Goodhart's Law is one of those neat formulations that codifies something I've been trying to put my finger on for years: "once a social or economic indicator or other surrogate measure is made a target for the purpose of conducting social or economic policy, then it will lose the information content that would qualify it to play such a role."
That is, once you start measuring GDP as a way of gauging social welfare, people will start to figure out ways to make GDP go up without improving social welfare (say, by swapping dirty financial derivatives). Once Google starts measuring inbound links as a way of evaluating the importance of web-pages, people will figure out how to increase the inbound links to unimportant pages (splogging, blogspam). And once you measure fat or calorie content as a proxy for the healthfulness of food, manufacturers will figure out how to decrease fat and calories without making the food more healthful (reducing fat by adding sugar, reducing calories by adding poisonous artificial sweeteners).
The law was first stated in a 1975 paper by Goodhart and gained popularity in the context of the attempt by the United Kingdom government of Margaret Thatcher to conduct monetary policy on the basis of targets for broad and narrow money, but the idea is considerably older. It is implicit in the economic idea of rational expectations. While it originated in the context of market responses the Law has profound implications for the selection of high-level targets in organisations.
Maciej Cegłowski’s posted another of his barn-burning speeches about the Internet’s problems, their origins and their solutions (previously), a talk from the Fremtidens Internet conference in Copenhagen called “What Happens Next Will Amaze You.”
Larkin Jones is a hardcore Pokemon fan who loses money every year on his annual Pokemon PAX party; he makes up the shortfall from his wages managing a cafe. This year, Pokémon Company International sued him and told him that even though he’d cancelled this year’s party, they’d take everything he had unless he paid […]
With this year’s “ag-gag” law, Wyoming has made it a crime to gather evidence of agricultural wrongdoing, from illegal pollution to animal cruelty, even from public land — and also prohibits regulators from acting on information gathered in violation of the law.
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