• Posted: Jan 15, 2009 20:24:52
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Do you happen to remember that children's story wherein the diligent squirrel is ridiculed for industriously putting away food for the bleak winter while all the other animals in the yard frolic in the summer sun, only to be sorry when the stark reality of winter finally arrives? The lesson, of course, is one of prudence with respect to the undeniable fact that things change and the future is very often an uncertain provider of all that is needed for our survival.
A great many of us, I think, are now kicking ourselves that we didn't heed that simple lesson. Many of us, perhaps, are also looking for someone to blame besides ourselves. Should economists, should bank regulators, should investment advisors, should elected leaders, should journalists, should talk-show pundits have warned us?? Did all those supposedly learned and socially responsible people fail us, fail to properly do their jobs with respect to protecting our welfare?
It's an interesting question in the sense that we certainly hold engineers, contractors, drug manufacturers, food producers, and medical practitioners legally responsible for the consequences of their prescriptions. Why don't we hold social and economic policy makers responsible in the same way?
One might argue that we do, in the sense that we either reelect them or choose not to reelect them, rehire them or not, continue to listen to what they say and read what they write or not. But that isn't quite the same as making them pay for the damage they may have caused as we do with all those other people in liability court settlements. What exactly is the difference? Why aren't social and economic policy makers held to the same degree of accountability?
Within academia there is a distinction drawn between the "hard" and "soft" sciences. The "hard sciences" include math, physics, chemistry, biology, and geology. The so called "soft sciences" include psychology, sociology, anthropology, and economics. The two groups both make use of the scientific method. So, why is one "soft" and the other "hard"?
The answer lies in their predictive power. "Hard sciences" reliably predict the future. "Soft sciences" do not. And the source of unpredictability for all the "soft sciences" is largely volitional behavior, human free will. Because we humans need variation in the routine of our lives, we do not make the same decisions every day. Because we learn things and change our plans, we do not reliably make the same decisions every day. Because we suddenly get scared or lose confidence, we do not always follow through with our plans. Because the fortunes of our lives are intertwined with the actions and decisions of others, we can't always count on our fortunes. And though they work very hard at trying to do so, the practitioners of all those so called "soft sciences" haven't yet been able to eliminate the uncertainty of human volition from their predictive models.
Until they do, the prudent course for all the rest of us might be to observe the lesson from that children's story about the squirrel. Unfortunately, the unintended consequence according to current "soft science" models will be that the more we save, instead of consume, the longer this recession will last. But, if we do alter our core behavior toward saving more and consuming less, in the long run we might experience fewer and less dramatic recessions. The key word, however, is "might".
Try to do what's best for ourselves? Or, try to do what's best for the world as a whole? It's not an easy balancing act, and a dilemma probably too unsettling for children's stories. Perhaps one day "soft science" will be able to help us out more than they can right now.
Sunday, March 25th, 2007
79.1 mm 375 mm