Predicting the unpredictable - again!

A must-read about Kyoto and the subject of global warming and climate change. A little story taken there from:

It is tempting to draw a comparison with the experience of mathematical models in economics. Their use was the subject of discussion in the first half of the last century between pro-market economists on the one side and pro-planning economists on the other. It was one of the most crucial debates that has ever taken place in economic science. It was conducted between Ludwig von Mises and Friedrich von Hayek of the so-called Austrian school on the one hand and Oskar Lange and Abba Lerner on the other. The central question was whether it was possible to make economic calculations in a socialist-planned economy. Lange was a proponent of market socialism with state ownership of the means of production, as embodied in the Soviet planned economy.

Using mathematical models and computers, the planned economy was supposed to be able to imitate the market and thereby solve the problem of economic calculation, according to Lange. Mises and Hayek believed that such a system could never function satisfactorily. They emphasized the importance of private ownership, in particular of the means of production, as a necessary precondition for price formation. Without personal property, there are no markets. If there are no markets, there is no price formation. And if there is no price formation, people lack the information to act in an economically rational way, with large-scale waste of resources as a result.

Thanks to the collapse of communism with its central planned economy, the debate was settled in the late 1980s in favor of Mises and Hayek. But, before that time, even many western economists had great confidence in the forecasting value of economic models. They recognized that these were not yet perfect, but believed that the shortcomings at that time could be remedied through further development of statistics, econometrics and the use of powerful computers. However, especially during the stagflation of the 1970s, economic models demonstrated that they were less and less able to explain and predict economic reality. This made economists increasingly aware of the fundamental limitations of the model-based approach to the economy. Will climatologists eventually also come to the same conclusion?

A truly brilliant analogy! When will man accept his limitations when it comes to predicting the unpredictable? The socialists of the 20th century didn't. The believers of global warming can't today, and all real data works against them. What is left is the simple belief that the world must in some way be coming to an end, and that it's man's fault.

I must repeat: A must-read.

...and to prevent any misunderstanding: That of doubting the need for today's Kyoto and the existence of any significant man-made global warming is not doubting the need to take care of the environment and monitoring behaviour in Earth's climate. However, a drop of blood doesn't always have to mean an open-heart surgery! Sometimes a plaster is enough.