Monday, 26 March 2007

Introspection

Rat in a Cage: A Convenient Journal

The reason why I started blogging was rather simple – I found it to be an ideal creative outlet and a convenient journal to track the flow of my ideas and the interesting things I found. I often find myself with many pent up ideas; ideas which are not as formal and lengthy as they are worthy of proper investigations and penned down as research reports (which would take weeks), but not as trivial as those that normally get chatted away on IM sessions - ideas that I personally feel to be tad wasteful to be forgotten.


What I didn’t expect, however, is that blogging (although I have only started blogging for a very short while) allowed much introspection on some of my beliefs and ideas. I mentioned about my Weltanschauung or worldview in my first post and how important it is for me. Looking through some of the seemingly disparate posts, coupled with some very helpful feedbacks, has somehow helped me to gain some clarity and coherence on the development of my worldview and that some of my separate interests and convictions are in fact part of a larger theme.



The World is a Vampire: Making Decisions

Personally, I am getting more and more convinced that three principles are absolutely crucial when it comes to decision-making, especially on matters pertaining to economic and public policies (although definitely not limited to these – I often find myself thinking along these principles when pondering on issues relating to management, people and relationship… and more). These principles are both interrelated and mutually reinforcing. With the reverse principles in parentheses, they are:


  1. Humility (Hubris)

The first thing that is needed when considering issues such as public policy is to be humble of our knowledge. We need to appreciate firstly, that our existing knowledge, as vast as it is, is limited and many gaps exist. Secondly, we must never underestimate the complexity of the real world/situation, both in the breadth of interdependency and the dynamism of its evolving nature. Formal and established understanding, in the form of theories and existing literatures, should always be in the forefront, but local knowledge and more nuanced and specific understanding to the situation should never be ignored.


  1. Flexibility (Dogmatism)

With humility, it is easier to have greater flexibility in assessing a situation and making decision. It also makes you less susceptible to dogmatism; advocating a certain school of thought, belief or conviction doggedly regardless of circumstances. When it comes to making decision on practical and specific issues, being an informed centrist is important – flexibility often dictates the success in assessing a situation, formulating a policy and implementing the decision. This is made more crucial in economics, development and public policy due to the nature of the current state of our understanding of how the real world works. Instead of a handful of simple and clear-cut laws that tell us what to do and what to expect, most of the time, we have a hundred competing tendencies and possibilities, of uncertain strength and, quite often, direction, with little guidance as to how to add them up. We can explain every fact many times over, with the result that there is very little left that we can both believe strongly and act upon (Banerjee, 2007). Thus, while it is important to identify higher-order principles involved at a sufficient level of generality, the challenge is to have the flexibility to fashion specific blueprints that are suited for the local context – that is to have decisions inspired by formal knowledge but grounded firmly on realities (Rodrik, 2006A).


  1. Objectivity (Bias)

Alongside humility and flexibility, being objective is paramount in making decisions. Humans are naturally biased in their perception and particularly, most people with power are prone to overconfidence in what they believe in. Coupled with hubris and dogmatism, this often leads to the dangerous slide to self-delusion. Often, erroneous and misinformed policies are made and perpetuated by the inability to accept and appreciate their failings.

Objectivity is crucial for two broad reasons. Firstly, I am convinced that there is no single grand narrative that is able to provide an elegant and complete explanation to any particular issue, event or phenomenon, especially complex ones. Almost all the time, it is the collection of small tales that explains the whole story. Thus, any attempt to view any complex issue through the lenses of any single convention based on dogmatic conviction will prevent us from appreciating its subtleties and ultimately reduce our ability to comprehend the issue in its entirety as well as. The danger arises when this narrow comprehension is used as a basis to come up with remedies or policies. Secondly, objectivity allows us to effectively and dispassionately assess the efficacy and success of our implemented decisions without bias. Especially given the uncertainties and the limitation of our knowledge, it is absolutely crucial that a policy that does not work is recognised, accepted, discarded and replaced quickly (Rodrik, 2006A). Perpetuating an ineffective policy is not just redundant; it is also wasteful and could potentially exacerbate the very issue it is trying to address. Cliché as it may sound, learning from our mistakes is one of the best way to improve ourselves.


No doubt, my thoughts on this will definitely evolve further as I learn more and gain further experience in the future. That said, I am fairly convinced on the broad principles outlined above as desiderata in any decision-making process, especially pertaining to broad-ranging issues such as economics and public policy.


Elanor


References


Banerjee, A. V. (2007), Inside the Machine – Towards a New Development Economics, Boston Review.

Rodrik, D. (2006B), Goodbye Washington Consensus, Hello Washington Confusion?, Harvard University.

Rodrik, D. (2006A), What’s So Special About China’s Exports?, Harvard University.

8 comments:

zcer said...

Your principles seem to be a subset of Yudkowsky's Twelve Virtues of Rationality.

Your Humility is one that almost exactly corresponds to one of the twelve, also humility. Flexibility contains both the lightness and relinquishment virtues. Objectivity is a mix of his evenness and empiricism.

Scientific methodology, which economics adheres to, already encapsulates simplicity and precision.

With all of that, plus curiosity and scholarship. What you are experiencing is what he calls the void. The oneness in your supposedly disparate interests.

I suggest however that you strive for more argument and perfectionism. I personally like to think of them both as ruthlessness. Both towards the beliefs of others and your own.

Good luck to you on this neverending journey towards truth.

Chewxy said...

Oooh... an update. With lots of nice philosogical content. No, I didn't spell the word wrong :D..

I was under the impression that everyone started a readable blog, whether it's you, Steve Levitt, or Andrew Leonard, it's for my reading pleasure. LOL. I'm conceited in such a way.

As for the nice content within this entry, I feel these need for superbombastic words are unnecessary. It's not that I don't get these words, but I feel it's these words that separates the lay and the philosopher.

I mean, try going out to the street and correcting people about their logical fallacies.

I don't think making decisions is so much towards finding the truth (zcer has much obsession with it, chat with him on MSN to find out), but rather, decisions are what propels us forwards in life.

Making decisions for me, is simple. I don't really care to be humble about the information I have, because I will never-endingly seek information. It's the internal machine that provides for the energy to seek information.

Yes, I seek information with the knowledge that my information isn't complete, neither is it perfect, but I doubt if I am ever humble about that.

You may think this is a flaw, on my part, but it's simple to me. If the info is bad, or I underestimated the situation, it's me who's going to get the brunt of the problems that will subsequently occur. And since no one ever wants to get in trouble, we naturally seek as much info as possible - I have yet to meet a person who says: "I have all I need to know. Now bugger off and let me handle the situation"

And the human self is extremely flexible. If not, how do we evolve? How did we emerge as the dominant species, if not for our flexibility, and our ability to quickly adapt to change.

Up to this point, if anyone is lost, I am saying that humility isn't really "necessary", and flexibility is innate witin each and every human bean.

Your third point, however, is certainly a better point - so no bone to pick there.

Call me an idealist (or a green human bean lacking in experience) but I believe in humanity's essentially Good (with a capital G).

And yes, I'm back trying to sound philosogical and deep. Yay :D. I blame my back pain.

Good evening to you, el.
p/s: I failed the stupid dummkopf word verification thing for the nth time already

Anonymous said...

elanor,

follow your passion...you give me the impression that if you don't wake up each morning wanting to read and write and do research in some economics, you won't be happy."

feliz..

Elanor said...

Thanks for the comments.

Just a short note tho - I think I didn't articulate myself well enough. The main idea of the post was not to be philosophical in an abstract sense or to search for the ultimate truth.

Rather, it is an attempt to convey, practically, how formulation of decisions on broad ranging matters, particularly economics/industrial policy should be done, based mostly from my experience and what I have learned before. The arguments are, I believe, firmly grounded on realities of our existing foundation of economics knowledge and empirical experiences of economic development in different economies.

My fault of trying to generalise the concepts to the extent that they appear to be more of a philosophical musing.

zcer said...

ugh, i hate words. people get so attached to them...

The point is not to seek some "ultimate Truth", whatever the heck that is...

If you really want to be so anti-general and anti-abstract, then we should all have communism and start doling out wealth in a haphazard manner...

If you didn't notice the link to the simple truth article...http://sl4.org/wiki/TheSimpleTruth

The whole point of the "truth", whatever the heck profoundness you think it needs to have...is to arrive at usable models for anticipation. Less "abstractly" that would simply be how to get from point A to point B.

Sorry for the rant. Sigh. I just hate it when people show their unjustified disdain for real philosophy. And also their aversion to a truth of any sort. Relativism seems to be the dominant culture of our time. It is really how the malaysian government is insisting on how they have the sovereign right to govern the country lousily you know?

I'm sorry, but it can't be helped that if anybody jumps of a cliff, they all fall. Gravity is an "abstract" and "general" "ultimate Truth". Yeah, i know, the "truth" is hard to "swallow"...

Elanor said...

I sincerely apologise if I have offended anyone through my careless usage of words and my casual exposition style in this comment section. I will attempt to be more careful next time when expressing my opinion.

Just to clarify myself, I do not hold a disdain for philosophy. My formal understanding of philosophy is near to non-existent for me to form a value judgement on it.

My point was, and it was actually directed to Chewxy, my post was not an attempt to be philosophical. I was just articulating, from personal introspection, how problems of policy-making (such as formulating a specific industrial policy for encouraging/facilitating innovation, perhaps) should be approached effectively from a practical point of view.

I was not expressing disdain for philosophy - I was merely trying to say that my post was not about philosophy. Or at least not that I know of.

However, my failure of communicating this message suggests that my writing ability needs much improvement.

Again I apologise for offending anyone, and I will try to refrain from casually conveying my opinions next time.

Elanor

zcer said...

LOL, you don't in the least offend "anyone" (me). Just like you there, I was deliberately overgeneralizing beyond Chewxy (by using the variable "anyone" and "you"), when my post was largely directed at him. Then also, it was all largely in jest. You should've noticed he took an equally jovial stab at me there.

I realize now "non-verbal" cues are not enough in conveying who i'm directing my text at in comments. I always thought it could be read off the context of the post.

And your post needed to be general and abstract to be practical. That is after all how we go beyond trial and error and banging into things all the time. Chewxy doesn't seem to realize that.

Though i do get what he means by "superbombastic words". All i can say is, you should use words insofar as they get the point across. To me at least it seems you do. Maybe you want to want more marginal readers who are currently slightly put off by the complexity of the words you use?

The rest of Chewxy's post can be safely ignored. :) sorry, for the confusion, i truly regret it.

MoonShadow said...

Hmm...just yesterday i handed in an essay on decision making and the prefrontal cortex....

Not that it had anything to do with philosophy and economics...but after reading your post, it dawned upon me that everything touched by humans would be given a sense of "life" to it. Although seemingly lifeless and static, concepts such as objectivity and biological regions of the brain are given this "nature of sociability".

I guess, after all its a life not for one alone, but for all within life itself.

Nice posts ^_^

Moony.