My thesis is that the only reason stupidity can destroy the world is it being coupled with the agnecy problem.
Agency problem: when others have an interest different from us, and they decide for us.
We hear all the time about stupidity. And stupidity is rampant. But stupidity cannot explain all dumbness of the world.
Do stupid people not go to certified heart Doctors? they do.
Do stupid people buy smart phones that do not work? (or Windows phones that have no apps on offer?) of course not.
Society and markets have ways of filtering information.
The various phone sellers in order to keep their reputation, are not going to cheat too deeply on customers. The cellular companies know they will not get away with selling snake oil phones (they can come close).
Sometimes, the self interests of the agents is aligned with ours.
A captain on a ship will drown with the ship. A politician starting an atomic war might get obliterated in it.
But a money manager can reap his fee while the customer loses.
A politician elected in the primary method can appeal to extremists to become the party chief. Even if this will mean to destroy the party (It happens on the right and on the left).
Agency *is* the illness. Not stupidity alone.
IF the agency problem is solved, stupidity alone cannot kill us.
---- IMPLICATIONS ------
Too many. Those will be a subject of later blog posts. Many of them. You were warned
Agency problem: when others have an interest different from us, and they decide for us.
We hear all the time about stupidity. And stupidity is rampant. But stupidity cannot explain all dumbness of the world.
Do stupid people not go to certified heart Doctors? they do.
Do stupid people buy smart phones that do not work? (or Windows phones that have no apps on offer?) of course not.
Society and markets have ways of filtering information.
The various phone sellers in order to keep their reputation, are not going to cheat too deeply on customers. The cellular companies know they will not get away with selling snake oil phones (they can come close).
Sometimes, the self interests of the agents is aligned with ours.
A captain on a ship will drown with the ship. A politician starting an atomic war might get obliterated in it.
But a money manager can reap his fee while the customer loses.
A politician elected in the primary method can appeal to extremists to become the party chief. Even if this will mean to destroy the party (It happens on the right and on the left).
Agency *is* the illness. Not stupidity alone.
IF the agency problem is solved, stupidity alone cannot kill us.
---- IMPLICATIONS ------
Too many. Those will be a subject of later blog posts. Many of them. You were warned
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