Optimization is a major part of the course of study in many of our college and university majors. Did you know that? That is what this blog is about.
Almost every college major has "optimization" as a part of it course of study. Why do you think that is? If you were an Ag major, you might study on how to optimize the amount of corn that you can grow per acre. If you were a Mechanical Engineering major, you might study on how to build a structural beam for the least cost to hold up the load. If you think about it, almost all college majors focus on optimizing some thing. I used to teach a decision theory class and much of my efforts were to show how to optimize business and engineering decisions based on their cost.
The key thing about decisions optimization is that you first need a clear objective. The big problem that we have with public sector decisions is that we do not have a clear objective. In the public sector each player or voter often have a different objective and their is not a very good way to average out those objectives into one single objective. The way we do it is by voting and accepting what the majority wants as the objective. The problem with this method is that many of the voters do not have any idea what the total impact of their decision objective is. Further, some of the voters have louder voices than others and thus skew the final results. Let's look at an example.
First, we have a business man who has a lawn care business. He wants to make as much money as he can and to do that he needs cheap workers. He likes illegal immigration as a source for the cheap workers that he wants. His objective is an open border or lax enforcement. Next we have the person who works for Ford making cars. He also wants to make as much money as he can for his family. He does not like trade policies that allow cars made outside the USA to come into the USA with a minimum tax while the country where the cars came from changes us a larger tax. His objective is fewer immigrants and fair trade policies. Following this?
Now, how do we resolve the fact that these two objectives are in conflict? We vote! Who has the most votes? When you get millions of people in the mix, do you really think that we end up with the "optimum" decision? If all the voters are well informed, it is possible that the final vote ends up "near" optimum? How often do you think that really happens?
Here is an example. How about "global warming" and the actions associated with that? Do you really think that voting is the way to resolve the situation? I think that you can see that decisions in the public sector hardly ever end up as "optimum". I don't know the answer, but I feel that I have provided some food for thought.
PS--May be the President is the one to figure out what is best for the "whole" country. His problem is that his "optimum" decision just might not satisfy anyone and he will not get reelected. Why don't you try thinking "bigger" than your own narrow needs and think about what is best for the country in the long term. If you are honest, I think you will be surprised by the results. At my age, I think less about myself and more about the future of my grand kids and great grand kids. Interesting?
Almost every college major has "optimization" as a part of it course of study. Why do you think that is? If you were an Ag major, you might study on how to optimize the amount of corn that you can grow per acre. If you were a Mechanical Engineering major, you might study on how to build a structural beam for the least cost to hold up the load. If you think about it, almost all college majors focus on optimizing some thing. I used to teach a decision theory class and much of my efforts were to show how to optimize business and engineering decisions based on their cost.
The key thing about decisions optimization is that you first need a clear objective. The big problem that we have with public sector decisions is that we do not have a clear objective. In the public sector each player or voter often have a different objective and their is not a very good way to average out those objectives into one single objective. The way we do it is by voting and accepting what the majority wants as the objective. The problem with this method is that many of the voters do not have any idea what the total impact of their decision objective is. Further, some of the voters have louder voices than others and thus skew the final results. Let's look at an example.
First, we have a business man who has a lawn care business. He wants to make as much money as he can and to do that he needs cheap workers. He likes illegal immigration as a source for the cheap workers that he wants. His objective is an open border or lax enforcement. Next we have the person who works for Ford making cars. He also wants to make as much money as he can for his family. He does not like trade policies that allow cars made outside the USA to come into the USA with a minimum tax while the country where the cars came from changes us a larger tax. His objective is fewer immigrants and fair trade policies. Following this?
Now, how do we resolve the fact that these two objectives are in conflict? We vote! Who has the most votes? When you get millions of people in the mix, do you really think that we end up with the "optimum" decision? If all the voters are well informed, it is possible that the final vote ends up "near" optimum? How often do you think that really happens?
Here is an example. How about "global warming" and the actions associated with that? Do you really think that voting is the way to resolve the situation? I think that you can see that decisions in the public sector hardly ever end up as "optimum". I don't know the answer, but I feel that I have provided some food for thought.
PS--May be the President is the one to figure out what is best for the "whole" country. His problem is that his "optimum" decision just might not satisfy anyone and he will not get reelected. Why don't you try thinking "bigger" than your own narrow needs and think about what is best for the country in the long term. If you are honest, I think you will be surprised by the results. At my age, I think less about myself and more about the future of my grand kids and great grand kids. Interesting?
