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In defence of uncertainty


Nick Henderson

By

August 8th, 2018


Nick Henderson argues that a counterintuitive dose of uncertainty is not just beneficial, but essential for economic and moral development.


“When the facts change, I change my mind. What do you do, sir?”

Regardless of individual opinion on the implications of his work, John Maynard Keynes’ alleged response to a cynical questioner is timeless. To collectively change our views in light of new evidence is to allow political and economic dynamism, with open political and economic institutions a necessary condition for this. Should such institutions not be in place, or should we prove unwilling to utilise this freedom, we leave ourselves open to partisanship, dogmatism and societally detrimental policies.

Most harmfully, we give a platform to ideologues and extremists, who use our aversion to change as a means to hijack our institutions. Whilst it is tempting to think that outdated, backward ideas are isolated to autocracies such as Saudi Arabia and communist countries like North Korea, there persists a worldwide market for regressive political thought, including in the developed world. Marxist and anarchist-inspired rebel organisations such as Antifa and the Animal Liberation Front continue to cause trouble – their leaders, too stupid to participate in a war of ideas, instead resort to violence.[1] The regressive right has had more success at the governmental level, especially in Europe, with right-wing populist movements spreading from Poland and Hungary to France, Greece, the Netherlands and the UK.[2]

So why the extremism? The answer is a partially-justified fear of open borders and loss of national sovereignty, and a less-justified belief that there already exists a system which negates the inherent flaws of free-market capitalism in a mixed economy, still the most successful governmental structure of the post-WWII era.

It is true that free markets often result in short-term displacement and may inevitably tend toward increased inequality.[3] This does not mean that a better solution is already in our grasp, however. The most developed countries in history have consistently adopted a mixed economy of free markets with strong government oversight, and the developing world can learn from this.[4] We still haven’t found the perfect balance – we perhaps never will. It’s okay to say that we don’t have all the answers here, and the ability to do so guards us against regressive thoughts, and from the resurgence of movements that do not deserve a second chance.

The Brexit vote saliently demonstrates the need to be comfortable with uncertainty. Highly contentious and widely misunderstood, Brexit was influenced by dogmatic political parties such as UKIP, who focused on the issues of national sovereignty and unchecked migration, while placing less emphasis on the substantial reduction in GDP that would result from Britain leaving the single market.[5] The British public’s ravenous desire to decide a complicated issue of international diplomacy resulted in a 72.2% turnout in the Brexit vote, which the “Leave” vote won with 51.9% of the vote.[6] On the basis of this, Britain will leave the European market, a complicated, layered system set up over a number of decades, and its departure will send the continent into unchartered waters, with economic ramifications beyond the comprehension of both yours truly, and the majority of the public. Yet for 72.2% of Britons, it seems it was not an option to simply say “I don’t know”.

This failure to adapt to changing circumstance despite uncertainty is also extremely damaging at the policy level. Catastrophe is inevitable when decision makers clutch onto old policies that have been tried, tested and known to be ineffective for fear of the unknown consequences of innovative strategies. In 1971, Richard Nixon declared drug abuse to be ‘public enemy number one’ and launched a brutal crackdown on the drug trade. Since drug demand is highly inelastic, Nixon’s war has failed spectacularly, with mass incarceration and scare campaigns doing nothing to reduce supply, and increasing cartel presence and violence in less developed countries, who quickly stepped in to fill the hole in the American market. The drugs themselves became more expensive and more potent.[7] Minorities were most affected by the crackdown. Despite being less likely to sell drugs than whites, American blacks are 3.6 times more likely to be arrested for their sale.[8] The problem has since blown out of proportion because policy-makers have failed to learn the lessons of their disastrous experiment and craft better policies from them.[9]

A few smaller countries which have re-evaluated their strategy in light of the horrendous results of America’s drug policy have had much more success. Portugal, facing a large drug problem of its own, opted to target the problem with decriminalisation, medical supervision and therapy as methods to counter actual use, rather than production. This focus on demand rather than supply has avoided many of the negative effects associated with Nixon’s war, and has actually reduced drug use.[10] This only occurred because policy makers were brave enough to try something new. Punching a brick wall in the same spot like America yields certain, but minimally successful results. Embracing uncertainty and digging a tunnel under the wall carries a higher probability of success.

It’s not bad to say I don’t know. The ability to admit uncertainty is a virtue that plays out in all political and economic institutions, as it allows them to evolve. Uncertainty is not a sign of weakness, rather it is a primary key to a nation’s moral and economic development.

 

[1] Ganim, S. & Welch, C. (2017). Unmasking the leftist Antifa movement. CNN. Retrieved from https://edition.cnn.com/

[2] Holleran, M. (2018). The Opportunistic Rise of Europe’s Far Right. The New Republic. Retrieved from https://newrepublic.com/

[3] Cassidy, J. (2014). Forces of divergence. The New Yorker. Retrieved from https://www.newyorker.com/

[4] Rodrik, D. (2001). Development Strategies for the Twenty-First Century. New Development Strategies. https://doi.org/10.1057/9780230523609_2

[5] Born, B., Müller, G., Schularick, M., Sedláček, P. (2017). £300 million a week: The output cost of the Brexit vote. VOX CEPR Policy Portal. Retrieved from https://voxeu.org

[6] BBC News. (n.d.). EU Referendum Results. Retrieved from https://www.bbc.com/

[7] Powell, B. (2013). The Economics Behind the U.S. Government’s Unwinnable War on Drugs. The Library of Economics and Liberty. Retrieved from http://www.econlib.org/

[8] Rothwell, J. (2014). How the War on Drugs Damages Black Social Mobility. Brookings. Retrieved from https://www.brookings.edu/

[9] Schultz, G. & Aspe, P. (2017). The Failed War on Drugs. The New York Times. Retrieved from https://www.nytimes.com/

[10] Kristof, N. (2017). How to Win a War on Drugs. The New York Times. Retrieved from https://www.nytimes.com/

Image Source: Javid44

The views expressed within this article are those of the author and do not represent the views of the ESSA Committee or the Society's sponsors. Use of any content from this article should clearly attribute the work to the author and not to ESSA or its sponsors.

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