The power of ignorance and the problem of abundance

We’re good, in the social sciences, at knowing what not to know. 
We’re less good at admitting that fact 


Telegenic economists have become superstars for publicly berating the discipline’s limitations, but quietly, behind the scenes, whole cadres of economists quietly persist in teaching and re-teaching methods that have been questioned or wholly debunked for years.

A central axiom of orthodox economics is that scarcity underpins economic activity as individuals battle to meet needs in a world of limited resources. Another axiom is that individuals will rationally maximize their own utility through obtaining more information of risks. In this short article, I explore how these axioms were found wanting during the recent financial crisis. It is not, obviously, the first time these axioms have been questioned. Nor, of course, will it be the last time that widespread knowledge of the limitations of economic axioms will be ignored.

Which is my main point. What’s surprising about the financial crisis is less that it happened – people had been predicting something like it for years. What’s surprising  is how easily economists have withstood the exposure of flaws in their  theories. Looked at closely, it becomes apparent that the chief tactic for ignoring limitations has been just that: simply ignoring limitations. Telegenic economists have become superstars for publicly berating the discipline’s limitations, but quietly, behind the scenes, whole cadres of economists quietly persist in teaching and re-teaching methods that have been questioned or wholly debunked for years.

On one hand, nothing is new about the deliberate ignorance of inconvenient facts. As the sociologist Robert Merton pointed out, individual scientists routinely ignore new and old information in order to impress on others the novelty of their own discoveries. He called it “citation amnesia.” Auguste Comte went as far as to follow self-prescribed bouts of “cerebral hygiene” in the name of science, deliberately not reading more material when he was felt he was on to something new.

The value of ignorance: We’re good, in the social sciences, at knowing what not to know. We’re less good at admitting that fact. Below, I unpack this problem through examining an underappreciated economic asset: ignorance itself. I suggest that the deliberate effort to harness ignorance has been central to perhaps the most curious aspect of the financial crisis: how the very rich got even richer from exploiting a crisis which they purport no one could have seen coming. Rarely has incomprehension proved so lucrative – something perplexing until we stop seeing incomprehension and ignorance as liabilities and see them for that they are: useful strategies of action... Read more: http://www.opendemocracy.net/ourkingdom/linsey-mcgoey/power-of-ignorance-and-problem-of-abundance