From Economy Lab:
From great ideas to policy blunders, Economy Lab's experts and analysts look at 12 months of developments in the dismal science
Fourteen economists give their picks including Frances, Stephen and I. Reading over the picks I kept thinking "now why didn't I choose that?!?" Also, it appears it wasn't a good year for our friend Tony Clement.
I would love to get your picks – please leave them in the comments.
Worthwhile Canadian Initiative 
Yvan: Yes, we definitely seem to be closer to the same language now (i.e. Go Habs, go!). And I take back the post-modern accusation. It was, in fact, an underhanded slur. While I’m frustrated that you wont accept my epistemology (yes, you were supposed to say that I was right and you were wrong…), I’m happy to move on to concrete examples.
But first, I don’t understand why you say that I’m assuming correlation between the knowns (risks) and the unknowns (uncertainties). I’m not aware, at least, that I was. I thought I was assuming they were independent.
Taking the example of the bacterium, I was hoping you would say that it might cure cancer. But unless it was sent by God to cure cancer, it’s just going to go about its selfish business of feeding and reproducing. Ignoring the obvious negative impact that it is competing with the other cells in the body for resources, it may either 1) not interfere with any processes in the body or 2) interfere. If we assume that most of the processes in the body have positive utility for the human, it’s simply vastly more likely that it will cause harm than cure cancer or any other good. The odds of good versus harm are comparably dismal as the odds of a random mutation being good versus harmful. This is a fairly straightforward result of the system being in a highly particular and optimized state from the perspective of the owner. At this point, I think you would object by saying that I am using some information that I know about the system. Yes, it’s true. I know that the system is very particular. But I’m assuming nothing about the “uncertain” thing that might happen to me except that it might do something to me. And something, which includes anything that hasn’t been part of my environment before and for which I’m not already adapted, is likely to be bad.
As far as your other stories go, yup, I agree both good and bad things can happen totally unexpectedly. But you have made no case regarding the relative probability. I’m saying that random unexpected (uncertain in the the sense of Knight) events, even if they are equally likely to cause wealth increase or decrease, will cause a rearrangement of wealth which, given that the original state was Pareto optimal relative to the utilities and world models of the agents, is overwhelmingly likely to be less optimal. I’ve been trying to construct a mathematical proof that this is true. But, I’m having a hard time. Which, I’ll admit, could mean that I’m wrong (or at least not strictly speaking absolutely right :-). The counterfactual is, of course, blazingly clear to you, but try as I might, I just can’t see the simplicity that you see so clearly, and remain quite convinced of my position.
In the end only math, perhaps, would be capable of closing the gap. But, barring that, cheers… The much bigger problem is that Jacques Martin is demoralizing and destroying the most brilliant defensive… You’re right. At this point that’s way more fun!
Oh, “The road to hell is paved with good intentions.” But I don’t think we can make that excuse for Jacques Martin.
K – I know you won’t believe a happy new year is really plausible, but I do wish it to you, with some god-given chance I suppose (and you’re right, I don’t assume optimality of anything at all, as I don’t know of any experiment that could either verify or falsify such a normative concept) Thanks for the proper translation – cheers!
Yvan,
Thank you! I know you won’t believe that happiness is at all meaningful, or even plausibly superior to sadness, but I nevertheless wish you une tres bonne annee!
K – this I’m afraid would take use in a discussion about the meaning of the word meaning. With a bit more God-given chance, we’ll both be reasonable enough to pass on it. Won’t we?
I say they get to the final round this year, and lose it in 6. Would you say I’m being optimistic, or pessimistic? Ok, just forget it – sorry.
The Habs are subject to neither earthly nor metaphysical constraint. As always, I remain certain of righteous triumph! I’m also certain that we can both let the matter rest on that note.