Thursday, May 6, 2010

The Knowledge Problem

The current discussion surrounding the Gulf oil rig spill provides a stark example of both the knowledge problem and the consequence of a constructivist reaction to this event. The original post and reply below illuminate pitfalls of assuming foresight - a constructivist would clearly argue that this event was foreseeable (I can foresee my death with absolute certainty - just not the manner and time).

But I'd be curious if anybody had worked out the negative externalities associated with each barrel of oil pumped in the Gulf of Mexico, given probabilities associated with events like this. Along these lines, here's an interesting quote from today's Economist:

...Nancy Kinner, co-director of the Coastal Research Response Centre at the University of New Hampshire, explains that oil rigs rarely have accidents: "The risk might be one in 1,000, or one in 2,000." Of course, she adds, there are hundreds of rigs out there. This spill might be shocking; but it was hardly unforeseeable.


But we will ever know the truth about the real impact and cost of the spill because the media has a bias and a vested interest in making it appear as awful as possible. Clean water doesn't lend itself easily to a Pulitzer Prize.

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