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| {{freeessay|design|Metis|}}{{Quote|one death is a tragedy. A million deaths are a statistic. | | {{freeessay|design|Metis|}} |
| :—Attributed to Stalin}}
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| {{Quote|if you owe the bank a hundred thousand dollars, it’s your problem. If you owe it a hundred million dollars, it’s the bank’s problem.
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| : attribution?}}An observation from {{author|James C. Scott}}’s {{br|Seeing Like A State}}, picked up in the early exchanges of {{author|Allen Farrington}}’s {{br|Bitcoin Is Venice}} is that of the difference of “[[metis]]” — knowhow, experience, wisdom, accumulated ''[[heurism]]'' — what we call ''[[subject matter expertise]]'', and which stands in distinction to — in forlorn defiance of — [[high modernism]] which solves everything at scale, by abstract model referencing the homogenised general and not the intricate particular.
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| The difference between the top down [[averagarianism|averagarian]] view and the [[subject matter expert]]’s view. The administrator knows that the portfolio risk is, say 5 percent and succeeds it she can “manage the portfolio” to suffer a risk of less than 5 per cent — which she may do by ''changing'' the portfolio to remove what she sees as the high risk instruments — where as an individual risk manager manages a single instrument with a given risk of 5 per cent and succeeds if she can avoid that risk altogether. For the individual risk manager, there is no 5 per cent loss. The loss is either nil or 100%.
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| A portfolio with 100 managers each managing a single instrument for which they are fully responsible throughout its life will lead to different decisions throughout the life of that instrument. Including the decision to invest in the first place.
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| Here is the equivalent of the averagarianist’s category error. We derive a mathematical property from an observed set of events — this is simple computation — that of a group of 100 mortgages, five did default — and make two invalid extrapolations. Firstly, that in any group of 100 mortgages, therefore, five ''will'' default, and secondly, that each mortgage in that portfolio has a probability of defaulting of 5 per cent.
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| Both conclusion is ''obviously'' barmy
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| {{sa}}
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| *{{Br|Seeing Like a State}}
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| *{{br|Bitcoin Is Venice}}
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| *[[Heuristic]]
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| *[[High modernism]]
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