31 May 2007

The Knowledge Problem--An Inconvenient Constraint on Would-Be Social Engineers

Given the predominantly leftist tilt of most university faculties--at least in economics and social sciences--it is not surprising that many students and recent graduates have not become acquainted with "the knowledge problem" in economics.

The problem dates to the economists Ludwig von Mises and Friedrich Hayek. The problem has been explicated further by Thomas Sowell, in the book Knowledge and Decisions (Sowell's best book in my opinion).

The knowledge problem is stated various ways, but it boils down to describing the immense difficulty in implementing a centrally planned economy when more than one person is involved--much less when millions or hundreds of millions are involved. Think of it as the "two body problem" from physics transferred to the economic realm, except far less tractable.

A lot of students and recent graduates refer to circumstances where socialism or communism are "proven to have worked". Unfortunately, most of them are unacquainted with the knowledge problem. An economic system comprising more than one participant rapidly gains complexity in determining the value of various economic transactions.

Whether a person wants to found their own socialist country, or build a working artificial intelligence, they must come face to face with the knowledge problem (KP), and they must learn to accomodate the constraints the KP presents.

For those who are serious about writing meaningful articles and books on the topic of hyper-complex entities such as economies or intelligences, acquainting themselves with the KP would be a useful side area of study that would reap huge benefits. Anyone who neglects a deep and meaningful investigation of the knowledge problem will pay dearly for the neglect.

I will try to work in more information on this topic in other postings.

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“During times of universal deceit, telling the truth becomes a revolutionary act” _George Orwell

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