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.
The combination of Chinese anti-corruption reforms and currency controls has China's storied "middle class" (a nebulously defined category whose size and wealth are the subject of multiple, conflicting accounts) scrambling for ways to get their money out of the country and to establish bolt holes to escape to, should the situation suddenly worsen.
Former Blink 182 frontman Tom DeLonge got involved in a shady UFO conspiracy business, where for a few hundred bucks, people who are afraid of aliens could learn “the truth” that “they” (the government) do not want you to know. Here’s a Washington Post feature from May with the backstory. The project is on track […]
Robbo sez, "As a Canadian in my later years I benefit from my monthly Canada Pension Plan payments. As a Canadian and a human being I am disgusted that CPP holds stock in Geo Group and CoreCivic, companies who operate for-profit prisons and immigrant detention centres. As MP Charlie Angus (NDP) sez: 'Quite frankly, if […]
Speed reading isn’t just an innate skill possessed by a lucky few. Anyone can learn to speed read, and the benefits are endless. The brain can process more information than most people have time to soak up, but you can make that time now with the 2018 Award-Winning Speed Reading Bundle. The first half of […]
Sure, you could use the same old PowerPoint templates for your next business presentation. It’s not like you have bosses or investors to impress. Oh wait, you do? Time to augment that slideshow with Slideshop – the presentation tool that can individualize your pitch while saving you time. Compatible with PowerPoint, Keynote and Google Slides, […]
Multinational companies have used the no-nonsense methodologies of Six Sigma and Lean Six Sigma to oil a smooth-running operation for years. What is it? Six Sigma (and its offshoot, Lean Six Sigma) apply the principles of science to business, teaching managers to methodically target waste, maximize output and streamline the flow from producer to consumer. […]