What I’ve been reading, not reading, or is in my pile

by on October 25, 2011 at 7:29 am in Uncategorized | Permalink

1. Eyes of God, a novel by Philip Babcock, economist at UC Santa Barbara.  It is about intrigue and Indonesia.

2. By page 200 I got bored of the new Eugenides novel.  The Barbarian Nurseries reaps high praise and is well-written but it feels too ordinary for me.

3. Ladies of Liberty: Women Who Made a Difference in American History, by John Blundell.  Biographical sketches of libertarian and libertarian-themed women in U.S. history.  Includes Rose Wilder Lane, Isabel Patterson, Rose Friedman, Jane Jacobs, others.

4. Michael Nielsen, Reinventing Discovery: The New Era of Networked Science.  The best book on the potential for open, networked science, looking forward.  Joshua Gans on the book here and here, the latter having a link to Michael’s TEDx talk.

5. Robert Trivers, The Folly of Fools: The Logic of Self-Deceit and Self-Deception in Human Life.  Brilliant, insightful, with occasional lapses of taste, quintessential Trivers, now the go-to book on its topic, recommended.

Ashwin October 25, 2011 at 8:12 am

Here’s a critique of Trivers’ theory of self-deception by V.S. Ramachandran which I think is compelling – http://www.leftinthedark.org.uk/PDF/Ramachandran%20VS%20Evol.pdf .

And an application of Trivers and Ramachandran to the moral hazard problem in finance – why bankers who take on crazy bets really believe that they’re doing the right thing http://www.macroresilience.com/2010/02/17/natural-selection-self-deception-and-moral-hazard/ .

burger flipper October 26, 2011 at 1:36 am

many thanks for the 1st link

guy October 25, 2011 at 8:55 am

“The Barbarian Nurseries”

Tyler Cowen October 25, 2011 at 9:53 am

thanks, fixed…

Cahal October 25, 2011 at 9:15 am

And coming soon: Steve Keen: Debunking Economics 2

Come on free market economists, are you afraid you might agree with it?

Chris R October 26, 2011 at 5:13 am

No, I’m afraid that it might force me to gouge my eyes out. The original “Debunking Economics” was so full of misinformation and simple untruth that it’s best to skip the new one entirely. There are some scathing reviews by “Radek” that can be found online and a more mixed review by Quiggin; taken together they pretty much capture how I feel about it.

Phil Babcock is an excellent writer who has a defunct blog “Ask Edgeworth”. That blog nails some of the more pressing problems with the sociology of the economics profession. McCloskey also deserves to be taken seriously.

Chris R October 26, 2011 at 5:45 am

Update: Michael Greinecker gave an accurate and concise review of D.E. a while back:

http://yetanothersheep.blogspot.com/2008/06/steve-keen-tries-to-understand.html

Cahal October 26, 2011 at 6:26 am

Well that article is fairly poor – in fact, I see little that doesn’t amount to an argument from personal incredulity. Steve Keen’s models predicted the financial crisis to a tee. If any environmental scientist’s models did that with a catastrophe they would be given a serious look at, but in economics they just cling to RET and EMH no matter what.

But of course, Keen must just not understand all the equilibrium models of a dynamic system, combined with ridiculous assumptions that do not resemble reality. He’s obviously attacking straw men; I mean, look at the great job economists have done over the past 30 years. For what it’s worth, Robert Vienneau had a series of responses to Keen’s critics:

http://robertvienneau.blogspot.com/2006/07/response-to-comments-on-steve-keens.html

Cahal October 26, 2011 at 7:26 am

I read Quiggin’s review and he seems to fall victim to the same biases that all economists do. You lot see it as ‘thinking like an economist’ but sane people see it as ‘being a nutter’. Examples:

‘Keen gives a very clear exposition of the derivation of an individual demand curve…individual demands can only be aggregated in the case of identical preferences. This naturally leads up to the rhetorical question: So What?

Erm, in the real world you know, the one we’re trying to model – people don’t have identical preferences. So modelling with demand curves is obviously flawed. Isn’t this obvious?

Quiggin then goes on to defend Arrow-Debreu, which has so many flaws I don’t know hwere to begin. If you disagree then I will provide elaboration.

‘mainstream economists who accept…the conditions for a competitive equilibrium are frequently violated in reality’

This seems OK, but look at the framing. Imagine this:

‘engineers accept that the conditions for perfectly spherical bridges are frequently violated in reality’

Competitive equilibrium is viewed as the starting point, and reality is simply a deviation from the model. This is a problem.

Quiggin sums up the CCCs with another ‘so what’, which is basically what the Americans said when they lost the debate. It’s just ridiculous to admit defeat then carry on as usual.

I will note that it was written in 2002 and Quiggin seems to have become more skeptical then, hence his book. I have my suspicions he would agree with Keen more given recent events.

TGGP October 26, 2011 at 11:47 pm

“Steve Keen’s models predicted the financial crisis to a tee”
Steve Sailer said he used to read Steve Keen, but stopped because his predictions turned out to be wrong.

Cahal October 27, 2011 at 12:16 pm

Good to see Kling read it, although his typical ‘free market economist’ dissonance shows in his review (his ‘banks were regulated so it wasn’t a market failure’ thinking is the best example).

Keen predicted that every country would have a financial crash, and they all did except the one he lived in. The government in Australia keeps bailing out the housing market so they haven’t had a fall yet.

Overall, his predictions have been spot on. Dismissing him completely because Australia has done OK is silly.

TallDave October 25, 2011 at 1:24 pm

Working on Vinge’s newest, Niven’s Juggler of Worlds, still plodding through the Park biography, re-skimming Ridley’s Rational Optimist. Going to start re-reading Zelazny’s Amber series again if nothing better comes along. (Of course, between 75+ hour work weeks, an attempt to buy a home in short sale, the Stanford AI class, and our first kid on the way I may not actually finish any of the above till 2030 or so.)

AM October 25, 2011 at 3:43 pm

why is the Kindle version of Eyes of God so much cheaper at $2.99 vs. 9.32 for paperback? Seems unusual from my experience.

careless October 26, 2011 at 7:32 pm

It’s not published by one of the major publishers so they’re probably letting Amazon set the price.

John Quiggin October 29, 2011 at 6:31 am

Cahal, you’ve missed the point as regards aggregation. The point is that, since you can’t aggregate individual demands, you shouldn’t try, and, in making welfare claims economists generally don’t do so. They rely on the welfare theorems proved by Arrow and Debreu without the assumption of identical individuals. So, if you want to criticise claims about Pareto optimality you should criticise Arrow-Debreu, not worry about the aggregation problem.

OTOH, I agree entirely with your observation “Competitive equilibrium is viewed as the starting point, and reality is simply a deviation from the model. This is a problem.” I said this in Zombie Economics. I think (and thought) it is the way Keen should have tackled welfare theory in his book.

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