Classic piece of self regarding nonsense from Haldane at the Bank of England. He is blaming 'groupthink' by the Great Unwashed driven by social media for future crises.
It does not occur to the tin eared numpty that he and his cronies are just as vulnerable to groupthink as are us poor plebs. You only have to read the article and see his ongoing adhesion to punk Keynesian claptrap as believed by every other Central Banker to know that he is not capable of thinking outside his own box.
As for the notion that "...the Bank can learn from “folk wisdom” of ordinary people to help it understand the economy better. is just a delusion. In any event if us plebs know more about the economy than the Bank does as this remark implies, just why are they bothering?
Epic fail.
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8 comments:
L, that's all true.
But when I finally find people I agree with on something or other, my next worry is "are we succumbing to group think?"
There is no group more prone to group think than the very people who are supposed to think for themselves: academics.
I've not read this paper, but I have read others over the years, and he is hyper aware of heuristics wherever they appear, especially in the minds of bankers and regulators, so I think he is being misunderstood here. He explores behavioural economics - what, apart from money, incentivises individuals or groups to do 'irrational' things. Read his paper on the dog and the frisbee for example which certainly does not excuse the regulators and banking elite.
OTH. Fair enough.
But, I am deeply suspicious of Behavioural Economics as a stand alone discipline. It seems to me rather like rather like Asimov's cod science of 'phsychohistory'. Without any doubt we all do things that others think irrational. But they are not irrational from our own perspective. Also any Austrian scholar already knows that incentives are not solely financial. We have all sorts of motivation for the things we do. Maybe Haldane is just indulging himself in a bit of intellectual self abuse - getting off on making an argument?
Haldane is smart, without any doubt, but he is still welded to the notion that central banks and bureaucrats can 'run the economy'. Run it into the ground maybe. But 'run' it? No.
MW. Of course. For example, that's one of the reasons to be for this forum. It's the continuous challenge and counter challenge that keeps things on the right track.
L: Without any doubt we all do things that others think irrational. But they are not irrational from our own perspective.
Correct.
MW
You smoke - I think that's daft; it's expensive and dangerous
I waste even more money on racing cars - you probably think that's daft as it is expensive and dangerous.
If you take Haldane's thinking onward logically you end up at fascism as both our behaviours would be banned. (I suspect that they're probably both on May's list for banning already)
L, exactly. I respect your desire to race cars, and you don't moan about me smoking, everybody's happy :-)
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