Human Judgment and Social Policy

Hammond does a brilliant job of showing how the uncertainty (the information set upon which decisions will be evaluated and choices made is at all times partial in nature and can never be complete)of the available information available to government and public policy administrators very often offers a cogent explanation for the constant mistakes and failures of expert opinion throughout history.For example,his discussion of Irving Fisher(the leading American economic expert from 1910-1929)and,from retrospect,his incredible misjudgment of the state of both the world and American economy in late October,1929,is shown to be commonplace.The experts are experts,but they are also unduly overconfident and overoptimistic about the range of application of their limited knowledge base in a world that is inherently uncertain.Much of what Hammond's says has ,in a more general framework,been said and emphasized by John Maynard Keynes.Joseph Schumpeter also made the same points,but underestimated the dangers of such uncertainty to any kind of decision maker,private or public.Hammond offers some suggestions about ways in which policy makers can have a better chance of succeeding in their goals.Administrative coordination and the avoidance of making crucial decisions at a time of undue stress or pressure are mentioned and discussed.One writer who is missing from Hammond's references and has a valuable understanding of the turbulence of markets and the fact that the unexpected,unexpected that is by conventional economist models,occurs all too often,is Benoit Mandelbrot.Perhaps his work could be integrated in a future edition by Hammond within his framework of irreducible uncertainty.