Monday, July 9, 2012

I agree completely with Bryan Caplan on this, and Daniel Kahneman has a good quote

Bryan writes this (the line I especially like from Kahneman is bolded):

"Daniel Kahneman's view of the 2008 crash is eerily similar to my own:
Many people now say they knew a financial crisis was coming, but they didn't really. After a crisis we tell ourselves we understand why it happened and maintain the illusion that the world is understandable.
Economists have a mystique among social scientists because they know mathematics. They are quite good at explaining what has happened after it has happened, but rarely before.
Still, I can't agree when he says:
In fact, we should accept the world is incomprehensible much of the time.
Given Kahneman's amazing track record of intellectual contributions, I don't think he really believes this either."

He thinks the agreement is eery - how do you think I felt when I realized I agreed with Bryan on every point!


  1. Where's the link to the post by Bryan Caplan?

    In any case, Dr. Michael Emmett Brady has commented on Daniel Kahneman and Amos Tversky's experimental evidence. The evidence provided by their research actually serve as a good footnote to Keynes's Treatise on Probability.

    But as for this instance, I think Kahneman is being wise, to understand the limits of our knowledge.

  2. I agree with Hicks (and Mises): economics largely a tool for historical understanding.


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