by Tyler Cowen
on July 9, 2011 at 12:12 pm
1. Markets in everything?
2. Will Americans adapt to the self-driving car?
3. How Singapore does bus subsidies?
4. When nudge backfires.
5. Guided by the Lit.
6. The truth about wealth.
This Murphy Krugman debate has to be the most pathetic attempt at bullying I have ever seen. You should see the comments:
‘Haha, yeah we’ve got Krugman in a corner, how can he justify stopping thousands of pounds being given to charity?’
IDK, you already have the money, why don’t you just give it to the charities anyway? Nothing to do with Krugman.
Putting aside whether Krugman even knows about this, there’s no point in him debating Murphy for the same reason Dawkins doesn’t debate creationists. A school that holds that people can predict the future is not worth anyone’s time.
I would consider Krugman’s steadfast belief in Keynesian to be more consistent with a religion than what Murphy shows.
Not so sure about that. ‘Following’ a particularly great thinker isn’t the same as putting your faith in a bunch of apparently self evident moral axioms, which Austrians declare to be irrefutable. Plenty of scientists devote their lives to thinkers like Newton, Einstein and Da Vinci and they are not accused of religiosity. Let’s put aside the fact that Krugman himself is not a particularly devoted follower of Keynes the man.
Keynes basically boils down to the application of the distinction between risk and irreducible uncertainty to economics. I have no idea why conservatives/libertarians hate it so much, seeing as Keynes himself was a conservative and was skeptical about governments spending more than 30% of GDP. Both Austrianism and Neoclassicism hold that people or ‘markets’ can predict the future, which seems a lot more like a religion to me.
Trouble is that Krugman’s beliefs have been mostly debunked, while religion has neither been proven nor disproven.
I thought I posted a reply to this, but anyway here is a shorter version:
Following a great thinker isn’t like a religion. Scientists have devoted their lives to Einstein, Newton, Da Vinci and haven’t been accused of religiosity.
The basic point of Keynes is the distinction between risk and irreducible uncertainty (i.e., the idea that people cannot predict the future). Austrianism is all about deducing everything worth knowing about the economy from a bunch of self evident axioms that are apparently self evidently irrefutable. Everything they ‘deduce’ flies in the face of reality so they reject empirical evidence on some sort grounds. Sounds like a religion to me.
Jesus. Sorry about the double post, browser must be funny.
Suck my motherfucking dick!
The Austrian school is if anything the most skeptical and epistemological conscious. To an Austrian knowledge is local, and human action lawful but variable because of the subjectivity of value. Taleb’s The Black Swan, for instance, is predicated on the foggy frontiers of the future and is thoroughly Austrian in its rejection of math models and statistical inference.
If there’s anything to criticize Austrian economics for it is for not making _enough_ predictions, and for being overly retrospective.
This has been known for a long time I think. I remember taking a behavioral finance course in which I read a paper that did an automatic enrollment experiment, and the results were identical to what the wsj describes.
WSJ should have spoken to Dan Ariely on this.
Using the phrase Markets in everything? for the link to post about the Murphy-Krugman debate is a comment on the fact that nearly all of the comments to that post are commercial spam, right?
Why does this Slate article have a tone which says, “Man, this technology is so perfect, but those stupid Americans might not accept it because of their stubborn individualism”?
It’s not like people don’t ride buses or airplanes. Heck, by the tone of the article you’d think people are deathly afraid of sending their kids to public schools or going to the hospital.
I think the self-driving car simply has to prove itself. It would be a little weird to sit in a personal automobile and not drive, especially knowing that all that’s driving it is a computer, but eventually I think I could adapt. On the other hand, it’s more than just a trust thing. Driving is FUN, you know?
My eyes rolled so hard reading that, I may have damaged them. I mean, first of all, when/if these things come to market, they will come first as advanced cruise-control systems that can also steer and brake the car but where the driver can regain control merely by hitting the brake or grabbing the wheel (and where the driver will remain legally responsible). Second–why on earth does the writer think that because you aren’t steering, you’ll have no control over the route and speeds? “Ever want to throttle your inanimate GPS because its suggested route isn’t what you know to be best?” No, that’s ridiculous. The GPS provides route options. If I don’t like any of them, I put in a waypoint to guide it. Or I just start driving along the route I want and let it recalculate.
Because as the blind operator of a driverless auto you are not licensed to override the decisions made by the car that conforms to all laws.
Or even if you aren’t blind and have a license, what is the basis for exceeding the legal and safe speed limit which the car conforms to? Are you suggesting the driverless cars will be certified for use if the drive too fast for the weather and road conditions, or more important, refuse to enter a road under unsafe conditions.
But that really has nothing in particular to do with autonomous cars — the technology already exists to use GPS to prevent cars from ever exceeding posted speed limits. My GPS issues verbal warnings (“Observe speed limit”) — it would be a simple matter to require cars have integrated GPS units that limited vehicle speeds. Except, of course, voters would hate it (witness all the elections banning red-light cameras) and so, too, would governments (no speeding ticket revenue).
Some people like driving for driving’s sake, and will continue to do so (just as some people continue to purchase manual transmissions.) For other people, the freedom and individuality comes from being able to go where you want, not in how you get there. For them, having the car drive itself will still have freedom and individuality– they still won’t be bound by timetables, stops, and other things that come with mass transit.
Let’s think about the requirements placed on driverless cars to be registered:
– must obey all speed laws faithfully (no traveling a 5 MPH over limit, going through school zone at 40 at 3am)
– must maintain safe distance based on speed (no tail gating)
– must limit speed in bad weather (drop speed to 30, or 10MPH, or pull over in heavy rain or when snow/rain freezing on road)
– must not change lanes pass on right
– must travel in left lane only to pass, must not exceed speed limit to pass
– must not accelerate at excessive rate, or speed up.slow down unpredictably
– must stop for all pedestrians in cross walks
Of course, human drivers are expected to follow those rules. But nearly every driver violates most of them. Do any of them when taking the driver test and you risk being failed and denied permission to drive.
If drivers are allowed a driverless car license if blind, disabled, etc, then a driverless car must prohibit driver override of most of its automatic rules system; and what would be the basis for allowing any driver to exceed the speed limit?
Why would any automaker put a high powered engine in a driverless car because that would be extra cost it could not market because the driverless car could never accelerate at high rates or travel at 100MPH.
That then eliminates the core of 80% of the auto marketing. Can anyone get excited about an automaker advertising their car by showing images like those Amtrak uses, except Amtrak shows Business class and wine service by an attendant like the airlines do.
I think about the advent of automatic transmissions, which essentially use hydraulics to change gears, Thus, a push button control on the primary valve makes sense. I remember a few early models with names like drivematic and pushmatic that were controlled by push buttons on the dash. So, with most transmissions now electronically controlled is seating space taking up with a massive shift lever between the seats when a couple of touch screen buttons on the dash or even steering wheel could control the transmission, allowing for better use of the space for seating.
All in all, driverless cars remind me of Ginger, the human transport that would revolutionize mobility. That lasted for about 2 hours after demonstrated before it was attacked as stupid. And ironically, the rich idealist who bought Segway out of bankruptcy (he got rich selling his startup for hundreds of billions) died by accidentally driving his Segway off a cliff on a trail, sort of like drivers following the GPS instructions to drive off a pier. A coding error on that ferry crossing, and the driverless car blindly drives off the dock into the river or ocean.
So, why isn’t a driverless car like a cross between an expensive personal Amtrak coach and a Segway?
A driverless car is a limousine.
When you link to something does it imply any sort of endorsement of the content? (even if it’s only “I disagree, but it’s interesting and maybe thought provoking”). Because IMO the self-driving care article is a spectacle of shallowness. I know self-driving cars is favorite topic of yours (I can’t but agree; I think this is a (perhaps >Internet-scale) society-changer that will be here in a surprisingly short time-frame).
But this article left me just sad. Someone alone the line of the publishing process should have asked “did you give 5 seconds of thought to what you are writing?” and I don’t know which is worse, that the answer might be yes or no
Can you say something, even if just a few words (I know you are busy), on why you linked to this article – beyond its broad subject. (I hope you would agree that just linking to something
_merely_ because you find the topic of interest, is a waste of your time as a professor and blogger, and a waste of your readers’ time, and overall is just irrational).
About #4, it’s slightly confusing whether the “average contribution rate” averages in a zero contribution rate for non-participants or doesn’t include them in the average. If it does average in a zero, then this is quite a significant result. If it doesn’t, then the total amount of savings for all workers might still be going up (even if there are some people who would have chosen to contribute at 5-10% that are now contributing at 3% automatically and haven’t changed.)
Marry #3 to #4, we could increase 401k contribution levels by giving out a lottery ticket for every $100 contribution.
I’m willing to let a computer drive my Corvette for me, as long it accelerates to the speed limit as rapidly as possible and corners at 30 mph.
TallDave: > I’m willing to let a computer drive my Corvette for me, as long it accelerates to the speed limit as rapidly as possible and corners at 30 mph.
I think you forgot: and it shits gold nuggets out the exhaust pile instead of pollutants.
Why should we hold computers to a performance standard which is vastly better than anything you can do?
And what does “corners at 30 mph” even mean? (Every corner? Then why aren’t you the unbeatable superhuman autocross champion of the word?)
Perhaps I can suggest a rewrite that makes sense:
“I’m willing to let a computer drive my Corvette home for me, once the number of children it is expected to kill or main is less
than 1% of the number I [the statistical “I”, i.e.with similar actuarial driving characteristics] will kill.
There, I’ve given you a free pass of up to 100x as many innocent lives destroyed or ruined in expectation. Seems generous.
Would you sign up _that_ pledge? I’m going to guess at your answer: since you can accelerate as fast “as possible” and
take any corner at 30mph, you are clearly a remarkable driver and the chance of you [your actual self, not the statistical you] killing an
innocent on the road is 0.0000000000000%. Did I anticipate your answer correctly?
Guess you were out to lunch when God was giving out senses of humor?
Aaargh. Your guess seems well justified by the evidence
People on this, “better world”, dream-wagon all too often lack a sense of humor; as well as any perspective about the absurdity of life, and any ability to understand points of view other then their own.
Despite the, probably, good intentions, this is what gives “progressives” a bad name.
Just happened on this conversation, and am gratified by the elevated level of discourse here — even the one I am criticizing. All too rare on the net … (and, sure there are a couple of exceptions here, too…).
Can I plead insanity? Please? Here’s the argument for my defense: The lead (the Slate article) drove (ahem) me nuts – my idiotic response to TallDave (sorry again) reflects that
I don’t think that my insanity has a particularly liberal bias. It’s true, I’ve recently become an excited convert to the
idea of self-drivings cars: here’s a likely technology, just around the corner (by which I mean 15-20 years to get
to the deep implications, but with very very low chance of us not getting there), that has such large and beneficial implications for society!
OK, I concede, maybe a bit liberal?
But that Slate article? I don’t even know how to react to it. It’s not a plausible argument in any form I recognize. Not a prediction. Not a sensible rebuttal of anything. It just hurts my brain so much to think this was published. (It’s Slate, not a blog, it is -somewhat- “published”)
Members of the Jury, that’s my story and I throw myself on your mercy.
Is there somewhere I can contribute money to stop the debate from occurring?
You can send it to me. I promise you that the debate will never happen.
This deserves an Intrade market. Maybe Tyler will offer to be the market maker?
I’m surprised Tyler has only just heard of it (or felt like mentioning it) now. Alex should add some commentary on dominant assurance contracts.
Your link (“When nudge backfires”) and the title of the WSJ article (“401(k) Law Suppresses Saving for Retirement”) are, in my opinion, highly misleading.
Aon Hewitt, Vanguard, and Fidelity all have an incentive to encourage retirement savings, the 2006 to 2010 comparisons reflect very different economic environments, and average is different from “median”, which is more relevant.
The public policy rationale for tax-favored retirement plans is based on encouraging savings for lower- and middle-income people. By this standard, the recent experience may be a better value.
It is curious that some participants, given a 0% default, take action to opt for 5%, but given a 3% default, allow inertia to take over. For this “behavioral” problem, I propose a “behavioral framing” solution: surely, there is some way to present the choice to employees to not inhibit the higher, voluntary elections.
“It is curious that some participants, given a 0% default, take action to opt for 5%, but given a 3% default, allow inertia to take over. ”
Bingo. This tells me something is wrong with that study. It is puzzling that the authors didn’t take a moment to realize how odd the above statement sounds, which is exactly what their conclusions seem to imply.
It’s a self knowledge problem on the part of savers. The truth is that everyone in the industry knows that you could realistically set the initial rate for auto enrollment much higher, but plan participants have a poor understanding of how the additional savings would affect their lifestyle. When there is no auto enrollment, you are selecting for your group of participants who in some fashion are engaged in the decision to save. This group would average 5%ish as a first guess, but even they would do a very poor job on average of increasing their rates over time, even with substantial education to the effect that 10% is closer to the target. So people set an initial rate or choose not to based on a bad guess about what it will mean to their bottom lines. People don’t budget on a spreadsheet, they feel their way through expenses. Everyone, if polled, will tell you that it’s not possible for them to save any more. Yet study after study shows that opt out rates are minuscule at well above 3% auto enrollment. The bottom line is that after initial enrollment, people are still afraid any higher rate will wreck their lifestyles. They are wrong, but there you go.
+1 to the lame-Slate-article comments. As long as we retain the autonomy to choose between driverless and driving, we will gladly accept driverless technology once it has proves itself safer and more convenient. I’m a bit bearish on the safety front (remember the hullabaloo about Toyota’s acceleration. Multiply that x1000 with the natural failure rate of electronics. The media/public doesn’t care how many redundant safety features you claim to have when something goes wrong. And there better be a solid way to prove when user is at fault.) But making a vague claim about autonomy values and conjecturing for several paragraphs completely devoid of real-world data seems useless to me. I could just as easily write an article arguing that Americans will never use Facebook because we care more about privacy than the rest of the world. Oh wait.
So, you believe a driverless car must be limited to only fully qualified drivers, and denied to blind or disabled or children?
The Arizona law seems to require defining the rules so the blind and disabled can use driverless cars because they are to develop a standard for a driverless car license. If a driverless car can be driven by the driver whenever the driver wants, then there is no reason for a special license, unless the driverless car is less safe than a manual car, thus requiring greater skill and supervision to operate.
I’m not sure if you understand how the technology works.
If I’m in the car I can choose to drive myself or allow the car to drive for me. If I’m blind or otherwise disabled obviously the first choice would be unavailable. If you are operating the car obviously at that point then it is not driverless and I imagine you would be expected to have a license to do so.
“Wealthier” is a word that needs a hearty dose of Context to be understood. I take “We’re not as wealthy as we thought we were” as equivalent to “In retrospect, we made a lot of poor decisions.”
Serious question about #6: When someone is posting about the various reasons that the housing bubble burst, and they decide to name a major one, and they come up with “immigration crackdown,” should we take pity on them and attempt to contact them in real life, if only to make sure if they capable of feeding themselves? Or should we just let it go, and let nature take its course?
The 401K is a roach motel for your money. You can put it in but you can’t get it back out.
Those of you who have confidence the money inside is going to be worth something in 20 or 30 years when you retire need to pay attention to what governments are doing and going to be doing to their currencies to meet current and future obligations.
I asked a layperson’s question about the nature of wealth in economic theory near the beginning of this set of comments. I hoped to get a link or reference from some knowledgeable passerby, but it looks like my comment was deleted. Thanks for ignoring the uninitiated, Mr. Cowen — I’m very disappointed.
More likely it must have been a bug.Why not ask the question again?
Thanks, I’ll give it a try. Is there an economic term of art or theory for the difference between wealth and buying power viz. quality of life? These are the kinds of thing I have in mind: with a $100K windfall Bill Gates’s financial security is not appreciably increased, whereas mine would be; with a $1M windfall I (55 yrs old) can retire comfortably, but a 25 year-old head of household can’t. How does an economist look at this situation?
Actually, it was one “bad nudge” to set default contributions to 0%. We just found that it was another “bad nudge” to set 3%.
Nudging in this case is not avoidable. It has just yet to be optimized.
The best comment.
When get I get my self driving car? I can read, make phone calls, surf the net, otherwise get things done. Heck, I will drive to NY instead of the train or plane and pay to park outside the city. Tomorrow would be good.
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