Philosophy

That is the new book by Jason F. Brennan and Peter Jaworski.  I like my own blurb for it:

“There are many books on the morality of commerce and market commoditization, but this one is better than the others. It is better argued, penetrates into the issues more deeply, and most of all it is right.”

Joseph Stiglitz writes:

It is hard to advise Greeks how to vote on July 5. Neither alternative – approval or rejection of the troika’s terms – will be easy, and both carry huge risks. A yes vote would mean depression almost without end. Perhaps a depleted country – one that has sold off all of its assets, and whose bright young people have emigrated – might finally get debt forgiveness; perhaps, having shriveled into a middle-income economy, Greece might finally be able to get assistance from the World Bank. All of this might happen in the next decade, or perhaps in the decade after that.

By contrast, a no vote would at least open the possibility that Greece, with its strong democratic tradition, might grasp its destiny in its own hands. Greeks might gain the opportunity to shape a future that, though perhaps not as prosperous as the past, is far more hopeful than the unconscionable torture of the present.

I know how I would vote.

Stein Ringen reviews The China Model, here is Gideon Rachmann.  He writes:

Daniel Bell, a Canadian political philosopher who has taught at Tsinghua University in Beijing for many years, is deeply influenced by this Chinese tradition. In his new book, he has set himself the ambitious task of making the case that Chinese-style meritocracy is, in important respects, a better system of governance than western liberal democracy.

I’ve been seeing a lot of emotional reactions to this book, here are a few points:

1. The United States probably should have less democracy along some margins, if only fewer referenda in California and no state and local elections of judges, dog catchers, and the like.  If a writer cites “democracy” as obviously and always good for all choices, that writer isn’t thinking clearly.

2. More generally, the Western nations are relying on democracy less, as evidenced by the growing roles for central banks and also the European Union.  That may or may not be desirable, but it’s worth considering our own trends before putting the high hat on.

2. The key to long-term living standards is stability of growth, just look at Denmark.  There was never a heralded “Danish economic miracle,” but the country still has finished close to the top in terms of human welfare.  Whether ostensibly meritocratic non-democratic systems can deliver such outcomes remains very much up for grabs, and Bell’s book hasn’t convinced me any that they can.

3. Arguably a country’s best chance of achieving meritocracy is to have many smart individuals who are culturally central.  No system of government is going to overcome the lack of that.

4. Most humans in history seem to have favored meritocratic rule over democracy, and before the 19th century democracy was rare, even in the limited form of male-dominated or property owner-dominated republics.  It is possible that the current advantage of democracy is rooted in technology, or some other time-specific factor, which ultimately may prove temporary.  That said, I still observe plenty of democracies producing relatively well-run countries, so I don’t see significant evidence that a turning point against democracy has been reached.

5. To consider comparisons which hold a greater number of factors constant, I haven’t seen many (any?) serious people argue that Taiwan or South Korea would have done better to resist their processes of democratization.

Here you can buy The China Model: Political Meritocracy and the Limits of Democracy.

Claims about Germany

by on June 20, 2015 at 2:41 pm in Education, Philosophy | Permalink

When I say that growing up in Germany helps bestow independent thinking skills, I’m not saying that it’s because they’re all taught [the] Straussian art of close reading. Instead I’m arguing that society has suppressed the value of certain status indicators, and that encourages people to think for themselves. To put it another way, there are fewer tournaments for kids to go through, and the value of winning them is not so high. Germans I’ve met are incredibly humble. Nobody feels the need to perpetrate an international hoax about how desirable they are. In addition, people aren’t all drawn to the same fields like finance and consulting. They take up professions like baking or manufacturing, and work with the earnestness that comes from knowing that their work is dignified; it’s easier for them to do the equivalent of moving to Dayton to study widget machines.

That is from Dan Wang, who also offers remarks on the philosophy and writings of Peter Thiel.  My reservation about Dan’s argument is that Germans may use their independent thinking skills to question the entire value of traditional metrics of success, thereby making Germany less suited to produce certain kinds of innovations.

Here is an interesting Simon Kuper FT piece on Germans, mostly positive although “Germans are frequently wrong.”

Normative Sociology

by on June 19, 2015 at 7:29 am in Economics, Philosophy | Permalink

Excellent post by Joseph Heath:

The whole “normative sociology” concept has its origins in a joke that Robert Nozick made, in Anarchy, State and Utopia, where he claimed, in an offhand way, that “Normative sociology, the study of what the causes of problems ought to be, greatly fascinates us all”(247). Despite the casual manner in which he made the remark, the observation is an astute one. Often when we study social problems, there is an almost irresistible temptation to study what we would like the cause of those problems to be (for whatever reason), to the neglect of the actual causes. When this goes uncorrected, you can get the phenomenon of “politically correct” explanations for various social problems – where there’s no hard evidence that A actually causes B, but where people, for one reason or another, think that A ought to be the explanation for B. This can lead to a situation in which denying that A is the cause of B becomes morally stigmatized, and so people affirm the connection primarily because they feel obliged to, not because they’ve been persuaded by any evidence.

Let me give just one example, to get the juices flowing. I routinely hear extraordinary causal powers being ascribed to “racism” — claims that far outstrip available evidence. Some of these claims may well be true, but there is a clear moral stigma associated with questioning the causal connection being posited – which is perverse, since the question of what causes what should be a purely empirical one. Questioning the connection, however, is likely to attract charges of seeking to “minimize racism.” (Indeed, many people, just reading the previous two sentences, will already be thinking to themselves “Oh my God, this guy is seeking to minimize racism.”) There also seems to be a sense that, because racism is an incredibly bad thing, it must also cause a lot of other bad things. But what is at work here is basically an intuition about how the moral order is organized, not one about the causal order. It’s always possible for something to be extremely bad (intrinsically, as it were), or extremely common, and yet causally not all that significant.

I actually think this sort of confusion between the moral and the causal order happens a lot. Furthermore, despite having a lot of sympathy for “qualitative” social science, I think the problem is much worse in these areas. Indeed, one of the major advantages of quantitative approaches to social science is that it makes it pretty much impossible to get away with doing normative sociology.

Incidentally, “normative sociology” doesn’t necessarily have a left-wing bias. There are lots of examples of conservatives doing it as well (e.g. rising divorce rates must be due to tolerance of homosexuality, out-of-wedlock births must be caused by the welfare system etc.) The difference is that people on the left are often more keen on solving various social problems, and so they have a set of pragmatic interests at play that can strongly bias judgement. The latter case is particularly frustrating, because if the plan is to solve some social problem by attacking its causal antecedents, then it is really important to get the causal connections right – otherwise your intervention is going to prove useless, and quite possibly counterproductive.

He goes on to discuss four reasons why people are attracted to normative sociology 1) they want to have a causal lever so they blame what they think they can change 2) they don’t want to blame or appear to blaming the victim so they avoid some explanations in favor of others 3) confusing correlation and causation 4) a metaphysical desire for bad things to have big and bad effects.

Addendum: My review of Heath’s book, Enlightenment 2.0.

Stephen Hawking fears that “the development of full artificial intelligence could spell the end of the human race.” Elon Musk and Bill Gates offer similar warnings. Many researchers in artificial intelligence are less concerned primarily because they think that the technology is not advancing as quickly as doom scenarios imagine, as Ramez Naam discussed. I have a different objection.

Why should we be worried about the end of the human race? Oh sure, there are some Terminator like scenarios in which many future-people die in horrible ways and I’d feel good if we avoided those scenarios. The more likely scenario, however, is a glide path to extinction in which most people adopt a variety of bionic and germ-line modifications that over-time evolve them into post-human cyborgs. A few holdouts to the old ways would remain but birth rates would be low and the non-adapted would be regarded as quaint, as we regard the Amish today. Eventually the last humans would go extinct and 46andMe customers would kid each other over how much of their DNA was of the primitive kind while holo-commercials advertised products “so easy a homo sapiens could do it”.  I see nothing objectionable in this scenario.

Aside from greater plausibility, a glide path means that dealing with the Terminator scenario is easier. In the Terminator scenario, humans must continually be on guard. In the glide path scenario we only have to avoid the Terminator until we become them and then the problem is resolved with little fuss. No human race but no mass murder either.

More generally, what’s so great about the human race? I agree, there are lots of great things to point to such as the works of Shakespeare, Mozart, and Grothendieck. We should revere the greatness of the works, however, not the substrate on which the works were created. If what is great about humanity is the great things that we have done then the future may hold greater things yet. If we work to pass on our best values and aspirations to our technological progeny then we can be proud of future generations even if they differ from us in some ways. I delight to think of the marvels that future generations may produce. But I see no reason to hope that such marvels will be produced by beings indistinguishable from myself, indeed that would seem rather disappointing.

I was asked about this recently, so I thought I would put down some basic thoughts.  Note that mental illness is a major underlying issue behind both crime and unemployment.  Federal, state, and local policies toward the mentally ill are highly complex, but here are a few points:

1. As is often the case in health care policy, my inclination is to fund research and development, in this case through the NIH and NSF, before worrying about improving coverage in extant programs.  The long-term dynamic gains have the potential to outweigh the one-time static gains.

2. Medicaid offers a highly imperfect coverage of mental illness.  Fine-tuning the coverage may well be a good idea, but perhaps first Medicaid needs to be put on a sounder footing.  If you are a liberal this may mean federalizing Medicaid, and if you are a conservative this may mean block grants to the states for Medicaid experimentation.  If we are simply asking which policy is better for the mentally ill, federalization is likely the answer, although that does not settle the broader debate as to which alternative would be better overall.

3. We could retool Obamacare mandates, and other health insurance default settings, to have more coverage for mental illness and less coverage for other health conditions.  Both practical and “individual responsibility” arguments might point in that direction.

4. The deinstitutionalization of the 1980s has come in for a lot of criticism, but I remain a fan of that policy.  I’m well aware of its connection to homelessness, and also how many mentally ill people have ended up in jail.  Still, that change ended a kind of slavery for many, and if you oppose slavery you should oppose the previous policies, even if the transition brought some very large practical problems.  Of course some of these people were lobotomized or otherwise treated coercively in addition to their involuntary confinement.  In 1955 the institutionalized population peaked at about 500,000 and many of those were not voluntary admissions; a 2003 measure put that same population at only 50,000.  I recommend this Samuel R. Bagenstos piece on the topic.

5. Further deregulation could boost telemedicine and also telepsychiatry; this would lower cost and is especially important for rural areas.

6. When the family of a mentally ill adult should be notified, given individual privacy rights, is worth further discussion.  I don’t have a simple answer, here is some background.

7. The future debate will be all about wearables, including those that monitor the excited or violent states of mentally ill people.  I am skeptical about this development, mostly for slippery slope reasons, but this will become a major policy issue, for criminals and high risk individuals too.

8. Crime rates have been falling since the 1980s.  That suggests some very large gains are coming through peer effects.  There is plenty of evidence that mentally ill people, to some extent, slot into their culture’s conception of what mental illness should consist of (mentally ill Malaysians for instance are more likely to “run amok,” because that is a salient concept there.)  It seems that our culture is communicating an increasingly peaceful notion of what mental illness should consist of.  This development should be studied further, as perhaps those gains can be extended or accelerated in some way.

Overall this is one of the most important topics which is most understudied by economists.

The new issue of Econ Journal Watch is online at http://econjwatch.org.

In this issue:

Evolution, moral sentiments, and the welfare state: Many now maintain that multilevel selection created a sympathetic species with yearnings for social solidarity. Several evolutionary authors on the political left suggest that collectivist politics is an appropriate way to meet that yearning. Harrison Searles agrees on evolution and human nature, but faults them for neglecting Hayek’s charge of atavism: The modern polity and the ancestral band are worlds apart, rendering collectivist politics inappropriate and misguided. David Sloan Wilson, Robert Kadar, and Steve Roth respond, suggesting that new evolutionary paradigms promise to transcend old ideological categories.

Evidence of no problem, or a problem of no evidence? In 2009, Laura Langbein and Mark Yost published an empirical study of the relationship between same-sex marriage and social outcomes. Here Douglas Allen and Joseph Price replicate their investigation, insisting that conceptual problems and a lack of empirical power undermine any claim of evidence on outcomes. Langbein and Yost reply.

The progress of replication in economics: Maren Duvendack, Richard W. Palmer-Jones, and W. Robert Reed investigate all Web of Science-indexed economics journals with regard to matters concerning replication of research, including provision of the data and code necessary to make articles replicable and editorial openness to publishing replication studies. They explain the value of replication as well as the challenges, describe its history in economics, and report the results of their investigation, which included corresponding with journal editors.

A Beginner’s Guide to Esoteric Reading: Arthur Melzer describes techniques and devices used in esoteric writing.

Symposium:
Classical Liberalism in Econ, by Country (Part I): Authors from around the world tell us about their country’s culture of political economy, in particular the vitality of liberalism in the original political sense, historically and currently, with special attention to profession economics as practiced in academia, think tanks, and intellectual networks.

Chris Berg:
Classical Liberalism in Australian Economics

Fernando Hernández Fradejas:
Liberal Economics in Spain

Mateusz Machaj:
Liberal Economics in Poland

Patrick Mardini:
The Endangered Classical Liberal Tradition in Lebanon: A General Description and Survey Results

Miroslav Prokopijević and Slaviša Tasić:
Classical Liberal Economics in the Ex-Yugoslav Nations

Josef Šíma and Tomáš Nikodým:
Classical Liberalism in the Czech Republic

EJW Audio: W. Robert Reed on Replication in Economics

The classical MU [differential marginal utility of money] argument has, in my view, been moderated by the findings of behavioral economics, namely loss-aversion. Taking from the higher-incomes to give it to the lower incomes may be negative utility as the higher incomes are valuing their loss at an exaggerated rate (it’s a loss), while the lower income recipients under value it.

Many on the Left are too quick to grab on to the findings of behavioral economics as a critique of neoclassical economics, but while they often do point away from simplistic free-market views, they do not necessarily point towards left-wing solutions. They are just as likely to point to non-market conservative views.

For example, isn’t it another consequence of the asymmetry of the utility function with respect to the status quo (loss aversion) that social mobility destroys utility? I mean, if the tide is lifting all boats, then you can argue that it’s still better for everyone (the libertarian view), but if your utility function is heavily rank-based (a standard left-wing view) and you accept loss-aversion from the behavioral literature, then social mobility is suspect from an utility point-of-view.

This sounds shockingly old-school conservative when we discuss our own societies (“why should the children of the poor compete with my kids for a place in a good university? they have lower expectations, after all, State U is a step up for them. My kids, on the other hand, would be crushed if they had to go to their safety school”), but is quite acceptable when discussing international inequalities (“it doesn’t morally matter that people in Mexico have much less material wealth, their society has lower expectations”).

That is from Luis Pedro Coelho.

1. You cannot build and sustain a polity on the idea of redistributing wealth to take advantage of differences in the marginal utility of money across varying wealth classes.

2. The ideas you can sustain a polity around often contradict the notion of socially arbitraging MU differences to try to boost total utility.

3. The MU argument, in isolation, is therefore rarely compelling.  Furthermore its “naive” invocation is often a sign of underlying weakness in the policy case someone is trying to make.  The proposed policy may simply be too at odds with otherwise useful social values.

4. This is related to why parties from “the traditional Left” so often lose elections, including in a relatively statist Europe.

5. That all said, sometimes we should in fact take advantage of MU differences in marginal increments of wealth and use them to drive policy.

6. Figuring out how to deal with this tension — ignoring MU differences, or pursuing them — is a central task of political philosophy.

7. The selective invocation of the differential MU argument — or the case against it — will make it difficult to improve your arguments over time; arguably it is a sign of intellectual superficiality.

In 2012 economists at the University of Auckland published research establishing clear correlations between family circumstances and incidents of child abuse or neglect. “No one realized we were sitting on such rich data in terms of its predictive power,” says Rhema Vaithianathan, who led the research. “We can find children who are at considerably elevated risk, and we can find them at birth.”

And:

Using data from welfare, education, employment, and housing agencies and the courts, the government identified the most expensive welfare beneficiaries—kids who have at least one close adult relative who’s previously been reported to child safety authorities, been to prison, and spent substantial time on welfare. “There are million-dollar kids in those families,” English says. “By the time they are 10, their likelihood of incarceration is 70 percent. You’ve got to do something about that.”

Moving closer to home:

Jennie Feria, who oversees risk assessment for L.A.’s Department of Children and Family Services, says one idea is to rate families, giving them a number that could be used to identify who’s most at risk in the way lenders rely on credit scores to determine creditworthiness. “The way we may use it, it’s going to be like it’s a FICO score,” Feria says. The information, she says, could be used both to prioritize cases and to figure out who needs extra services. “It’s at the very early stages, because we don’t know how we’re going to use it yet exactly.”

It will be interesting to see how that one develops.  The article is by Josh Eidelson.

Bryan Caplan considers this question in a very useful blog post.  He serves up these hypotheses, though I think without committing to any particular one of them:

1. Despite their rarity and absence on the front lines of politics, self-conscious libertarians still strongly shape mainstream conservative politicians’ economic policies.

2. Self-conscious libertarians, though rare, have still managed to sharply shift public opinion in a libertarian direction.

3. Self-conscious libertarians, though politically impotent, are a symbol of what’s wrong with American politics.

And then there are the stories the critics won’t embrace, but perhaps they’re true nonetheless…

4. Libertarians, unlike mainstream conservatives, openly defend many unpopular views.  Intellectuals who want to loudly champion popular views have to engage libertarians because there’s hardly anyone else to argue with.

5. Libertarian arguments, though mistaken, are consistently clever enough to get under the critics’ skin.  The purpose of the criticism is not shielding the world from bad ideas but giving the critics some intellectual catharsis.

6. Libertarian arguments are good enough to weigh on the critics’ intellectual consciences.  They attack libertarians to convince themselves that we’re wrong.  And they keep attacking us because they keep failing to fully convince themselves.

But I see more options.  Consider a simple model where bureaucracies maximize output, and try to produce correct output.  In my view, the more mainstream thinkers criticize libertarians so much because a) it helps them generate output, and b) they think they have the better arguments.   There is a clear target, easily explained (not always correctly explained, however), and very often the target can be taken on with a minimum of detailed empirical investigation.  Furthermore the arguments against the libertarian often position the critic in a favorable ideological space, especially for left-wingers: “look, there are people who believe this, better come ally with me!”

If we are talking about “The Left,” the libertarian is about the most welcome intellectual opponent there is.  The real scourge, correctly or not, is the common sense morality of the center.  That’s right, the people who favor and distrust big government at the same time, the people who think the poor deserve welfare support but only so much, the people who distrust intellectual elites and cosmopolitanism, the people who side with police more than they ought to, and yes the people who think Medicare is more based on just deserts than is Medicaid.

That set of views does not describe me well, but the funny thing is — unlike with both far left and libertarian ideas — we do in fact know you can build a workable polity from them.  The libertarians are so much more of a tempting opponent.

His new book Inequality: What Can Be Done?, is out mid-May but already available in some bookstores.  Here is an interview with Atkinson.  I thought this book did not take sufficient care with some very basic distinctions, such as the difference between a problem of poverty and a problem of inequality.   Nor does it put enough emphasis on wealth creation, or explain why Korean-Americans have done pretty well over the last thirty years, among other possible examples.

The book is dedicated to the NHS workers of Britain.  That’s fine, many of them are very good, but Atkinson doesn’t mention a few key points, namely that a) the British system ranks relatively poorly by European standards, b) the British system probably has too much governmental ownership and provision, and c) bureaucracies usually underpay their best workers and thus do not generate enough initial income inequality.

François Bourguignon has a very good and readable new book on the international dimension of inequality, The Globalization of Inequality.

Martin Wolf has an FT review of both books.

For the pointer to the Atkinson interview I thank Enrico Schaar.

Eric Posner’s (with Adrian and Blakey Vermeule) new and excellent venture The New Rambler asked me to write a book review for them.  The impish side of me thought “what book better to review than the old Rambler?”, namely by Samuel Johnson?  Here is the opening of my piece:

A blogger by the ostensible name of “Samuel Johnson” has compiled his previous posts into a book, edited by a supposed W.J. Bate and Albrecht B. Strauss. But the true work here is “Johnson’s,” and the sequential editing, as such, seems to have been done by WordPress. The editorial illusion, of course, is a trick dating from the eighteenth century, as for instance Jonathan Swift and Alexander Pope presented the work of an imaginary Martinus Scriblerus in the 1740s. These Johnson posts claim to date from the early 1750s, a typical blogger’s conceit and misdirection, but the content is too modern and innovative to sustain that illusion for long.

Cutting through the postmodern trappings, Johnson’s blog reflects his ongoing interest in behavioral economics. He is continually skirting the frontier of the latest research insights, although like many bloggers he is lax in providing the proper citations. He writes off the top of his head, though without care for what came before from Thomas Schelling, Jean Tirole, or Cass Sunstein, among other titans of the field. Reading these short pieces is thus a fascinating but often frustrating experience. And as is true for most of the work in behavioral economics, there are insights but a fully fleshed out model, applied consistently to all human choices, is nowhere to be found.

Here is the full review, recommended!

Chad writes me:

What jobs (particularly ones we think of as being inherently beneficial to society) might America have too many of? Political journalism comes to mind this particular month, since we apparently have enough to carefully monitor the Chipotle orders of presidential candidates 19 months before the election. Writers might be another, particularly in a world of self-publishing.

One can imagine lots of reasons for a greater-than-optimal number of people in a particular profession, from government subsidies to cultural biases, but I’m curious if you have a gut feeling about any professions in particular.

A good question, in my view the answer is not so simple.  Writers and artists are indeed a possible nomination, but some of the demand for these professions is likely for consumption, which makes the overinvestment difficult to judge.  And what about lawyers?  Relative to the number of laws and regulations (too many in my view, but take them as given), it is not obvious to me that we have too many lawyers.  Someone has to tell companies when it is safe to proceed, or not.

How about too many people selling medical devices and other high margin items?  Too many people making alcohol?  Too many people raising and selling animal meat?  Those would be my picks.

The finance sector is another obvious culprit, but as a fraction of wealth I do not think it is larger than in the past.  Admittedly people in the finance sector may be engaging in the wrong activities, but I am not sure the case for fewer employees per se is so obvious.  Still, it is another candidate, if only because it (often) involves people selling high-margin items.