Following up on Pete and Steve's earlier posts on the disaster in Japan, yesterday L. Gordon Crovitz had a piece at WSJ.com on natural disasters and information. Crovitz draws on Hayek to explain why natural disasters are so difficult to predict. Here is a key excerpt which opens with a quote from Hayek's "The Pretence of Knowledge"
"Unlike the position that exists in the physical sciences, in economics and other disciplines that deal with essentially complex phenomena, the aspects of the events to be accounted for about which we can get quantitative data are necessarily limited and may not include the important ones," he said. That makes it impossible to produce simple and reliable forecasts.
Hayek was not addressing nuclear power in particular, but his broader lesson helps put the Japanese events in context. "In the physical sciences it is generally assumed, probably with good reason, that any important factor which determines the observed events will itself be directly observable and measurable," he said. That is because the "great and rapid advance of the physical sciences took place in fields where it proved that explanation and prediction could be based on laws which accounted for the observed phenomena as functions of comparatively few variables—either particular facts or relative frequency of events. This may even be the ultimate reason why we single out these realms as 'physical.'"
But at least some physical systems turn out to be so complex that they resemble unpredictable social sciences more than the certainties of simpler physical science.
In short, should we be more fearful because the engineering at the Japanese nuclear facilities worked as planned, or because the plan assumed more predictability than was possible?