Ross Douthat's column in Sunday's New York Times offers the provocative thesis that many of this nation's (and some other's) biggest blunders and troubles are due in large part to meritocracy in which intelligent and talented people rise to positions of influence. The problem, says Douthat, is that such people are prone to a form of hubris in which they overestimate their ability to understand and manipulate the world. Hereditary aristocracies, Douthat writes, suffer from stupidity and pigheadedness, while one-party states do so from ideological mania. Meritocracies suffer from leaders who are excessively confident that their skills and knowledge are up to any task and thus become too reckless in their risk-taking. Douthat centers his piece on the story of Jon Corzine, the former head of Goldman Sachs (and former senator and governor), whose most recent Wall Street firm, MF Global, has filed for bankruptcy after apparently taking some bad risks with $600 million of customers' money. But Douthat says the same sort of phenomenon has cropped up in the realm of public policy with such endeavors as the wars in Vietnam and Iraq, or the European Union's creation of a common currency.

There is a lot of validity to this argument, and this type of hubris frequently appears in both public and private sector decision making. But some indications that there is more to the blunders than Douthat describes can be seen in one of his examples: the Iraq War. Ideology was a big part of what drove the war. You don't need a one-party state for ideology to play such a role—just control for a time by one party of some of the functions of the state. And although the war makers certainly had excessive confidence that they knew what they were doing, the launching of the war involved the rejection of much relevant expertise. The excessive and misguided risk taking that was involved was due less to meritocracy than to some people getting in a position—through whatever means, not necessarily merit—in which they could place big bets with other people's money, and in this case with other people's lives.

That is the biggest common thread involving the reckless risk taking of masters of the universe on Wall Street and that of makers of public policy in Washington: the ability to place big bets in which it is someone else's resources that are at stake. This is true of investment bankers who can operate on a “heads I win, tails the taxpayers lose” basis. It also is true of policy makers who get to claim a win if things work out but who do not suffer the way that taxpayers or soldiers suffer if things do not. The fact that those who are in temporary control of the government at any one moment are playing with other people's money and lives is a further reason they should be cautious in placing any bets at all—in addition to Douthat's sensible reason that decision makers need enough humility to realize that they don't really know enough to be confident that their gambles will work out.

In foreign policy there are a couple of additional reasons for caution that do not apply similarly on Wall Street. One is that the policy maker usually is dealing more with incalculable uncertainties and less with calculable risks than the gamblers on Wall Street are. The other reason is that with any public policy the inconsistent and selective nature of political attention means that some risks get paid far more attention than others, regardless of the actual magnitude of the risks involved. Something like the risks from a disliked regime owning powerful weapons tends to get plenty of attention; the risks of using military force to try to do something about such a regime get far less.