Friday, August 31, 2012

re-writing history

The following quote is from Acemoglu & Robinson's blog:

 This is not to deny that ideology and ignorance play a role in the fates of nations. For example, clearly, if European leaders at Maastricht knew the problems that single currency and implicit bailout guarantees to financial markets on sovereign debt of peripheral countries would create, they would not have opted for it, instead choosing another path to increasing integration in Europe.

 I don't think this is right at all. Plenty of economists (both liberal and conservative) were pointing out that Europe was not an optimal currency area and that the single currency wouldn't work.

Instead, I'd say arrogance and over-confidence often play important roles in the fates of nations and the Euro is a prime example.

Other examples? What gets us into trouble more often, ignorance or arrogance?


4 comments:

Anonymous said...

The two biggest players in the Euro zone tried to conquer the rest of the continent a combined three times. This time there is no balance from the U.K. and Russia.

Jim Oliver said...

It is not what you know you don't know that get you in trouble. It is what you think you know but is wrong.

Dr. Tufte said...

Perhaps the question is wrong.

Don't you think that many arrogant people are ignorant of their own arrogance? Most of us profs fall into this group. Politicians too.

Alternatively, aren't there also people who are arrogant about their own ignorance? The poster child here is Hillary in 2008 saying she "didn't want to throw her lot in with economists" when discussing a facet of her economic policy.

Tom said...

Lucky us; we don't have to choose. Our politicians (on average) are supremely arrogant and embarrassingly ignorant.