The Pretense of Knowledge and Hubris, and Predictions of Dread

In accepting the Nobel Prize in economics, Frederich Hayek’s remarks dealt with the The Pretense of Knowledge. Those remarks included prescient observations about the consequences of actions that do not reflect the limits of knowledge.

“If man is not to do more harm than good in his efforts to improve the social order, he will have to learn that…where essential complexity of an organized kind prevails, he cannot acquire the full knowledge which would make mastery of the events possible. He will therefore have to use what knowledge he can achieve, not to shape the results as the craftsman shapes his handiwork, but rather to cultivate a growth by providing the appropriate environment, in the manner in which the gardener does this for his plants. …

There is danger in the exuberant feeling of ever growing power which the advance of the physical sciences has engendered and which tempts man to try… to subject not only our natural but also our human environment to the control of a human will. The recognition of the insuperable limits to his knowledge ought indeed to teach the student of society a lesson of humility… . “

Hayek’s observations are important because individuals who consider themselves the smartest in the room continue to try to capture the workings of the world in complex computer models that substitute value judgments and assumptions for facts and reality for the purpose of informing policy.  When it becomes clear that model results don’t match reality, too often the reaction is not to admit the flaws in models; it is to explain away reality.  That is being demonstrated over and over in the field of climate change.

The models on which advocates base their predictions of dread do not accurately replicate the workings of the climate system.  Recent analyses have shown that the models consistently over predict warming and cannot account for the 16 year halt in warming.  The problem is that the model advocates have too much of their egos and reputations invested in the models and climate orthodoxy to admit failings.  Psychologists call this the Backfire Phenomenon—“rather than facts driving beliefs, our beliefs can dictate the facts we chose to accept.”

Over the past 40 years, there have been examples of super bright people constructing complex models to predict the future, which always leads to apocalyptic visions.  In 1972, the Club of Rome published a book based on a model built by two MIT faculty members who predicted the collapse of civilization around the end of the 20th century.  The model and the predictions that flowed from it were harshly criticized as “worthless as science and guides for policy” and “measurement without data.”  And yet, less than two decades later, some of the same doomsayers embraced complex climate models that predicted a climate catastrophe in less than a century.  As the criticism of these models has increased, climate advocates have responded as the Backfire Phenomenon would suggest by attacking critics and casting about for any piece of data or rationale to reinforce their beliefs.

Ironically, one of the harshest critics of the Club of Rome Limits to Growth model, Yale’s William Nordhaus, and other economists have built complex climate assessment models that attempt to estimate the economic impact of climate change over a far distant future.  These models have been seriously criticized by Professor Robert Pindyck of MIT in a peer reviewed paper, Climate Change Policy: What Do the Models Tell Us?,  Pindyck’s answer is “very little. … These models have crucial flaws that make them close to useless as tools for policy analysis.”

Humility not hubris is the quality that is needed to address complex policy issues like climate change.  Actions that presume knowledge that doesn’t exist are likely to poor policy options and produce unintended consequences that could be larger than intended ones.  Small steps to address public policy questions may not be dramatic and may lack flair but they will move us along a better decision path.  Policy makers should adopt a Lewis and Clark policy planning philosophy so that they can “first do no harm.”

 

This article appeared on the FuelFix weblog at http://fuelfix.com/blog/2013/12/04/the-pretense-of-knowledge-and-hubris-and-predictions-of-dread/

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