Sunday, January 10, 2016

Numbering the Unquantifiable

I have a small problem whenever I speak to pain doctors. And, unfortunately, I speak to them frequently. They inevitably ask me at some point to describe my pain in terms of a "scale from 1 to 10". At that point, I always try to explain to them that, because I have had a number of rather painful experiences -- pretty nasty 3d degree burns, a mishap with contrast dye in my lower spine pressing on various nerves, etc -- I tend to rate pains others would call a 9 or 10 a bit lower. Yet, even after that explanation, if I say my pain is a 6 or 7, they act as if it weren't that severe. And so, I have learned to simply lie, and always declare my pain  9 or 10, as otherwise they don't get the fact that I am in pretty serious pain.

I bring this up because the often used "pain scale" is another attempt to do something I have discussed before*, put hard numbers to something highly subjective. Now, I know it is not really supposed to be absolute, the original intent was to gauge the patient's discomfort and, more importantly, determine whether treatment was making it better or worse. However, doctors seem to have forgotten that, as shown in my case. Even when I explain my 7 is probably another's 10, when I say my pain is a 7, they think it is relatively moderate. In other words, they have forgotten the subjective nature of pain, and begun to treat it as an absolute scale. "If pain is over 8, give medication", or something similar.

This problem, the impossibility of assigning cardinal numbers (rather than ordinal rankings) to human experiences, is why so many attempts at "scientific management" of humans, be it some sort of Skinnerean social control or communist planning of production, have failed. We simply cannot give numeric values to wishes, wants and desires, any more than we can to sensations. I may know I love Mary more than Jane, but I can't say I love her six times more, and certainly not 4.2953 times more. Yet, for these attempts at social planning to work, it is precisely that level of quantitative analysis that is needed.

Economics is especially prone to this failing, as we can see all around us. Because it deals with so many quantifiable aspects, from monetary values to quantities of goods, from periods of time to numbers of workers, economists begin to believe that they can truly predict what will happen with certainty, that those charts and graphs do tell them what would be the optimal manner in which to run the economy.

What they forget is that all those numbers are simply the eternal expression of our collective desires. That the economy is subject to, driven by, and intended to fulfill, subjective human wants, and, no matter how well numbers may describe the processes themselves, they are a poor fit when trying to determine what individuals want. And thus, inevitably, those who propose to "scientifically manage" the economy, to bring about greater efficiency, endless bounty for all, a continual state of growth and so on, end up producing results worse than those they were trying to fix.

If you doubt me, think about this. The single greatest depression in US history, and in world history, began less than 20 years after the US established the Federal Reserve to "manage currency" and prevent the "boom-bust cycle". It also came not too many years after most of the nations of Europe and North America decided to standardize their currencies, base them all upon the British pound (which was partly based on the US dollar), to bring "rational management" to money. Or, if that is not enough, how about 1971-1973 when Nixon eliminated the gold standard to allow for "more rational money management", resulting in our worst period of prolonged inflation coupled with stagnant growth, and followed to the present day by a seemingly accelerating boom-bust cycle, with far more crashes in the past 40 years than were experienced in the period from 1776 to 1917.

 Or let us look at another are of scientific management, Keynes' claim that employment and unemployment levels can be controlled by manipulating interest rates. Ever since our government bought into this theory, there has been greater continual unemployment than in any period prior. Of course, even prior to that period, attempts to "help workers", through providing unions extra powers to achieve a "living wage", minimum wage laws, unemployment insurance and the like created our first real experience of continual, large scale unemployment, rather than the normal "frictional" unemployment of a few percent.

I could go on, but I have documented case after case elsewhere**, so I will not bother repeating myself. The simple fact is, attempts to scientifically manage society, be it economic or social, to try to reach some calculated optimal state, inevitably end up producing nothing but disaster. And it is due, at least in part, likely in whole, or close to it, to the simple fact that subjective valuation cannot be quantified.

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* See "False Precision" and "'True' Prices".

** See "When Help Hurts", "When Help Hurts II", "Perverse Incentives", "Denying Reality", "Peanut Butter and Disability", "Subsidizing Irresponsibility and Poor Planning", "Consumer Protection, Cartels and the Failure of Regulation", "Social Security is Not Insurance", "Why Borrower Forgiveness is Both Wrong and Dangerous", "What Is Wrong With a Prebate?", "Welfare For Malibu Residents",  "Utopianism and Disaster", "The Threat of Perfection", "Perfectionism and Authoritarianism", "The Inherent Disappointment of Authoritarianism", "Of Wheat and Doctors", "Every Kid Likes Hot Dogs", "Too Much and Too Little", "De Gustibus Non Disputandum Est", "Misunderstanding the Market", "The Interests of Labor Verus the Interests of Laborers", "The Consumption Curve", "Greed and the Price of Oil", "Price Gouging", "Put Your Money Where Your Mouth Is, Or The Logical Implications of Price Gouging Laws", "The Rubber Yardstick", "Bad Economics Part 19", "The Basics", "Competition", "The Case for Small Government" and "Life Is Not Fair - And Trying To Make It So Makes Things Worse".


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POSTSCRIPT

I realize some of my examples do not appear to be examples of quantification gone wrong, but in truth, there is some degree of misguided quantification in every case. In the case of unemployment, there is the minimum wage, a silly effort to quantify what is a "living wage", based upon some arbitrary calculation farther removed from reality by political haggling as it is made into law. In the case of unemployment insurance there is the idea that workers need a certain percentage of income as support for a set time to find a job. And so on. Of course, even without quantification, these actions would be failures. If we provided arbitrary values for each, it would be just as disastrous. The point is, quantification leads one to formulate these destructive solutions, and believe they are a rational solution, and thus, even if the same solutions could come about without quantification, it is quantification that often either leads us to adopt them, or justifies them once proposed, and thus the improper use of numbers is a threat in itself.

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