How Do You Know?: The Economics of Ordinary Knowledge
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How do ordinary people come to know or believe what they do? We need an account of this process to help explain why people act as they do. You might think I am acting irrationally--against my interest or my purpose--until you realize that what you know and what I know differ significantly. My actions, given my knowledge, might make eminently good sense. Of course, this pushes our problem back one stage to assess why someone knows or believes what they do. That is the focus of this book. Russell Hardin supposes that people are not usually going to act knowingly against their interests or other purposes. To try to understand how they have come to their knowledge or beliefs is therefore to be charitable in assessing their rationality. Hardin insists on such a charitable stance in the effort to understand others and their sometimes objectively perverse actions.
Hardin presents an essentially economic account of what an individual can come to know and then applies this account to many areas of ordinary life: political participation, religious beliefs, popular knowledge of science, liberalism, culture, extremism, moral beliefs, and institutional knowledge. All of these can be enlightened by the supposition that people are attempting reasonable actions under the severe constraints of acquiring better knowledge when they face demands that far outstretch their possibilities.
recognize that voluntarism does not work very well, and that coercive laws are necessary to induce contributions of dues and efforts. It was, as noted earlier, in the context of collective action for workers that Mill recognized the logic. Samuel Gompers (1905), an early leader of the American union movement, asserted the logic clearly a century ago. He had learned the logic through extensive, no doubt painful experience, at a level most of us will never even vaguely match. Perhaps the first I
citizens from the malaise of the planned economy. The German managerial successes in World War I carried the seeds of the ruin of the Soviet world. One might respond to the claims of Austrian theory with the question: How can one show that no synoptic vision of the best social order is possible? The answer, of course, is that one cannot. The reasons for supposing that no synoptic vision will be credibly better than the best results of unplanned development of society are two. First, no such
expectations of net benefit in such a case would be statistical. I might expect a range of possible effects on me, from net losses to net benefits, but with the expected value overall of net benefits. Adopting an actual policy will be similar, in the sense that it will be based on statistical expectations of the costs and benefits of the policy. Those expectations might, again, come from a range of possible outcomes for particular individuals, with some of them losing overall while others
happens to us through the persuasiveness of the content or source. I might dearly wish to believe I lived in Bellagio several months every year, or that everyone’s life were idyllic, but it is impossible for me to believe those things. In some sense, I even have incentive to believe that everyone’s life is idyllic, because that belief would spare me various moral and political burdens. But, again, I cannot possibly believe such a thing. Yet, anthropologists have long argued that beliefs are
necessity, stand at a distance, and even the distorting effects of gravity from the mountain itself. They typically will not themselves have determined that curvature and might not even know how to mea5Poor Hume ([1739–40] 2000, book 3, pt. 2, sec. 2, ¶3) maladroitly speaks of “the partition of employments” and therefore loses paternity for our contemporary phrasing to Smith. 6This is a difficult problem. See Lehrer 1995. Ordinary Knowledge · 11 sure it. Indeed, many of these things—the