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"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

"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..." - Frederick Hayek Whether or not UBI is a good idea, a useful idea, or a moral idea is an interesting question (I generally think not, but it seems that position is losing the debate). Arguing for UBI (or any other aspect of the economy) from an engineering perspective is a mistake though. An economy is not an elevator. When we put failsafes in to elevators, we know what they do. When we put failsafes in to economies, they behave in bizarre, unpredictable ways. A lot of things went in to the 2008 financial collapse, but at least part of it was due to a large group of smart (but in retrospect, unwise) people assuming that a math equation accurately represented the financial system.

codekilla 6y ago
I think it's worth bearing in mind that Hayek lived before the information age, and that there are real limits to the validity of the idea that design isn't useful (and especially in economics/finance). UBI may not be a good idea, but the reason being that it's likely not the best design (I would say Minsky had it largely correct [0]). [0] http://www.levyinstitute.org/publications/ending-poverty-jobs-not-welfare http://www.levyinstitute.org/publications/ending-poverty-job...
claudiawerner 6y ago
I agree with your overall point, but I don't think it has unlimited applicability, and ever since Hayek first published on this topic, even liberal economists and philosophers have been critical that it fails to take into account the evolution of government as part of that anarchy of the market. Some suggest the tension between rational constructivism and spontaneous order is a false dichotomy in the real world. It's worth noting that Hayek's conception of the economy as spontaneous order may run into something of a paradox[0], and in the view of some, the emergent and unconscious shaping of the market as we see it today can certainly conflict with other goals - in particular justice. I think most people are interested in at least asking about what can be done rather than sitting down at the command of "don't touch that, who knows what may happen!". [0] Assuming that some intervention in the economy is permissible (i.e. anything but anarcho-capitalism), see section "When Would Hayek Pour The Cement?" here: https://www.independent.org/pdf/tir/tir_14_01_1_sandefur.pdf https://www.independent.org/pdf/tir/tir_14_01_1_sandefur.pdf
ouid 6y ago
There are essentially two types of economic regulation. Blacklist regulation and whitelist regulation. Whitelist regulation works like an elevator, or more accurately, an airplane. You can reason over it, and speculate over the effects of adding new items to the list. It is a constrained problem. The blacklist style results in more innovation, but also more chaos. Hayek may not have realized this himself, but he was certainly talking about the blacklist style when he said this. In further support of this idea, the repeal of Glass-Steagal, which precipitated the 2008 crisis, essentially moved the investment banking system from a whitelist to a blacklist, and the result of this, was a bunch of insurance companies maximizing their correlated risk through a convoluted series of loopholes because that is always the goal of a limited liability enterprise. This was the event that made the equations invalid.

codekilla 6y ago

I think it's worth bearing in mind that Hayek lived before the information age, and that there are real limits to the validity of the idea that design isn't useful (and especially in economics/finance). UBI may not be a good idea, but the reason being that it's likely not the best design (I would say Minsky had it largely correct [0]). [0] http://www.levyinstitute.org/publications/ending-poverty-jobs-not-welfare http://www.levyinstitute.org/publications/ending-poverty-job...

claudiawerner 6y ago

I agree with your overall point, but I don't think it has unlimited applicability, and ever since Hayek first published on this topic, even liberal economists and philosophers have been critical that it fails to take into account the evolution of government as part of that anarchy of the market. Some suggest the tension between rational constructivism and spontaneous order is a false dichotomy in the real world. It's worth noting that Hayek's conception of the economy as spontaneous order may run into something of a paradox[0], and in the view of some, the emergent and unconscious shaping of the market as we see it today can certainly conflict with other goals - in particular justice. I think most people are interested in at least asking about what can be done rather than sitting down at the command of "don't touch that, who knows what may happen!". [0] Assuming that some intervention in the economy is permissible (i.e. anything but anarcho-capitalism), see section "When Would Hayek Pour The Cement?" here: https://www.independent.org/pdf/tir/tir_14_01_1_sandefur.pdf https://www.independent.org/pdf/tir/tir_14_01_1_sandefur.pdf

ouid 6y ago

There are essentially two types of economic regulation. Blacklist regulation and whitelist regulation. Whitelist regulation works like an elevator, or more accurately, an airplane. You can reason over it, and speculate over the effects of adding new items to the list. It is a constrained problem. The blacklist style results in more innovation, but also more chaos. Hayek may not have realized this himself, but he was certainly talking about the blacklist style when he said this. In further support of this idea, the repeal of Glass-Steagal, which precipitated the 2008 crisis, essentially moved the investment banking system from a whitelist to a blacklist, and the result of this, was a bunch of insurance companies maximizing their correlated risk through a convoluted series of loopholes because that is always the goal of a limited liability enterprise. This was the event that made the equations invalid.