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	<title>The Harvard Law School Forum on Corporate Governance</title>
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	<title>Beware the Idolatry of Numbers &#8211; The Harvard Law School Forum on Corporate Governance</title>
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		<title>Beware the Idolatry of Numbers</title>
		<link>https://corpgov.law.harvard.edu/2009/08/19/beware-the-idolatry-of-numbers/?utm_source=rss&#038;utm_medium=rss&#038;utm_campaign=beware-the-idolatry-of-numbers</link>
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		<pubDate>Wed, 19 Aug 2009 13:27:23 +0000</pubDate>
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				<category><![CDATA[Financial Crisis]]></category>
		<category><![CDATA[Financial Regulation]]></category>
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		<description><![CDATA[(Editor&#8217;s Note: This post by Ben Heineman recently appeared in The Atlantic.) In early August, The New York Times ran a front page story that statisticians&#8211;rather than &#8220;dronish number nerds&#8221;&#8211;are increasingly in demand, &#8220;even cool.&#8221; With reams of data generated in the computer age and new realms to explore for purposes as broad as protecting [&#8230;]]]></description>
				<content:encoded><![CDATA[<p><strong>(Editor&#8217;s Note: This post by Ben Heineman recently appeared in <em>The Atlantic</em>.)</strong></p>
<p>In early August, <em>The New York Times</em> ran a front page story that statisticians&#8211;rather than &#8220;dronish number nerds&#8221;&#8211;are increasingly in demand, &#8220;even cool.&#8221; With reams of data generated in the computer age and new realms to explore for purposes as broad as protecting national security or creating financial products, statisticians, says the Times , are only a small part of an army of &#8220;data sleuths&#8230;from backgrounds like economics, computer science and mathematics.&#8221;</p>
<p>An important question raised by the story&#8211;and, of course, the broader, deeper trend of using mathematics and systems analysis to &#8220;understand&#8221; complex human behavior&#8211;is whether, before they have deleterious effects, emerging theories and products and ideas can be advanced with a strong measure of humility and put in the context of complex human society, where some key factors exist that cannot be quantified. Will the already potent but ever-emerging &#8220;numbers&#8221; class have the broad education and training to understand the &#8220;benefits&#8221; but also the &#8220;limits&#8221; of all this numbers crunching?</p>
<p>I raise this question of the potential effects of rigid application of mathematical and systems techniques because two of the most serious problems to beset this country&#8211;the Vietnam War and the financial meltdown&#8211;stemmed, in important ways, from overconfidence, indeed even cult-like behavior. These two problems are at the front of my mind due to two books that received attention in June and July that dealt with how the false idolatry of numbers and systems can lead people, institutions and nations far astray&#8211;with catastrophic results.</p>
<p>The first is former Defense Secretary Robert S. McNamara&#8217;s, <em>In Retrospect: The Tragedy and Lessons of Vietnam</em>. It was published in 1995, nearly 30 years after he left the Defense Department in 1968, but received much attention when McNamara died, at 93, in early July. As is well known, McNamara was a part of a World War II &#8220;systems analysis&#8221; team at Defense, led by Tex Thornton, a &#8220;whiz kid&#8221; who rose to the top of Ford Motor and a civilian technocrat who brought a powerful systems orientation to the Pentagon in the early 60s. While this approach certainly had relevant application to an attempt to rationalize the Pentagon&#8217;s corpulent competition between the Army, Navy and Air Force, it became famous in the Vietnam War when numbers like body counts, targets hit, enemy forces captured, weapons seized, tons of bombs dropped, and hamlets protected were used to argue that the war was being prosecuted successfully. The origins of the war were not in systems theories (rather, to take one strand, a belief that monolithic Russian-Chinese Communism would overrun Southeast Asia). But those theories played an important part in convincing McNamara and President Johnson that the war could be won and, therefore, in deepening our involvement, resulting in tragedy both for the U.S. and for Vietnam.</p>
<p> <a href="https://corpgov.law.harvard.edu/2009/08/19/beware-the-idolatry-of-numbers/#more-3368" class="more-link"><span aria-label="Continue reading Beware the Idolatry of Numbers">(more&hellip;)</span></a></p>
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