Tuesday, June 9, 2009

Envision Victims But Not Villians

The biggest divergence between narratives and reality, in my view, is the primacy of villains. There is a tendency to blame someone--the greedy investment bankers!, the predatory subprime creditors!, etc.--but almost always these fall apart upon closer analysis. Scott Sumner believes that in arguments and post-hoc economic analysis alike, the smartest policies envision a world with victims but no villians. In the light of either incentives or neurology, villians disappear. We are left with only probability-weighted causes.