Placebo effects

I think that there is further to go with this. Some institutions do have influence beyond their actual worth. A legal system provides confidence in property rights, the central bank can make sure that the financial system runs smoothly. We believe, so it is. It is even more important for society. Think inflation expectations.


Placebo effects: " In last night's Alternative Medicine on BBC2, the Perfect One talked about the power of placebo effects. Some apparently nonsensical treatments work, she said, if we expect them to. She says: NHS doctors are not taught the positive power of placebo. They’re told to reduce its effect for scientific research. This raises a question. If placebo effects are powerful in medicine, aren't they also likely to be powerful in the social sciences? Could it be that the power of some institutions derives not from their genuine mechanical ability to control things, but merely from our belief that they have power? In other words, the notion that institutions have power is  a self-fulfilling illusion.Here are three areas  where I reckon power might be due partly to a placebo effect:1. The media. The editorial lines and news content of the dead trees is determined by the profit motive , not by intellectual considerations. Why, then, do we believe newspapers have power? Could it be that their influence exists largely because we merely think it does? 2. Company bosses. Sure, entrepreneurship matters. But most bosses of large firms aren't entrepreneurs - they're just bureaucrats. If I were to say that such bureaucrats don't, generally speaking, improve firm performance, what could you do - other than cite a handful of except"