Dinner with James Manzi
The publishers of Uncontrolled, his forthcoming book, hosted a dinner attended by about a dozen conservative media luminaries, as well as by yours truly. We received advance review copies prior to the dinner. Uncontrolled will not be available until May 1.
I have tried to refrain from referring to it until closer to publication date, but I cannot maintain this self-imposed embargo. Indeed, when I invoked the Hill criteria here and here, I was referring to methodological principles that I discovered from reading Uncontrolled, which I believe should be part of the econometrics curriculum.
In fact, I could make a case for replacing, or at least preceding, the econometrics course with a course on empirical methods in social science. And I could make a case for putting large chunks of Uncontrolled on the reading list.
Manzi is a fan of randomized controlled experiments in business and public policy (in the latter, examples include the Rand health care study and the Wisconsin income-maintenance studies). I believe that decision-makers will resist this approach, for the same reason that they resist Robin Hanson’s suggestion to use prediction markets. That is, decisions are not necessarily about achieving results. They are often about establishing the status of the decision-maker. For a decision-maker to conduct experiments or to employ prediction markets is to admit ignorance and doubt, which lowers the decision-maker’s status. (Compare the status of economists who give a confident-sounding answer with those of us who say, “There is no way to know” when asked questions like, “How many jobs will the stimulus bill create?”)
I think that the real benefit of Manzi’s book will be in the way it reinforces Hayekian conservatism*. Manzi and Hayek would say that the emergent order of society includes both embedded wisdom and embedded error. That is, people have developed habits, norms, and formal institutions, many of which promote the general welfare but some of which do not.
The application of social science to public policy is an attempt to use conscious knowledge to replace embedded error. What I call Hayekian conservatism is the view that social scientists know so little that these attempts are more likely to undermine embedded wisdom than to correct embedded error. Therefore, policy ought to be cautious.
(*Hayek famously wrote that “I am not a conservative.” However, one interpretation of that statement is that he was referring to European conservatism, meaning preserving a certain hierarchical order. I would say that a cautious approach to implementing top-down policy change is both Hayekian and conservative.)
Hayek would argue that there is embedded wisdom in society that is beyond the understanding of social scientists. Call these the “unknown knowns,” if you will. That is, social scientists are not aware of how habits and institutions work, but these habits and institutions have, through evolution, accumulated tacit knowledge. As social scientists, we can make some guesses about how property rights, the rule of law, trust, and trade contribute to higher per capita GDP. However, we are not able to explicitly “fix” underdeveloped countries. Richer countries are richer in the unknown knowns.
Manzi argues that social scientists have developed very little knowledge that is valid and useful in fields such as criminology, education, and other policy areas (William Easterly would stress foreign aid as another example, and I would stress macroeconomics as another.) I think Manzi makes a profound, compelling, and insightful case, so that Uncontrolled is a valuable book.
When Manzi argues for randomized controlled trials, he makes a modest case. He says that social scientists could learn a bit more, and therefore make policy a bit more effective. At the dinner, I think a number of us were skeptical that if Manzi’s call were heeded the intended consequences would be accomplished and unintended consequences would be avoided.