China Quarterly Update, June 2008
A Simple Proposal to Make Exam Grading Easier
Mike Myers 'Love Guru' movie offends some Hindus
Barack Obama is a "choice architect" aiming to implement "libertarian paternalism
Chris Blattman's Links I Liked
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Ten things for India to achieve its 2050 potential
In Turkey, Bitter Feud Has Roots in History
China’s One-Child Rule, Post-Earthquake
Pay For It: Radical Water Privatization for Poor Countries
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Advice to impressionable young minds who want to change the world
Big Picture's LinkFest
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A theory of military dictatorships
What Happens if We’re Wrong?;
The key word is “consequences.” I learned this lesson many years ago from studying Blaise Pascal, a French mathematical genius in the 17th century who spelled out the laws of probability more clearly than anyone before him. This was a thunderclap of an insight that, for the first time, gave humanity a systematic way of thinking about the future.
Pascal was both a gambler and a religious zealot. One day he asked himself how he would handle a bet on whether “God is or God is not.” Reason could not answer. But, he said, we can choose between acting as though God is or acting as though God is not.
Suppose we bet that God is, and we lead a life of virtue and abstinence, and then the day of reckoning comes and we discover that there is no God. Well, life was still tolerable even if less fun than we might have liked. Here, the consequences of being wrong would be acceptable to most people.
Suppose, however, we bet that God is not, and lead a life of lust and sin, and then it turns out that God is. Now being wrong has put us into big trouble.
RISK management, then, should be a process of dealing with the consequences of being wrong. Sometimes, these consequences are minimal — encountering rain after leaving home without an umbrella, for example. But betting the ranch on the assumption that home prices can only go up should tell you the consequences would be much more than minimal if home prices started to fall.
Stolper-Samuelson for the real world
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Steven Pinker: The evolutionary man
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Did the Iraq War Cause High Oil Prices?
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