neoclassical economics

The Real Tragedy

by

In the alpine regions of Switzerland, grazing pastures typically are commons, as are forests, irrigation systems, and the paths and roadways connecting private and common property. In the belief system called economics, it is an article of faith that commons are inherently tragic. Almost by definition, they are tragic because they are prone to overuse. What belongs to all belongs to none, and only private or state ownership can rescue a commons from the sad fate that will otherwise befall it.

Environmental Ignorance Is Economic Bliss

by

In The Descent of Man, Charles Darwin wrote that “ignorance more frequently begets confidence than does knowledge.” This single line succinctly describes a recently conceptualized psychological phenomenon called the Dunning-Kruger Effect. David Dunning and Justin Kruger, two researchers from Cornell University, have concluded that there is an inverse relationship between a person’s knowledge and skill level in a particular area and the person’s self-rated ability to perform in the area. Dunning and Kruger argue that people who are unknowledgeable and unskilled at performing an activity are also unable to recognize their own incompetence, which is why they tend to overestimate the quality of their performance when asked to self-evaluate. (Likewise, those individuals who are highly knowledgeable and highly skilled tend to underestimate their performance when asked to self-evaluate.)