With this article in Sunday’s Washington Post, economist Robert Shiller becomes a probationary member in my growing pantheon of intellectual gods heroes.
Shiller first appeared on my radar last year when all this mess was really emerging. His work (which incorporates a lot of psychology) resonated strongly with the questions I’d been asking since 2000, and some of his ideas helped me develop my own answers. Now it’s clear that his thinking and my thinking go along very similar lines, perhaps in part because of indirect encouragement from his work.
Consider my claim last week that the financial crisis is an innovation problem (I had Peter Drucker in mind when I wote it, not Rober Shiller), and compare to the claim made by Shiller in this video (which is a month or two old, but I hadn’t found until a moment ago) that “so much of what happened in this crisis was due to the failure of information to be transmitted” (at the 14 minute mark).
I haven’t looked much into his new book yet, The Subprime Solution (though I certainly will now… and I see the front cover features an endorsement from the other newest member of my pantheon, who I also found last fall, Nassim Nicholas Taleb), but it’s obvious that information is a significant part of Shiller’s “solution”:
First, improving the financial information infrastructure so that the greatest number of people can avail themselves of sound financial practices, products, and services. This means delivering enhanced financial information, better financial advice, and greater consumer protection to larger segments of society, and also implementing an improved system of economic units of measurement… [from the introduction]
Now don’t assume I’m copying or going along with whatever Shiller says. My ideas extend even further, beyond the professional economists’ paradigm of “incentives” towards a more value-neutral and universal paradigm of — well that’s what I’m still trying to figure out.
In the mean time, being able to refer (or defer?) to Shiller on the current crisis frees up my energy to work on wider challenges.
Again, read the Washington Post article — which I can’t recommend highly enough. Like me, Shiller was a skeptic back when everyone was an “irrationally exuberant” optimist, and he’s now one of the optimists when most people are starting to panick.
