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Decisions

Have you ever wondered why there is such a disconnect between big-government policy makers in Washington and the rest of us?  The reason, I think, is a fundamental difference between the values of the political class and ours.  To get to the bottom of it, we’ll need to dig into what it means to make a decision.  Along the way we’ll learn about skydiving, health insurance, and how to win the lottery without even playing.

Edmund Burke in his Letter to a Noble Lord 1796 (w/t Mark Levin 8/5/09 (mp3), NRO’s Yuval Levin May 22, 2009) wrote about Change:

I knew that there is a manifest marked distinction, which ill men, with ill designs, or weak men incapable of any design, will constantly be confounding, that is, a marked distinction between Change and Reformation. The former alters the substance of the objects themselves; and gets rid of all their essential good, as well as of all the accidental evil annexed to them. Change is novelty; and whether it is to operate any one of the effects of reformation at all, or whether it may not contradict the very principle upon which reformation is desired, cannot be certainly known beforehand. Reform is, not a change in the substance, or in the primary modification of the object, but a direct application of a remedy to the grievance complained of. So far as that is removed, all is sure. It stops there; and if it fails, the substance which underwent the operation, at the very worst, is but where it was.

There are those willing to discard an imperfect societal structure, accepting as surety the unknown worth of some new structure solely because of its newness.  I often summarize this essential aspect of modern leftist liberalism as “baby, bathwater: some disassembly required.”

What Burke was really talking about is the Expected Outcome of a decision.  But before we talk about Expected Outcome, what is it to make a decision?

A decision is the selection of one option from among two or more. Every decision has a set of effects.

When we decide something, even if we choose the status quo, we have selected a set of effects we prefer over the effects of either not making the decision or making a different one. Some effects are known ahead of time, but others only reveal themselves later.  We may not even ever know all the consequences of a decision, but whether we ever connect them or not, they occur.

So when it comes time to make a decision, how do you do it?  Most of the time, without knowing it people use Expected Outcome calculations.

The Expected Outcome of a decision is the sum of each of its effects multiplied by the probability of achieving that effect.

For instance, the expected outcome of playing the lottery is the certainty of the cost of buying the ticket and the probability of winning various prizes.  But there is a second, hidden cost: the time value of the money if invested at interest.   Typically, the odds of winning a State lottery are such that every $10 spent earns about $6.67.  While it’s true that someone has to win, many, many more will lose.  That makes the lottery a very poor investment, because the expected outcome of playing is to lose money.

And there is yet another hidden cost to playing the lottery: it is an admission of defeat.  Playing the lottery enforces the belief in players that their best path to success is a get rich quick fantasy, rather than hard work and prudent investment.  Playing the lottery is a rejection of virtue. The best way to win the lottery is not to play at all.

Another example is skydiving.  It costs a certain amount of money to skydive.  There is an investment of time and money preparing equipment and acquiring training before the first jump, and then ongoing maintenance costs.  But the primary figure is the certainty of a real thrill in jumping out into the air and entering free fall, then acquiring terminal velocity. There is, however, a small chance, say 1 in 10,000, of Something Bad happening.  Since the particular kinds of Something Bad that happen to skydivers are to me orders of magnitude worse than the thrill involved, I choose not to jump from airplanes.

A counterbalance, of course, would be if skydiving allowed me to defend something worthy of the risk of death, such as the sovereignty of my country or the life of someone else.  As pure recreation, it’s foolhardy, in terms of the math involved.  That some otherwise sane people do it reflects their values: the thrill of risk and the demonstration of courage over the potential loss of life and limb.

So why am I writing this on a political blog? Because when it comes to enacting new programs, an Expected Outcome decision-making model is essential. In the current spate of leftist bills for the health insurance government takeover and the cap and tax monstrosity, each has a huge number of effects. I list only a few below:

  • Health Insurance Government Takeover:
    1. Increasing numbers of people cared for by government
    2. Funding for abortions
    3. End of life suggestive counseling
    4. Loss of freedom
    5. Economic meltdown
  • Cap and Tax
    1. Increased energy costs
    2. No effect on climate
    3. Loss of freedom
    4. Economic meltdown

For the Left, these effects are uniformly positive or of dismissible concern. The trouble is, of course, that the effects are not uniformly positive and are of such great likelihood that they should not be dismissed.  Furthermore, for each proposal there are several effects for each person in the country, literally billions of effects.  The downside for many of these effects is incalculably bad, and of each there is an almost certain likelihood.

For those inside the Beltway, the appearance of activity is usually sufficient grounds for making some decision. The fallacious logic goes  “Something must be done; this is something; therefore this must be done.”

Making sweeping changes to large sections of our society and economy without first trying to reform them is, as anyone who knows not to play in traffic or invest in the lottery knows, the essence of folly.  These changes can only be undertaken by those who value the appearance of activity over proper work, or who value disruption and loss of prosperity for its own sake.

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