It is said that any job is easier if you have the right
tool. What is implied by that statement
is that one needs to be able to identify what the right tool for the job is in
the first place. A hammer is the right
tool for hammering a nail, but if you use it to slice cheese, you’ll be very disappointed.
We just discussed Hayek’s “Use of Knowledge” in class. The focal point of this article was Hayek’s
belief that it was impossible for a central planning board to use aggregated knowledge
to achieve a working economy. (A “rational
economic order,” using Hayek’s words.)
In the 1940s, the big debate in economics (and among other
fields) was the “socialist
calculation debate.” Hayek was the
star of the side that stated “you can’t use statistical aggregates to
substitute for the price system.”
So, the question remains, when CAN you use statistical aggregates
to make decisions? Hayek thought that
you could not use them to substitute for the price system, but I wonder what he
would think about the use of “big data” to improve things like education,
health care, advertising, etc.
Consider this talk:
So, when is the hammer of big data the right tool? I agree with Hayek: that it can never be the right tool for
comprehensive economic planning. Market
prices are the best at that. But if we
ignore data when we are making decisions about education, criminal justice,
etc. we are fools.
Some of observations.
ReplyDeleteFirst, take note that I am an "arm-chair-neophyte-wanna-be-economist-criminologist-political scientist-overall-classical-liberal/libertarian". So, pretty much, I am admittedly biased. Pardon the grammar throughout, my mind is running faster than my fingers can type ... I'm shooting from the hip with this one. Anyway, here are the observations:
Dr. Pjesky,
1) I enjoy that you posted this topic the day of El Presidente makes his 2014 SOTU address. Based on track record one could observe the that current administration has attempted "composite" market planning. I hold the opinion if force (government) uses a heavy hand into the economic manipulation, of a specific market or the economy, the "price system" is subverted and bad results for everybody will happen. Wheel barrow of bills for a loaf of bread, anybody?! Since we are talking about Adam Smith this week as well, the "Invisible hand" could also be viewed as being bound ... or in a political science/philosophy subjects, peoples personal freedoms within the markets are reduced.
When a force(government) panel/committee/commission/agency, says that they have looked at the data, come to a conclusion, that they know best, they are basically stating that their body of knowledge is more accurate than a potentially larger body of knowledge. Even though the masses, or the force, can not achieve 100% understanding the economy. It is still the differences between Statism (controlling economic and Social Orders) and Laissez-faire capitalism (Letting the individuals choose and the invisible hand operate)
2) Statistics in general have a multitude of uses, but I am leery of relying to heavily on stats being used on the whole, to develop political/social economic policy. That would be saying that once the regressions are run, all knowledge has been captured and that "it ain't gonna change". However, using statistics to target one particular finite part of a market can help build a better picture of what is happening, or happened. Mrs. Anne Milgram applied exactly this principle. She used statistics to focus, not on crime as a whole, but specific types of crime. BRAVO! Drug crimes are different than financial crimes. When she mentioned that the DA office was able to reduce murder rate by 40 something percent, that's not using a hammer. That is using a scalpel.
I enjoy studying/reading/dreaming about Fraud and fraud prevention. If Mrs. Milgram used statistics to reduce violent crime, here is another example of precision tools: The ACFE (http://www.acfe.com/) has been training Certified Fraud Examiners to use to statistics/big data to prevent and investigate fraud. Again, right tool for the right job.
Obat Nyeri Haid
ReplyDeletehttp://acemaxscare.com/obat-nyeri-haid/
http://acemaxscare.com/
http://goo.gl/87ZXkt
http://sakacamprung.blogspot.co.id/2016/05/jelly-gamat-qnc.html
http://sakacamprung.blogspot.co.id/
http://goo.gl/PlCvKq