Posted by
Andrews on Wednesday, May 27, 2009 11:44:51 PM
I have
written before about predictability and its importance, but I thought some examples, drawn from some fo my favorite topics, would show how important predictability can be.
Let us start with Wikipedia. My post "
Vindication", and all the articles it cites, give a pretty thorough description of all my complaints about Wikipedia. However, allow me to make one simple argument. Most people argue that Wikipedia is generally self-correcting. Excluding certain contentious topics, when a change is made which is wrong, or simple vandalism, it will be corrected very quickly. The evidence argues otherwise, but let us assume they are correct. Let us assume that an error posted on Wikipedia will be corrected within 10 minutes. Then it is a pretty good source, right?
Wrong. Let us assume you want to know a specific piece of information. You go to look it up, and get the answer from wikipedia. The question you must now answer is, did you get it during the ten minute window? Was the page defaced or changed to erroneous data in the last ten minutes and not yet corrected? Simply by allowing a page to be altered by anyone, at any time, wikipedia introduces the possibility the data you are seeing is wrong. Even if errors were corrected in one minute, or five seconds, there is still every chance what you are seeing is a pre-correction error.
By introducing that unpredictability, the chance, no matter how small, that what you are seeing is wrong, Wikipedia has made every bit of data absolutely worthless.
Let us turn now to liability law. Sometimes, when confronted with the most extreme excesses of liability cases, lawyers and other defenders will argue that those case are exceptions, rather than the rule. They will offer the defense that nine out of ten cases are decided under modern permissive tort law the same way they would have been under more traditional concepts of liability, or they will point to the number of times there is a finding of no liability. The implication being that there may be some abuses, but they are rare, and, on average the system works. And that should make us feel more at ease.
Which works until you are sued. Not knowing if you will be that one exception, the one excess which gets a hundred million dollar punitive damage settlement, it is very tempting to settle liability suits rather than risk being the exception. Yes, the rules still tend to work the way they used most of the time, in cases which don't settle, the plaintiffs may fail more than they succeed, but thanks to permissive new standards of proof, and excessively loose rules concerning damages, the exception can be catastrophic. And so, the uncertainty these new rules introduce, as well as possibility that even the most insane damages will withstand appeal, means that many companies will settle even absurd suits rather than roll the dice and risk so much.
I could go on, talk about how the government's ability to legislate on literally any subject causes businesses to be reluctant to commit as much as they once would. How the lack of any protection against the state making illegal what was once legal, or regulating businesses out of existence leads to sluggish investment. There are hundreds of topic where uncertainty causes negative effects.
But I think you get the picture. More than equity, more than freedom, predictability is the bare minimum required for a thriving economy. Even the most oppressive laws, provided they are predictable, can support a strong economy. On the other hand, once we introduce human whim, or simple randomness, into the law, once we allow that rights may come and go without notice, the economy suffers.
POSTSCRIPT
This is a topic I intend to revisit again in more detail, hopefully summarizing this topic the way
I promised to summarize my writing on the plans to correct the mortgage crisis. So keep an eye out for a lengthy, but comprehensive, post on the importance of predictability in every aspect of government.