The fallacy of conventional wisdom

Published on: 2008-9-8

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The fallacy of "conventional wisdom"


Most of our existing economic theory (at least in the United States and other traditional bastions of capitalist philosophy), attempts to simplify the motivation problem by reducing the complex and subtle behavior of human psychology to that of a purely selfish and rational “economic automaton”. This is, of course, an incredible oversimplification, even though, in the case of the monetary exchange economy, it is frequently predictive of broad trends, even where it is not accurate in detail. Six impossible things before breakfast Social/economic problems often have a very "fuzzy" nature with lots of inputs to be considered with different "weights" before any solution can be formulated; and the solutions have to be continuously monitored to judge their effectiveness and corrective action taken. Commons based "peer production" has started working very effectively on a massive scale in the digital world and it is time for us to check whether our "conventional wisdom" based on assumptions about the brick-and-mortar world is good enough for the new world of massive interconnectivity!