of inputs and outputs that feed the system. Their hubris leads them to believe that they are in control and can manipulate the gears of capitalism in a way that will produce their desired outcomes. If a desired outcome occurs, it is simply due to dumb luck. The more likely result of their manipulations of our complex system is a set of bigger problems that never occurred to them.
"Unintended Consequences of the 20th Century and Beyond." By James Quinn, The Market Oracle, 1/8/09.
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