NIGHT FLIGHT ACROSS A BLUE SKY: PROGNOSTICS

The purpose of this presentation is to gain new perspectives on pest control and related phenomena. Some will call it “blue sky.” I would claim it informal futuristics. Systems men call such efforts feedforward; others grandify it with “prognostics.” Some say prognostics is one of the leading challenges of the day. We must anticipate future developments and imagine or invent new alternatives as a background for rational choice. The activity can influence today’s decisions, modify our concepts of risks and probable payoffs, and can help those of us who ask: “What am I really doing; what should I be doing?”

The Myth of the Rational Market: Nudging Each Other Away from Fool’s Gold

A flurry of media commentary and several new books are focused on the recent financial crisis and near economic collapse. A Newsweek article by Zakaria (2009), “Greed is Good (To a Point),” suggests reconsidering the role of greed in capitalism. This is also the theme in Fools Gold (Tett, 2009), a story about the way derivatives markets have evolved: showing greed at its worst. In many ways this is the core source of the current set of problems. In some sense, these perspectives are integrated in The Myth of the Rational Market by Fox (2009), who traces the thinking on the efficient market hypothesis, now understood for what it is: a myth. Both books are based in large part on interviews with major players in the crisis. There are also books drawing mainly on science, but still quite accessible to general readers, as represented in Nudge by Thaler and Sunstein (2008). Both have done extensive research on human foibles in economic choice. There is also Animal Spirits (Akerlof and Schiller, 2009), a book about what Keynesian economics is really about, a look at human forces at work. Akerlof is a Nobel prize winner in economics, who before this has pointed to the problems with presuming rationality in real markets. Schiller is one of the few economists who predicted these events.