Alex Tabarrok on the Ukrainian Crisis

1 04 2014

Alex Tabarrok makes some important observations about the nature of knowledge in society and prediction in a blog post about the West’s policies towards Ukraine.  His key insight is that Western politicians and pundits have strong views about what is to be done about Ukraine despite knowing little about the country or even being able to speak its language. 

Foreign policy experts love making bold predictions.  The clearer their conclusions, the wiser they sound.  Unfortunately, as Philip Tetlock documents, their predictions about controversial topics are scarcely better than chance.  They’re all style, no substance.  

I’m reminded of F.A. Hayek’s words: 

The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design. To the naive mind that can conceive of order only as the product of deliberate arrangement, it may seem absurd that in complex conditions order, and adaptation to the unknown, can be achieved more effectively by decentralizing decisions and that a division of authority will actually extend the possibility of overall order. Yet that decentralization actually leads to more information being taken into account. The Fatal Conceit : The Errors of Socialism (1988), p. 76

Hayek was talking about the impossibility of successful central planning: the economy is so complex that central planners wouldn’t be able to manage it even with supercomputers. However, his basic point can be applied to the making of foreign policy as well. 



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