Journaltalk - Religion, Heuristics, and Intergenerational Risk Management

Religion, Heuristics, and Intergenerational Risk Management

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Author
  • Rupert Read and Nassim Nicholas Taleb
Volume Number 11
Issue Number 2
Pages 219-226
File URL Religion, Heuristics, and Intergenerational Risk Management
Publication year 2014

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Publisher INST SPONTANEOUS ORDER ECONOMICS
Grouping social sciences
Categories economic, economics

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4 comments

  1. Links to discussions of debt from non-Abrahamic lineages:

    http://www.academia.edu/1122076/Buddhist_Explanations_on_the_Fundamental_Factors_of_Debts

    http://www.accesstoinsight.org/tipitaka/an/an06/an06.045.than.html

    Buddhist Monks and Business Matters: Still More Papers on Monastic Buddhism … By Gregory Schopen

    posted 30 May 2014 by Tom Garnett

  2. Though I disagree with its economic approach, this is a perceptive article. Much of religion is about teaching humility: I am not God. We are not even gods. And, religions say, this is true even if you’re very smart and even if you’re a king. The virtue of humility is express in Christianity, but it’s implicit in a lot of religions. And it enters through Providence—- natural laws and the ordinary workings of the world—- as well as directly. THink of Rudyard Kipling’s poem, The Gods of the Copybook Headings, http://www.kiplingsociety.co.uk/poems_copybook.htm (“copybook heading” means a wise, often trite, sentence used for children to practice their handwriting).

    posted 05 Jun 2014 by Eric Rasmusen

  3. On the Modigliani-Miller Theorem:
    “Economists calling this result a “theorem” when it is fragile to change of assumptions caused it to be taken more seriously than was warranted.” Actually, a statement is a theorem ONLY if it is fragile. The idea of a theorem is that you specify the exact conditions under which the conclusion is true. The most satisfactory theorems, for theory, say, “If and only if X is true, then Y is true also.” The MM theorem says that capital structure doesn’t matter under certain conditions, including that there is no corporate income tax and no moral hazard. The problem is with people who don’t know what “theorem” means and who think of mathematics and science as magic rather than ways of thinking, or who know better but are trying to fool less sophisticated people (which was more important in the case of the Li copula formula is still unclear to me).

    posted 06 Jun 2014 by Eric Rasmusen

  4. This article suffers from several flaws. First, the authors fail to make a compelling case for religion as a mechanism to avoid “silent risks.” The only case noted is debt, and a strict prohibition on debt might well prevent debt-related catastrophic failures, but given the centrality of credit and debt to the world economic system, this seems like a disproportionate “cure.” Furthermore, the authors give us no mechanism, other than perhaps the most stubborn conservatism, how religion per se actually would prevent silent risk.

    The most glaring problem, though, is that the authors fail to offer a good definition of religion. They point out that religion shares features of every social institution, i.e. intergenerational propagation of norms, but fail to adequately distinguish religious from secular institutions beyond mentioning the label “God.” But what do they actually mean by “God”? Their preamble is unhelpful: what precisely do they mean by “true religion” and “genuine spirituality”? The authors are silent.

    Finally, the authors insistence on the irrelevance of the epistemic basis of religion, indeed even of its truth, seems deeply problematic. Should we not try to understand how and why systems of ideas (i.e. ideologies) work and don’t work? Should we not make our best effort, albeit imperfectly, to base our worldview on truth? Is the understanding that some ideologies rest on obviously untrue beliefs about the world not at least raising an important problem? The authors’ handwaving away of epistemic analysis seems also in contrast to Taleb’s other work, which offers a sharp and perspicacious critique of the epistemic problems in science, and especially economics and political economy.

    I have a more thorough analysis on my blog: Religion as risk management

    posted 29 Jul 2014 by Larry Hamelin

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