Quelle: New York Times
Before the crisis that started in 2007, both of us believed that the financial system was fragile and unsustainable, contrary to the near ubiquitous analyses at the time.
Now, there is something vastly riskier facing us, with risks that entail the survival of the global ecosystem — not the financial system. This time, the fight is against the current promotion of genetically modified organisms, or G.M.O.s.
The fallacies used in the arguments against us at the time were as follows:
- First, we were said to be “against science.” Our adversaries invoked consensus among economists in favor of these methods, a serious fallacy. Had science operated solely by consensus, we would still be stuck in the Middle Ages. According to scientific practice, scientific consensus is used in telling us what theory is wrong; it cannot determine what is right. Nor can it apply to risk management, which requires much greater scrutiny.
- Second, we faced the argument that “more technology is invariably better,” a corruption of the notion of progress. In fact, only a small minority of technologies end up sticking; most fail because of some flaw identified over time.
- Third, we were told that had ideas such as ours prevailed in the past, they would have hindered risk-taking. Yet, the first rule of risk-taking is to not cross the street blindfolded.
- Fourth, toxic financial exposures were deemed to be “safe,” according to primitive risk models. But Fannie Mae went bust exactly because of overconfidence in its bad models (and, incidentally, after its bailout, appears to use the same risk models).
- Fifth, the system kept relying on “predictions,” not noticing that the past track record of predictions by central bankers and economists can be used to make astrologists look good. Yet the entire economic system rested on these flimsy predictions — while we were advocating a system that had isolated parts to withstand prediction errors.