Concat: The crisis in macroeconomic policy execution

During the Great Depression, as the Bank of England and British banks were attempting to renegotiate the terms of their loans from the USA, the British sent Sir Otto Niemeyer to Australia to prevent Australia doing the same for its loans from Britain.    The injustice and unabashed hypocrisy of this – where you stood on the issue of debt repayment clearly depending on where you sat – always angered me.    Had I been around in 1932, I would have supported New South Wales Premier Jack Lang’s refusal to hand over moneys from the NSW State Government owed to the Australian Commonwealth Government for its payment of interest on NSW foreign debts.
We seem to be in for more hypocrisy and hard times, as the share-owning class, having received bailouts from western taxpayers for their investments in failed and paralyzed banks, now raise a wacka wacka huna kuna against public sector debt.    The plain people of Ireland, for example, will now be paying for the malfeasance and incompetence of their richer compatriots.
Two illuminating posts from Brad DeLong and Paul Krugman on our failed western political system, which seems unable to fix our failed economy, despite us knowing what should be done:

And here is Barry Eichengreen on the Irish bailout:

Some older articles on the crisis:


Art: Bridget Riley at the National Gallery, London

I saw an exhibition of Bridget Riley’s work in a career retrospective of her work at Sydney’s Museum of Contemporary Art some five years ago.  With what great delight her paintings shimmered, danced and cavorted across the canvas before one’s very eyes, while the waters of the sunlit Harbour did the same through the MCA’s windows!    I was reminded of this seeing the current, small exhibition of her work in the Sun-Lit Room at the National Gallery, London.  While “sunlit” is an aspirational term in London this week, her paintings, some of them painted directly onto the walls themselves, still dance before our eyes.  Robert Melville, writing in the New Statesman in 1970, expressed it  best:   “No painter, dead or alive, has ever made us more aware of our eyes than Bridget Riley.”
Morton Feldman once said of the paintings of the abstract expressionists that they only perform for you as you leave them.  “Not long ago Guston asked some friends, myself among them, to see his recent work at a warehouse.  The paintings were like sleeping giants, hardly breathing.  As the others were leaving, I turned for a last look, then said to him, “There they are.  They’re up.” They were already engulfing the room.”   (Feldman, p. 100, cited in Bernard, p. 182) Riley’s paintings are up and dancing before you even enter the room!  What pleasure these paintings give, what delight one has just being in their company!
I have posted before about the art of the national treasure who is Ms Riley, here.
Reviews of the NG exhibition here:  Hilary Spurling, Maev Kennedy, and Adrian Searle.    And images from the Exhibition here.
The image above shows two assistants of Bridget Riley painting her work Arcadia 1 directly onto the wall at the National Gallery. Photograph credit: The National Gallery.
Morton Feldman [1965]: Philip Guston:  The last painter.   Art News Annual 1966 (Winter 1965).
Jonathan W. Bernard [2002]:  Feldman’s painters.  pp. 173-215, in:  Steven Johnson (Editor):  The New York Schools of Music and Visual Arts. New York, NY, USA:  Routledge.

Your PhD viva: the snake fight

Luke Burns at McSweeney’s has written an FAQ to the “Snake Fight” portion of the PhD Thesis Defense:

Q: Do I have to kill the snake?
A: University guidelines state that you have to “defeat” the snake. There are many ways to accomplish this. Lots of students choose to wrestle the snake. Some construct decoys and elaborate traps to confuse and then ensnare the snake. One student brought a flute and played a song to lull the snake to sleep. Then he threw the snake out a window.
Q: Does everyone fight the same snake?
A: No. You will fight one of the many snakes that are kept on campus by the facilities department.
Q: Are the snakes big?
A: We have lots of different snakes. The quality of your work determines which snake you will fight. The better your thesis is, the smaller the snake will be.
Q: Does my thesis adviser pick the snake?
A: No. Your adviser just tells the guy who picks the snakes how good your thesis was.
Q: What does it mean if I get a small snake that is also very strong?
A: Snake-picking is not an exact science. The size of the snake is the main factor. The snake may be very strong, or it may be very weak. It may be of Asian, African, or South American origin. It may constrict its victims and then swallow them whole, or it may use venom to blind and/or paralyze its prey. You shouldn’t read too much into these other characteristics. Although if you get a poisonous snake, it often means that there was a problem with the formatting of your bibliography.
Q: When and where do I fight the snake? Does the school have some kind of pit or arena for snake fights?
A: You fight the snake in the room you have reserved for your defense. The fight generally starts after you have finished answering questions about your thesis. However, the snake will be lurking in the room the whole time and it can strike at any point. If the snake attacks prematurely it’s obviously better to defeat it and get back to the rest of your defense as quickly as possible.
Q: Would someone who wrote a bad thesis and defeated a large snake get the same grade as someone who wrote a good thesis and defeated a small snake?
A: Yes.
Q: So then couldn’t you just fight a snake in lieu of actually writing a thesis?
A: Technically, yes. But in that case the snake would be very big. Very big, indeed.
Q: Could the snake kill me?
A: That almost never happens. But if you’re worried, just make sure that you write a good thesis.
Q: Why do I have to do this?
A: Snake fighting is one of the great traditions of higher education. It may seem somewhat antiquated and silly, like the robes we wear at graduation, but fighting a snake is an important part of the history and culture of every reputable university. Almost everyone with an advanced degree has gone through this process. Notable figures such as John Foster Dulles, Philip Roth, and Doris Kearns Goodwin (to name but a few) have all had to defeat at least one snake in single combat.
Q: This whole snake thing is just a metaphor, right?
A: I assure you, the snakes are very real.

Coupling preferences and decision-processes

I have expressed my strong and long-held criticisms of classical decision theory – that based on maximum expected utility (MEU) –  before and again before that.  I want to expand here on one of my criticisms.
One feature of MEU theory is that the preferences of a decision-maker are decoupled from the decision-making process itself.  The MEU process works independently of the preferences of the decision-maker, which are assumed to be independent inputs to the decision-making process.    This may be fine for some decisions, and for some decision-makers, but there are many, many real-world decisions where this decoupling is infeasible or undesirable, or both.
For example, I have talked before about network goods, goods for which the utility received by one consumer depends on the utility received by other consumers.   A fax machine, in the paradigm example, provides no benefits at all to someone whose network of contacts or colleagues includes no one else with a fax machine.   A rational consumer (rational in the narrow sense of MEU theory, as well as rational in the prior sense of being reason-based) would wait to see whether other consumers  in her network decide to purchase such a good (or are likely to decide to purchase it) before deciding to do so herself.   In this case, her preferences are endogeneous to the decision-process, and it makes no sense to model preferences as logically or chronologically prior to the process.   Like most people  in marketing, I have yet to encounter a good or service which is not a network good:  even so-called commodities, like coal, are subject to fashion, to peer-group pressures, and to imitative purchase behaviors.  (In so far as something looks like a commodity in the real world, some marketing manager is not doing his or her job.)
A second class of decisions also require us to consider preferences and decision-processes as strongly coupled.  These are situations where there are multiple decision-makers or stakeholders.     A truly self-interested agent (such as those assumed by mainstream micro-economics) cares not a jot for the interests of other stakeholders, but for those of us out here in the real world, this is almost never the case.  In any multiple-stakeholder decision – ie, any decision where the consequences accrue to more than one party – a non-selfish decision-maker would first seek to learn of the consequences of the different decision-options to other stakeholders as well as to herself, and of the preferences of those other stakeholders over these consequences.  Thus, any sensible decision-making process needs to allow for the elicitation and sharing of consequences and preferences between stakeholders.  In any reasonably complex decision – such as deciding whether to restrict use of some chemical on public health grounds, or deciding on a new distribution strategy for a commercial product  – these consequences will be dispersed and non-uniform in their effects.   This is why democratic government regulatory agencies, such as environmental agencies, conduct public hearings, enquiries and consultations exercises prior to making determinations.  And this is why even the most self-interested of corporate decision-makers invariably consider the views of shareholders, of regulators, of funders, of customers, of supply chain partners (both upstream and downstream), or of those internal staff who will be carrying out the decision, when they want the selected decision-option to be executed successfully.    No CEO is an island.
The fact that the consequences of major regulatory and corporate decisions are usually non-uniform in their impacts on stakeholders  – each decision-option advantaging some people or groups, while disadvantaging others – makes the application of any standard, context-independent decision-rule nonsensical.   Applying standard statistical tests as decision rules falls into this nonsensical category, something statisticians have known all along, but others seem not to. (See the references below for more on this.)
Any rational, feasible decision-process intended for the sorts of decisions we citizens, consumers and businesses face every day needs to allow preferences to emerge as part of the decision-making process, with preferences and the decision-process strongly coupled together.  Once again, as on so many other aspects, MEU theory fails.   Remind me again why it stays in Economics text books and MBA curricula.
L. Atkins and D. Jarrett [1979]:  The significance of “significance tests”.  In:  J. Irvine, I. Miles and J. Evans (Editors): Demystifying Social Statistics. London, UK: Pluto Press.
D. J. Fiorino [1989]:  Environmental risk and democratic process:  a critical review.  Columbia Journal of Environmental Law,  14: 501-547.  (This paper presents reasons why deliberative democratic processes are necessary in environmental regulation.)
T. Page [1978]:  A generic view of toxic chemicals and similar risks.  Ecology Law Quarterly.  7 (2): 207-244.

On Monty

Montgomery Clift is one of the silver screen’s greatest actors.  I have written before about his intensely-naturalistic speaking style, with its pauses and false starts and mid-sentence hesitations and apparently improvised modifications on-the-fly.    To speak as he did, in so many films, showed that this speaking style was probably not an artefact of all the screenwriters involved, especially when so few other actors in these or other films of the time spoke like that, but instead evidence of his own great intelligence and superb ear for speech.

Amy Lawrence has now written a fascinating book on his screen acting across his career, analyzing in detail what he did and how, and how he achieved his effects.  By studying his own, hand-annotated personal copies of film scripts, for example, she is able to identify his particular contributions to the scripts and the dialogue of the films he acted in, and is able to demonstrate the artistry and diligence behind his naturalistic speech.   And to show it, in many cases, as his personal artistry, as he worked to revise and rewrite dialog that was often originally stilted or unnatural.

By careful exegesis, Lawrence is also able to debunk some myths.   Clift’s shambling, addled performance as a courtroom witness in the late Judgment at Nuremberg (1961), for example, is usually presented as evidence of the drug and alcohol addictions he is supposed to have succumbed to following his near-fatal car accident in May 1956.  This accident destroyed his face and left him in pain, and led him to taking pain-killers and to drinking.   But, as Lawrence demonstrates, his court-room appearance in the 1961 film shows many of the same personal characteristics and mannerisms of his court-room appearance in A Place in the Sun, filmed in 1951 – “tightening his fists, flexing his fingers, pushing against the armrests with his elbows” [Lawrence, p. 212].   Clearly, the origin of Clift’s witness-box performance is not drugs, but acting chops.  Speaking of the character played by Clift in Nuremberg, she says:

Peterson’s gestures are emphatic, not neurotic, but combined with his broken syntax and repetition of sentence fragments, Clift clearly suggests in his performance that the character is not in control of himself.  But the actor is.  When we see the recurrence of these gestures across time and roles, before and after the accident, it seems reasonable to call them choices characteristic of the performer.  Clift is not a mess; he plays one.” [Lawrence, p. 213]

Lawrence also notices how Clift, throughout his career, often acts with his back to the camera, either fully or partially.  These episodes usually signal that he is engaged in some intense, interior, psychological reaction to some event or person, as if he could better tell us what he is thinking by not showing us his face.   That he would even try to do something so counter-intuitive, let alone that he usually succeeds, demonstrates the great actor Clift was.

I had only one, very small quibble with Lawrence’s book.  She describes (on page 63) the scene in The Big Lift (1950) when Clift’s character, about to receive an award for helping in the Berlin airlift, turns and sees for the first time that the official award-giver is a beautiful woman.   Lawrence does not describe Clift’s eyes as he suddenly sees this woman:  his pupils dilate widely as an expression of his character’s plain delight. We know of course, that the actor Clift must have practiced and rehearsed this dilation until he could undertake it at will.   But knowing this fact increases our admiration for his acting skills, since it shows the dedication and diligence he brought to the task.

Clift’s acting art was artless, and like all artlessness, took immense preparation, intelligence, practice, and persistence to achieve.


Amy Lawrence [2010]: The Passion of Montgomery Clift. Berkeley, CA, USA:  University of California Press.

Please post your apology here, Dr.

I have mentioned before the long-standing medical trope of first blaming the victim of an illness before identifying  its real causes.      To cholera (blamed on loose morals), drug addictions (blamed on weakness of will), stomach ulcers (blamed on a personal inability to handle stress), chronic fatigue syndrome (blamed on laziness), and repetitive strain injury (blamed on deception, or even self-deception), we may soon be able to add obesity and schizophrenia.
The contemporary developed world obesity epidemic has always struck me as being too widespread and occurring too fast to be due simply to a lack of self-discipline by lots of individuals.   Current medical advice is for individuals to eat less and exercise more, advice given despite the experimental evidence showing that increasing exercise actually may increase weight (on average), rather than reducing it.    And advice given despite the fact – known for at least 150 years, since the work of Claude Bertrand – that our bodies are complex adaptive systems, whose properties do not conform to simple linear models; for example, eating less may lead the body to retain more of the nutrients of the food ingested, because of a body-weight set-point effect, and thus not lead to much weight loss at all.   We already have evidence that appetite may have  genetic determinants.  Now, it seems that the obesity epidemic may have environmental or social causes, since as well as humans in the developed world putting on weight, so too have animals.  The animal species studied include not only pets and zoo animals (whose diets may have been influenced directly by human feeding), but also wild animals living near humans.
And schizophrenia, which once was blamed on poor parenting by the mothers of patients, and later on the patient’s genes (and who, Mothers, gave them those?), may in fact be caused by a virus – a retrovirus, present in our and our ancestors’ DNA for some 60 million years.  It turns out this is the same retrovirus that is believed by some scientists to cause Multiple Sclerosis.  A virus as cause could explain why there is a persistent, and statistically significant, effect on the incidence of schizophrenia arising from the season of birth of the patient.  Neither genes nor a mother’s parenting style would be expected to be influenced by the season of birth, but virus lifecycles, activations, durations and diffusions, certainly are.
The standard line initially of the medical panjandrums on RSI was that this medical condition only seemed to affect office workers, and not others who worked a lot with their hands, such as musicians.    The implication of such a statement was that the causes of RSI could not be some objective condition, outside of the patient, and so must be internal, either psychosomatic or actually knowingly invented.  Yet, musicians for at least a couple of centuries have been suffering from RSI (or closely-related conditions), as anyone who asked them would know.
When the medical profession is ready to apologize to us all for wrongly accusing us of moral failings, weakness of will, or malfeasance, I’ll be here ready and waiting.  I’m not, however, holding my breath.

Syntax Attacks

Thanks to the ever-watchful Normblog, I encounter an article by Colin Tatz inveighing against talk about sport.  Norm is right to call Tatz to account for writing nonsense – talk about sport is just as meaningful as talk about politics, history, religion, nuclear deterrence, genocide, or any other real-world human activity.  Tatz says:

Sport is international phatic but also a crucial Australian (male) vehicle. It enables not just short, passing greetings but allows for what may seem like deep, passionate and meaningful conversations but which in the end are unmemorable, empty, producing nothing and enhancing no one.

Unmemorable?! Really?   What Australian could forget Norman May’s shouted “Gold! Gold for Australia! Gold!” commentary at the end of the men’s 400-metre swimming medley at the 1980 Olympics in Moscow.  Only a churlish gradgrind could fail to be enhanced by hearing this.   And what Australian of a certain age could forget the inimitable footie commentary of Rex Mossop, including, for example, such statements as,  “That’s the second consecutive time he’s done that in a row one straight after the other.” Mossop’s heat-of-the-moment sporting talk was commemorated with his many winning places in playwright Alex Buzo’s Australian Indoor Tautology Pennant, an annual competition held, as I recall,  in Wagga Wagga, Gin Gin and Woy Woy (although not in Woop Woop or in The Never Never), before moving internationally to exotic locations such as Pago Pago, Xai Xai and Baden Baden.  Unmemorable, Mr Tatz?  Enhancing no one?  Really?  To be clear, these are not memorable sporting events, but memorable sporting commentary.   And all I’ve mentioned so far is sporting talk, not the great writers on baseball, on golf, on cricket, on swimming,  . . .
But as well as misunderstanding what talk about sport is about and why it is meaningful, Tatz is wrong on another score.   He says:

But why so much natter and clatter about sport? Eco’s answer is that sport “is the maximum aberration of ‘phatic’ speech”, which is really a negation of speech.
Phatic speech is meaningless speech, as in “G’day, how’s it going?” or “have a nice day” or “catch you later” — small talk phrases intended to produce a sense of sociability, sometimes uttered in the hope that it will lead to further and more real intercourse, but human enough even if the converse goes no further.

Phatic communications are about establishing and maintaining relationships between people.  Such a purpose is the very essence of speech communication, not its negation.  Tatz, I fear, has fallen into the trap of so many computer scientists – to focus on the syntax of messages, and completely ignore their semantics and pragmatics.    The syntax of messages concerns their surface form, their logical structure, their obedience (or not) to rules which determine whether they are legal and well-formed statements (or not) in the language they purport to arise from.  The semantics of utterances concerns their truth or falsity, in so far they describe real objects in some world (perhaps the one we all live in, or some past, future or imagined world),  while their pragmatics concerns those aspects of their meaning unrelated to their truth status (for example, who has power to revoke or retract them).
I have discussed this syntax-is-all-there-is mistake before.    I believe the root causes of this mistaken view are two-fold: the mis-guided focus of philosophers these last two centuries on propositions to the exclusion of other types of utterances and statements (of which profound error Terry Eagleton has shown himself guilty), and the mis-guided view that we now live in some form of Information Society, a view which wrongly focuses attention on the information  transferred by utterances to the exclusion of any other functions that utterances may serve or any other things we agents (people and machines) may be doing and aiming to do when we talk.   If you don’t believe me about the potentially complex functionality of utterances, even when viewed as nothing more than the communication of factual propositions, then read this simple example.
If communications were only about the transfer of explicit information, then life would be immensely less interesting.  It would also not be human life, for we would be no more intelligent than desktop computers passing HTTP requests and responses to one another.

Distributed cognition

Some excerpts from an ethnographic study of the operations of a Wall Street financial trading firm, bearing on distributed cognition and joint-action planning:

This emphasis on cooperative interaction underscores that the cognitive tasks of the arbitrage trader are not those of some isolated contemplative, pondering mathematical equations and connected only to to a screen-world.  Cognition at International Securities is a distributed cognition.  The formulas of new trading patterns are formulated in association with other traders.  Truly innovative ideas, as one senior trader observed, are slowly developed through successions of discreet one-to-one conversations.
. . .
An idea is given form by trying it out, testing it on others, talking about it with the “math guys,” who, significantly, are not kept apart (as in some other trading rooms),  and discussing its technical intricacies with the programmers (also immediately present).”   (p. 265)
The trading room thus shows a particular instance of Castell’s paradox:  As more information flows through networked connectivity, the more important become the kinds of interactions grounded in a physical locale. New information technologies, Castells (2000) argues, create the possibility for social interaction without physical contiguity.  The downside is that such interactions can become repititive and programmed in advance.  Given this change, Castells argues that as distanced, purposeful, machine-like interactions multiply, the value of less-directd, spontaneous, and unexpected interactions that take place in physical contiguity will become greater (see also Thrift 1994; Brown and Duguid 2000; Grabhar 2002).  Thus, for example, as surgical techniques develop together with telecommunications technology, the surgeons who are intervening remotely on patients in distant locations are disproportionately clustering in two or three neighbourhoods of Manhattan where they can socialize with each other and learn about new techniques, etc.” (p. 266)
“One examplary passage from our field notes finds a senior trader formulating an arbitrageur’s version of Castell’s paradox:
“It’s hard to say what percentage of time people spend on the phone vs. talking to others in the room.   But I can tell you the more electronic the market goes, the more time people spend communicating with others inside the room.”  (p. 267)
Of the four statistical arbitrage robots, a senior trader observed:
“We don’t encourage the four traders in statistical arb to talk to each other.  They sit apart in the room.  The reason is that we have to keep diversity.  We could really hammered if the different robots would have the same P&L [profit and loss] patterns and the same risk profiles.”  (p. 283)

Daniel Beunza and David Stark [2008]:  Tools of the trade:  the socio-technology of arbitrage in a Wall Street trading room.  In:  Trevor Pinch and Richard Swedborg (Editors):  Living in a Material World:  Economic Sociology Meets Science and Technology Studies. Cambridge, MA, USA: MIT Press.  Chapter 8, pp. 253-290.
M. Castells [1996]:  The Information Age:  Economy, Society and Culture. Blackwell, Second Edition.


‘The best thing for being sad,’ replied Merlyn, beginning to puff and blow,  ‘is to learn something. That is the only thing that never fails. You may grow old and trembling in your anatomies, you may lie awake at night listening to the disorder of your veins, you may miss your only love, you may see the world about you devastated by evil lunatics, or know your honour trampled in the sewers of baser minds. There is only one thing for it then – to learn. Learn why the world wags and what wags it. That is the only thing which the mind can never exhaust, never alienate, never be tortured by, never fear or distrust, and never dream of regretting.’ “

Merlyn speaking to Wart in T. H. White’s The Sword in the Stone.

Good decisions

Which decisions are good decisions?
Since 1945, mainstream economists have arrogated the word “rational” to describe a mode of decision-making which they consider to be best.   This method, called maximum-expected utility (MEU) decision-making, assumes that the decision-maker has only a finite set of possible action-options and that she knows what these are, that she knows the possible consequences of each of these actions and can quantify (or at least can estimate) these consequences, and can do so on a single, common, numerical scale of value (the payoffs), that she knows a finite and complete collection of uncertain events that are possible and which may impact the consequences and their values, and knows (or at least can estimate) the probabilities of these uncertain events, again on a common numerical scale of uncertainty.  The MEU decision procedure is then to quantify the consequences of each action-option, weighting them by the relative likelihood of their arising according to their probabilities of the uncertain events which influence them.
The decision-maker then selects that action-option which has the maximum expected consequential value, ie the consequential value weighted by the probabilities of the uncertain events. Such decision-making, in an abuse of language that cries out for a criminal charges, is then called rational by economists.   Bayesian statistician Dennis Lindley even wrote a book about MEU which included the stunningly-arrogant sentence, “The main conclusion [of this book] is that there is essentially only one way to reach a decision sensibly.”

Rational?  This method is not even feasible, let alone sensible or good!
First, where do all these numbers come from?  With the explicit assumptions that I have listed, economists are assuming that the decision-maker has some form of perfect knowledge.  Well, no one making any real-world decisions has that much knowledge.  Of course, economists often respond, estimates can be used when the knowledge is missing.  But whose estimates?   Sourced from where?   Updated when? Anyone with any corporate or public policy experience knows straight away that consensus on such numbers for any half-way important problem will be hard to find.  Worse than that, any consensus achieved should immediately be suspected and interrogated, since it may be evidence of groupthink.    There simply is no certainty about the future, and if a group of people all do agree on what it holds, down to quantified probabilities and payoffs, they deserve the comeuppance they are likely to get!
Second, the MEU principle simply averages across uncertain events.   What of action-options with potentially catastrophic outcomes?   Their small likelihood of occurrence may mean they disappear in the averaging process, but no real-world decision-maker – at least, none with any experience or common sense – would risk a catastrophic outcome, despite their estimated low probabilities.   Wall Street trading firms have off-street (and often off-city) backup IT systems, and sometimes even entire backup trading floors, ready for those rare events.
Third, look at all the assumptions not made explicit in this framework.  There is no mention of the time allowed for the decision, so apparently the decision-maker has infinities of time available.  No mention is made of the processing or memory resources available for making the decision, so she has infinities of world also.   That makes a change from most real-world decisions:  what a pleasant utopia this MEU-land must be.  Nothing is said – at least nothing explicit – about taking into account the historical or other contexts of the decision, such as past decisions by this or related decision-makers, technology standards, legacy systems, organization policies and constraints, legal, regulatory or ethical constraints, or the strategies of the company or the society in which the decision-maker sits.   How could a decision procedure which ignores such issues be considered, even for a moment, rational?   I think only an academic could ignore context in this way; no business person I know would do so, since certain unemployment would be the result.  And how could members of an academic discipline purporting to be a social science accept and disseminate a decision-making framework which ignores such social, contextual features?
And do the selected action-options just execute themselves?  Nothing is said in this framework about consultation with stakeholders during the decision-process, so presumably the decision-maker has no one to report to, no board members or stockholders or division presidents or ward chairmen or electors to manage or inform or liaise with or mollify or reward or appease or seek re-election from, no technical departments to seek feasibility approval from, no implementation staff to motivate or inspire, no regulators or ethicists or corporate counsel to seek legal approval from, no funders or investors to raise finance from, no suppliers to convince to accept orders with, no distribution channels to persuade to schedule throughput with,  no competitors to second-guess or outwit, and no actual, self-immolating protesters outside one’s office window to avert one’s eyes from and feel guilt about for years afterward.*
For many complex decisions, the ultimate success or failure of the decision can depend significantly on the degree to which those having to execute the decision also support it.  Consequently, the choice of a specific action-option (and the logical reasoning process used to select it) may be far less important for success of the decision than that key stakeholders feel that they have been consulted appropriately during the reasoning process.  In other words, the quality of the decision may depend much more on how and with who the decision-maker reasons than on the particular conclusion she reaches.   Arguably this is true of almost all significant corporate strategy decisions and major public policy decisions:  There is ultimately no point sending your military to prop up an anti-communist regime in South-East Asia, for example, if your own soldiers come to feel they should not be there (as I discuss here, regarding another decision to go to war).
Mainstream economists have a long way to go before they will have a theory of good decision-making.   In the meantime, it would behoove them to show some humility when criticizing the decision-making processes of human beings.**
Notes and Bibliography:
Oskar Lange [1945-46]:  The scope and method of economics.  The Review of Economic Studies, 13 (1): 19-32.
Dennis Lindley [1985]:  Making Decisions.  Second Edition. London, UK: John Wiley and Sons.
L James Savage [1950]: The Foundations of Statistics.  New York, NY, USA:  Wiley.
* I’m sure Robert McNamara, statistician and decision-theory whizz kid, never considered the reactions of self-immolating protesters when making decisions early in his career, but having seen one outside his office window late in his time as Secretary of Defense he seems to have done so subsequently.
** Three-toed sloth comments dialogically and amusingly on MEU theory here.