Wednesday, January 05, 2011

Belief Systems

One commenter over at The Automatic Earth was recently disparaging comments he read over at Zero Hedge. I began a reply but it became long enough that I felt it better placed here instead.


A general assumption made by many posters at TAE (but not by I&S as far as I can see) is that the old ways of thinking about things are inherently wrong, therefore any comment based upon that line of reasoning must be "stupid". Unfortunately, no one has demonstrated conclusively which old ways of thinking are wrong, nor has anyone demonstrated how they are wrong, which means these people are simply "assuming", and we all know what is said about assumptions, right?

I prefer personally to read the comments at ZH (or at any blog or forum) as an exploration of the lines of reasoning that result from certain ideologies. Socialism is not wholly wrong and neither is capitalism, but I can demonstrate failures of each ideology that, because these failures have never been addressed, must inevitably lead to the collapse of any culture based upon these ideologies. Indeed, if these failures were addresses, the new resulting ideology would no longer be capitalism or socialism.

One of the core problems gripping economics, and by extension politics, is that neither school adheres to the scientific method. There are all sorts of excuses made as to why this is so, but the consequence is that schools of economic thought and schools of political thought instead become belief systems, predicated on faith. For many people, their economic and political beliefs today are the replacement for the religious faith of 1000 years ago. After all, these political and economic beliefs bring home the bacon and therefore should be defended, right?

A good scientist, on the other hand, would be actively looking for ways to falsify his hypothesis. Krugman, for example, has been slapped repeatedly with data that, if he were really a scientist, would cause him to throw out his old thesis and begin formulating a new one that matches available data. Instead, he either excuses or attempts to twist the data as support for his never changing position.

The disparaging comments at TAE towards anyone who does not tow the general party line are themselves just as bad as the "Glenn Beck" comments over at ZH. These disparaging comments indicate to me that someone is not fully comfortable with their own "faith" and therefore must attack competing "faiths" with disparaging comments in order to bolster their own "faith".

This is what I find so refreshing about Stoneleigh and Ilargi - they approach the topic not from the perspective of belief systems but in the same mode as scientists trying to apply observation of human behavior to human societies. I often suspect that this is at the root of many of Ilargi's questions, trying to make someone think rather than just believe. Stoneleigh's focus on herding behavior is a refreshing perspective versus the circular logic of most modern economists.

In closing I suggest observing all sorts of groups of people, in an effort to learn where their belief systems map to real data and where their belief systems fail to map to real data. Understanding how someone's beliefs map to reality is the first step in learning to really talk to and listen to that person. And surviving the coming crisis means either killing your competitors for resources or learning to talk to them and working out a cooperative alternative. While I am armed and prepared to defend myself, I'd rather understand the fellow down the road, whether he voted for Sarah Palin or Barrack Obama, as understanding is the first step towards cooperation.

1 comment:

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